China has fully militarized at least three of several islands it built in the disputed South China Sea, arming them with anti-ship and anti-aircraft missile systems, laser and jamming equipment and fighter jets in an increasingly aggressive move that threatens all nations operating nearby, a top US military commander said Sunday.

US Indo-Pacific commander Admiral John C Aquilino said the hostile actions were in stark contrast to the Chinese president Xi Jinping’s past assurances that Beijing would not transform the artificial islands in contested waters into military bases. The efforts were part of China’s flexing its military muscle, he said.

“Over the past 20 years we’ve witnessed the largest military buildup since world war two by the PRC,” Aquilino told the Associated Press in an interview, using the initials of China’s formal name. “They have advanced all their capabilities and that buildup of weaponization is destabilizing to the region.”

There were no immediate comments from Chinese officials. Beijing maintains its military profile is purely defensive, arranged to protect what it says are its sovereign rights. But after years of increased military spending, China now boasts the world’s second-largest defense budget after the US and is rapidly modernizing its force with weapons systems including the J-20 stealth fighter, hypersonic missiles and two aircraft carriers, with a third under construction.

Aquilino spoke with the Associated Press onboard a US navy reconnaissance aircraft that flew near Chinese-held outposts in the South China Sea’s Spratly archipelago, one of the most hotly contested regions in the world. During the patrol, the P-8A Poseidon plane was repeatedly warned by Chinese callers that it illegally entered what they said was China’s territory and ordered the plane to move away.

“China has sovereignty over the Spratly islands, as well as surrounding maritime areas. Stay away immediately to avoid misjudgment,” one of the stern radio messages said in a veiled threat.

But the US navy plane dismissed the multiple warnings and pressed on defiantly with its reconnaissance in brief but tense moments witnessed by two AP journalists invited onboard. “I am a sovereign immune United States naval aircraft conducting lawful military activities beyond the national airspace of any coastal state,” a US pilot radioed back to the Chinese.

“Exercising these rights is guaranteed by international law and I am operating with due regard to the rights and duties of all states,” he said.

Navy commanding officer Joel Martinez, who led the P-8A Poseidon’s crew, said there had been an incident in which a Chinese jet flew close to a US aircraft in a dangerous manoeuvre in the disputed region. The US flight crew reminded the Chinese to comply with aviation safety regulations, he said.

As the P-8A Poseidon flew near the Chinese-occupied reefs, some appeared to house multi-story buildings, warehouses, hangars, seaports, runways and radars. Near Fiery Cross, more than 40 vessels could be seen apparently anchored.

Aquilino said the construction of missile arsenals, aircraft hangars, radar systems and other military facilities on Mischief Reef, Subi Reef and Fiery Cross appeared to have been completed but it remained to be seen if China would pursue the construction of military infrastructure in other areas.

“The function of those islands is to expand the offensive capability of the PRC beyond their continental shores,” he said. “They can fly fighters, bombers plus all those offensive capabilities of missile systems.”

Admiral John C Aquilino (left) commander of the US Indo-Pacific Command, looks at videos of Chinese structures and buildings on board a US P-8A Poseidon reconnaissance plane flying in the South China Sea on Sunday.

He said any military and civilian plane flying over the disputed waterway could easily get within range of the Chinese islands’ missile system.

“So that’s the threat that exists, that’s why it’s so concerning for the militarization of these islands,” he said. “They threaten all nations who operate in the vicinity and all the international sea and airspace.”

China sought to shore up its vast territorial claims over virtually the entire South China Sea by building island bases on coral atolls nearly a decade ago. The US responded by sending its warships through the region in what it calls freedom of operation missions. The US has no claims itself but has deployed navy ships and aircraft for decades to patrol and promote free navigation in international waterway and airspace.

China routinely objects to any action by the US military in the region. The other parties – the Philippines, Vietnam, Malaysia, Taiwan and Brunei – claim all or part of the sea, through which approximately $5tn in goods are shipped every year.

Despite China’s aggression, the long-simmering territorial conflicts should only be resolved peacefully, Aquilino said, and cited the Philippine government’s successful move to bring its disputes with China to international arbitration in 2013 as a good template.