China on Thursday said it is in negotiations with Djibouti to build a logistics hub for military operations in the strategically vital Horn of Africa entrepot.
The announcement comes as Beijing seeks to expand its international security role, particularly in regions where it has significant economic interests, such as Africa.
The country is a top contributor of United Nations peacekeepers to the continent and has been involved in anti-piracy efforts in the Gulf of Aden.
"China and Djibouti are currently in discussions over the construction of support facilities," defence ministry spokesman Wu Qian said at a regular press conference.
"These facilities will better ensure the Chinese armed forces' ability to carry out missions in international peace, protecting freedom of navigation in the Gulf of Aden and Somali waters," he added.
China's foreign ministry confirmed the negotiations while avoiding describing the centre as a "military base".
The comments came after US general David Rodriguez, the commander of the US military's Africa Command, reportedly said that Beijing had signed a 10-year lease for the base, describing it as China's first "military location" on the continent and adding it would "extend their reach."
The US, France and Japan already have facilities in Djibouti, while Chinese officials say the country does not have any overseas military bases.
But Chinese contracts to build or manage Indian Ocean ports have raised concerns it is seeking to establish a so-called "string of pearls" in the region.
China's anti-piracy and peacekeeping contributions have been seen as part of an effort by Beijing to improve operational capabilities as it builds a more modern, efficient army with the help of annual double-digit defence budget increases.
Developing a so-called "blue water" navy, able to operate far from Chinese shores, is a key goal of the efforts, which include building an indigenous aircraft carrier.
A top Chinese general reportedly visited Djibouti earlier this month, prompting speculation that an agreement might soon be reached.
A former French colony, Djibouti guards the entrance to the Red Sea and, ultimately, the Suez Canal, and has been used by international navies -- including China -- as a base in the fight against piracy from neighbouring Somalia.
In May, the country's president Ismail Omar Gelleh told AFP that "discussions are ongoing" with China for a military base in the tiny Horn of Africa nation, saying that Beijing's presence would be "welcome".