China Navy Submarine COLLAPSED | 70 Officers on Board Died Within Seconds. An accident aboard an overcrowded Chinese submarine operating off the country's northeast coast has killed 70 officers and crew members in the worst known peacetime military disaster in Communist Chinese history, according to reports today. The official New China News Agency said in a brief dispatch that the accident occurred "recently" in the Yellow Sea between the Shandong and Korean peninsulas. The diesel-powered craft, Navy Submarine No. 361, was involved in an exercise when the accident occurred, and "because of a mechanical malfunction, the 70 crew members on board died," the news report said. The submarine, which is believed to have belonged to the East China Fleet, was towed to port, possibly in Lushun, just south of Dalian, U.S. military analysts said. "The officers and sailors of 361 remembered their sacred duty entrusted by the Party and the People," said former president Jiang Zemin in an announcement about the accident. Jiang is chairman of the Central Military Commission, which controls the military. "They died on duty, sacrificed themselves for the country, and they are great losses to the People's Navy." China's military cloaks itself in secrecy and it is not clear why it decided to release the report today, while the government was dealing with the epidemic of severe acute respiratory syndrome. China's mishandling of the SARS outbreak, particularly its acknowledgement that it concealed information about the epidemic's extent and spread, has caused a crisis of public trust. Experts said the accident illustrated the problems in China's military modernization program, which is focused on two main tasks: retaking Taiwan and denying the U.S. military the chance to interfere in a battle over the island. From 1989 until this year, defense spending increased by more than 10 percent a year. This year, at the annual legislative session in March, the government announced that defense spending would increase 9.6 percent. China says it spends about $22 billion a year on defense, but experts say the real figure is closer to $80 billion.