A senior U.S. defense official reported on Thursday that China‘s latest nuclear-powered attack submarine sank earlier this year, which could pose a significant embarrassment for Beijing as it aims to enhance its military capabilities. China boasts the largest navy globally, comprising over 370 vessels, and is in the process of developing a new generation of nuclear-armed submarines.

The official, who requested anonymity, indicated that the submarine, which is the first of its class, sank next to a pier sometime between May and June. A spokesperson for the Chinese embassy in Washington stated that they had no information to share regarding the incident. “We are not familiar with the situation you mentioned and currently have no information to provide,” the spokesperson remarked.

The cause of the sinking remains unclear, as does whether the submarine was carrying nuclear fuel at the time. The official noted that this incident not only raises concerns about training standards and equipment quality but also highlights deeper issues regarding the People’s Liberation Army’s internal accountability and the oversight of China’s defense industry, which has historically faced challenges related to corruption.

The official remarked that it is not unexpected for the PLA Navy to attempt to hide the sinking. During a press conference in Taipei on Friday, Taiwan’s Defence Minister Wellington Koo stated that authorities have a comprehensive understanding of the situation through various intelligence and surveillance techniques, although he did not provide further details.

Taiwan, which China claims as its own territory, closely monitors China’s military operations. In June, images surfaced online showing a Chinese nuclear submarine surfacing in the Taiwan Strait near local fishermen.

The Wall Street Journal was the first to report on the Chinese submarine incident. A series of satellite images from Planet Labs taken in June appear to indicate the presence of cranes at the Wuchang shipyard, where the submarine may have been docked.

As of 2022, China possessed six nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines, and 48 diesel-powered attack submarines, according to a Pentagon report on China’s military capabilities.

This submarine fleet is projected to expand to 65 by 2025 and 80 by 2035, as stated by the U.S. Defense Department. On Wednesday, China announced the successful launch of an intercontinental ballistic missile into the Pacific Ocean, a development likely to heighten international concerns regarding the country’s nuclear expansion.

Earlier this month, the United States and China engaged in theater-level commander discussions for the first time, aiming to stabilize military relations and prevent misunderstandings, particularly in sensitive areas like the South China Sea.