A giant rig owned by China's top offshore oil producer is operating within the country's territorial waters, Beijing said on Wednesday.
China stated its position as it reaffirmed its resolve to protect territorial sovereignty amid continued maritime challenges from Vietnam.
Specialists said tensions may escalate, with China within its legal rights to operate the rig, and Vietnam feeling emboldened by Washington's military pivot and US President Barack Obama's recent Asian visit.
Existing communication channels should be used to avoid possible clashes, the specialists said.
Beijing and Hanoi exchanged sharp rhetoric after the Maritime Safety Administration of China posted a navigational warning on its website on Saturday advising that the deep-sea rig Hai Yang Shi You 981 would be drilling near the Xisha Islands from May 4 to Aug 15.
The Associated Press cited a Vietnamese official as claiming that Vietnamese ships collided with Chinese vessels near the rig in an attempt to prevent drilling.
State Councilor Yang Jiechi cautioned Vietnam not to disturb the activities of Chinese companies near the islands, saying that operations within the mandate of China's sovereignty should not be subject to interference.
The Xisha Islands are part of China's inherent territory and there is no dispute about this, Yang told Vietnamese Deputy Prime Minister and Foreign Minister Pham Binh Minh during a phone call on Tuesday.
The islands have been Chinese territory for centuries and there is a monument declaring China's sovereignty, along with a communications station run by a Chinese company, on Zhongjian Island, the island closest to the rig.
Hanoi claimed the rig was operating in its exclusive economic zone and on its continental shelf.