"The reports alleging that the People's Liberation Army, (PLA) Guangzhou Military Area Command and the Navy's South China Sea Fleet have entered combat readiness are not true," the Ministry of National Defence said.
The Defence Ministry's comments came after warnings in state media that China is prepared to fight to end the stand-off. A brief statement from Ministry said those reports were not true.
China's maritime standoff with the Philippines in the South China Sea over the dispute of Huangyan Island referred by Philippines as Panatag Shoal has entered the second month.
The two nations have had non-military vessels stationed at the shoal since April 8 in an effort to assert their sovereignty to the area.
The standoff began last month over Philippines objecting to the presence Chinese fishermen at Scarborough Shoal.
The Philippines asserts that the uninhabited island reported to be rich with abundant natural gas and oil as part of its 200 mile Exclusive Economic Zone (EEZ), guaranteed by UN Law of the Seas.
China, on the other hand, says that the island was part of its coast for centuries therefore it has inherent rights over it.
China also piled up pressure on the Philippines with a travel advisory which resulted in cancellation of tour plans of hundreds of Chinese tourists and stepped controls on imports of fruits and other materials from Manila.
China is the third largest trade partner of the Philippines. Their bilateral trade volume exceeded USD 30 billion last year.
Meanwhile, China watched with considerable interest US efforts to get the Senate approval for the 1982 UN Law of the Sea treaty (UNLST) as it believes that Washington tacitly backed Manila's sudden push for the island.
US military has held series of drills with Filipino force recently.
US is also firming up its military alliances with a host of ASEAN countries which have similar maritime disputes with China in the South China Sea.
US Administration officials said UNLST is necessary to protect the US Navy's right to carry out exercises off the coast of China as it teamed with various South East Asian countries including Philippines to turn attention in Asia-Pacific.
The Obama administration says that ratifying the pact will protect US Navy's right to conduct exercises in waters near China.
China, which is a party to the treaty, claims control over its exclusive economic zone that extends about 370 km from its coast and can, therefore, ban foreign navies from conducting exercises in the area.
US says no such control exists beyond about 22 kilometres from the coast, it said.