BEIJING (Reuters) - The leaders of China and Vietnam agreed on Thursday to "properly handle" their disputes, China's official Xinhua news agency reported, amid tension over a territorial spat in the South China Sea.
China's increasingly assertive moves to press sovereignty claims in regional waters have rattled its neighbors and aroused concern in the United States, though Beijing says it has no hostile intent.
China's deployment of an oil rig last year, in what Vietnam called its exclusive economic zone and on its continental shelf, about 120 nautical miles off its coast, led to the worst breakdown in relations since a brief border war in 1979.
"We are in favor of properly handling disputes between both sides through dialogue, and expanding cooperation and common interests," Chinese President Xi Jinping told Vietnamese President Truong Tan Sang, Xinhua said.
Both are socialist countries led by communist parties, and it "is a requirement for the two countries to enhance strategic coordination, exchanges and cooperation", Xi added.
Sang is in Beijing to attend a military parade marking 70 years since the end of World War Two in Asia.
"Vietnam hopes to strengthen political trust and personnel exchanges with China, properly handle differences and enhance win-win cooperation," Sang said, according to Xinhua.
China has overlapping claims with Vietnam, the Philippines, Malaysia, Taiwan and Brunei in the South China Sea, through which $5 trillion in ship-borne trade passes every year.
Washington has taken advantage of the row to ramp up diplomacy with Hanoi. China has looked on with suspicion at what it sees as U.S. moves to "provoke" tension by supporting its regional allies, such as the Philippines, besides Vietnam.
China and Vietnam have sought to patch up ties since the row, and Chinese Vice Premier Zhang Gaoli, a member of the ruling communist party's elite Politburo Standing Committee, visited Vietnam in mid-July.
Trade between the two countries has swelled to $50 billion annually, but Vietnam has long been suspicious of its giant neighbor.