A suspected Chinese surveillance balloon was spotted in US airspace but the Pentagon decided not to shoot it down as it could cause harm to people on the ground. The floating 'spy' balloon has caused further strain on US-China relations.

A senior defence official told reporters the Pentagon is very confident that the Chinese balloon was flying over "sensitive sites" to collect information. The balloon was spotted in Montana, home to one of the nation's three nuclear missile launch facilities at Malmstrom Air Force Base, AP reported.

The North Americal Aerospace Defence Command (Norad) and US Northern Command in a joint statement said they are tracking the balloon that is "currently travelling at an altitude well above commercial air traffic and does not present a military or physical threat to people on the ground".

The Pentagon, in a press briefing, said similar balloons have been spotted in the past as well and the US has taken steps to ensure it did not collect sensitive information.

A US intelligence official told the Washington Post that similar spy balloons were spotted previously over Hawaii and Guam.

The 'spy' balloon saga comes as US Secretary of State Antony Blinken was supposed to make his first trip to Beijing, expected this weekend, to try to find some common ground. Although the trip has not been formally announced, both Beijing and Washington have been talking about his imminent arrival. It was not immediately clear if the discovery of the balloon would impact Blinken's travel plans.

BALLOON OVER MONTANA

The US did get fighter jets, including F-22s, ready to shoot down the balloon, but the Pentagon recommended against it as its size would create a debris field large enough that it could have put people at risk in Montana.

It was not clear what the military was doing to prevent it from collecting sensitive information or what would happen with the balloon if it wasn't shot down.

The official would not specify the size of the balloon, but said it was large enough that, despite its high altitude, commercial pilots could see it.

Some Montana residents took pictures of the "big white circle in the sky". But the Pentagon would not confirm if the large white balloon lingering over the area was the surveillance balloon.

"I thought maybe it was a legitimate UFO," a Montana resident told AP.

"From the spy balloon to the Chinese Communist Party spying on Americans through TikTok to CCP-linked companies buying American farmland, I'm deeply troubled by the constant stream of alarming developments for our national security," Montana Governor Greg Gianforte said in a statement.