China has called on Vietnam to show sincerity in resolving a South China Sea territorial dispute after the latter secured a third-party deal for oil exploration rights in the contested waters, a day after both countries agreed to limit actions that could potentially escalate tensions over the conflict.

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A Vietnamese state-owned firm signed a deal with India for a supply of naval vessels and oil and gas exploration rights in the South China Sea, which overlaps with Sino-Vietnam disputed territories, according to China's official People's Daily Online.

The Chinese-controlled publication warned Hanoi that taking the approach would only undermine efforts at arriving at a negotiated solution.

"Playing tricks" would only hurt Sino-Vietnam relations and hamper bilateral long-term development, it added.

The Vietnam-India deal, signed during Prime Minister Nguyen Tan Dung's visit to New Delhi earlier this week, is primarily aimed at the modernization of Vietnam's armed forces and to facilitate bilateral cooperation in the energy sector.

Observers believe Vietnam intends to utilize the new vessels for surveillance in the South China Sea, particularly near its bases in the Spratly islands where programs for naval deterrents against China are being built, Reuters relayed.

Aside from the sale of four naval ships, India has also pledged to administer enhanced training for the Vietnamese forces, the Economic Times noted.

Beijing has long been critical of the cooperation between India and Vietnam most notably with regard to the energy sector, arguing that both countries' joint exploration initiatives off Hanoi's coast are unlawful.

Chinese authorities reiterated on Tuesday that it has no objections to India-Vietnam exploration activities in the South China Sea so long as it does not overlap with disputed territories in the area.

Foreign Ministry spokesperson Hong Lei reaffirmed China's sovereignty over Spratly islands and its surrounding waters. He said the government had no problem with countries who want to legally conduct oil and gas explorations in waters that they had no dispute over.

However, he warned that should the Vietnam-India explorations encroach on or hurt China's sovereignty, the country would "resolutely oppose it."

Tagspolitics, Communist states, Asia, Territorial disputes in the South China Sea, Vietnam