Chinese media report that a newly built jackup oil rig is on its way to be put in operation off the disputed Japanese-controlled islands called Senkaku by the Japanese and Diaoyu by the Chinese.

A low-key story on lease finance in today's Xinhua Daily newspaper carried the information, which remains unconfirmed.

The move is being made in the midst of a large-scale, live-fire naval exercise by Chinese forces in the East China Sea in an area some 200 km to the north of the disputed islands.

The