HONG KONG (Reuters) - Recent visitors to the bay surrounding a submarine base on the southern coast of China's Hainan Island describe a curious nocturnal phenomenon. Powerful spotlights are sometimes trained directly on the ocean frontages of neighboring hotels at night, making visibility out to sea virtually impossible. Some of the lights are mounted on land and others on passing naval patrol boats.

"The effect is incredible," said one recent visitor. "The glare is so great you can hardly stand it on the balcony. You go inside and draw the curtains tight."

The blinding lights cannot obscure something of intense interest to the world's military intelligence agencies: evidence that China has made a breakthrough in its drive to rival America and Russia as a nuclear arms power.

Satellite imagery reveals the regular presence of nuclear-powered ballistic missile submarines at the strategic base near the resort city of Sanya. Specialized surface warships and aircraft designed to protect the subs are prowling key waterways off the coast. Facilities at the base appear to have been built to store and load ballistic missiles. Antenna arrays that support the hunt for foreign submarines have appeared on Chinese-held islands in the hotly contested South China Sea. And a veteran submariner has been appointed to command Chinese forces in the south of the country.

Taken together, this means China has a force of missile submarines that can launch nuclear attacks from beneath the waves and now appear to be heading out on patrols, according to serving and retired naval officers, diplomats and security analysts. That gives Beijing something it has until recently lacked: a more reliable "second strike" capability if its land-based nuclear arsenal comes under attack.