The Sunway TaihuLight machine is twice as fast as the previous number one, which was built in China with chips from US firm Intel, the Top500 survey of supercomputers said on its website www.top500.org.
Its performance ends "speculation that China would have to rely on Western technology to compete effectively in the upper echelons of supercomputing," the survey's website said.
The supercomputers on the Top500 list, which is produced twice a year, are rated based on speed in a benchmark test by experts from Germany and the US .
China has poured money into big-ticket science and technology projects as it seeks to become a high-tech leader.
It plans to open the world's largest radio telescope in southeastern China this year, state-media reported.