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By Lucy Hornby

BEIJING, March 19 (Reuters) - China may convert more navy ships into fishery vessels to patrol the South China Sea, the China Daily reported, as Beijing seeks to extend its reach over disputed islands that straddle key Asian shipping lanes.

"China will make the best use of its (retired) naval ships and may also build more fishery patrol ships, depending on the need," Wu Zhuang, director of the Administration of Fishery and Fishing Harbor Supervision of the South China Sea, told the newspaper.

China earlier this week sent its largest fishery patrol ship, Yuzheng 311, to the waters around the Spratly Islands, a cluster of islets and atolls that lie north of Borneo island, an area rich in fisheries with significant oil and gas deposits.

"Faced with a growing amount of illegal fishing and other countries' unfounded territorial claims of islands in China's exclusive economic zone, it has become necessary to step up the fishery administration's patrols to protect China's rights and interests," the China Daily quoted Wu as saying.

The Spratlys are claimed in full or part by China, as well as Taiwan, Vietnam, the Philippines, Malaysia and Brunei. Several of them have moved to bolster their own claims recently.

The Philippines passed a law last week laying claim to part of the Spratlys. Malaysia's Prime Minister on March 5 landed on Swallow Reef and Ardasier Reef, also in the Spratly archipelago, to assert his country's claim.

U.S. WORRIED

Immediately prior to the Yuzheng 311 mission, the United States assigned an escort to its naval survey vessel Impeccable, which was harrassed by five Chinese boats last week in waters that China claims as its exclusive economic zone.

U.S. National Intelligence Director Dennis Blair told Congress on March 10 the Chinese had become assertive in staking claims to international waters around economic zones and were "more military, aggressive, forward-looking than we saw a couple of years before" in Southeast Asia and the South China Sea.

The shortest route between the Pacific and Indian oceans, the South China Sea has some of the world's busiest shipping lanes. Over half the globe's oil tanker traffic passes through the sea, which is also said to hold valuable fishing grounds, and as-yet unexploited oil and natural gas fields.

In a sign of China's growing global clout, Beijing in December sent three naval vessels to help tackle piracy off Somalia in the country's biggest blue water operation outside of the region.

Beijing's opaque but quickening military build-up has contributed to a sense of unease in parts of Asia, especially Taiwan, the self-ruled island China claims as its own and has vowed to bring under mainland control, by force if necessary. (Editing by Bill Tarrant)

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