The sinking at a shipyard earlier this year was first reported by The Wall Street Journal, which also said that satellite imagery later showed large floating cranes arriving to salvage it.

"It's not surprising that the PLA Navy would try to conceal the fact that their new first-in-class nuclear-powered attack submarine sank pierside," the senior US defense official said on condition of anonymity, referring to Beijing's People's Liberation Army Navy.

"In addition to the obvious questions about training standards and equipment quality, the incident raises deeper questions about the PLA's internal accountability and oversight of China's defense industry -- which has long been plagued by corruption," the official said.

The incident is a setback for China, which is seeking to modernize its navy -- the largest in the world, but which includes many smaller warships such as frigates and corvettes.

When asked about the reports on Friday, its foreign ministry said it was "not aware" of the incident concerning the submarine.

The United States and Britain are meanwhile working to provide Australia with nuclear-powered submarines -- a move that would expand the pool of countries with the advanced undersea vessels.

Beijing has been critical of the effort, which also envisages jointly developing advanced warfighting capabilities and is seen as a strategic answer to Chinese military ambitions in the Pacific region.