Satellite imagery showed that China's newest nuclear-powered attack submarine sank alongside a pier while under construction, a senior U.S. defense official said Thursday. The sinking of China's first Zhou-class submarine represents a setback for Beijing as it continues to build out the world's largest navy. Beijing has become increasingly assertive in pursuing its claim to virtually the entire South China Sea, which is crucial to international trade. Meanwhile, China faces longtime territorial disputes involving others in the region including Brunei, Malaysia, the Philippines, Taiwan and Vietnam. The United States has sought to strengthen ties to its allies in the region and regularly sails through those waters in operations it says maintains the freedom of navigation for vessels there, angering Beijing.