China Wants Peace in Disputed South China Sea
* Xi meets Vietnam's president in Beijing
* Oil reserves, shipping lanes, fishing grounds at stake
* Xi says must act in spirit of responsibility to history
(Reuters) - Chinese President Xi Jinping [pictured above] told his visiting Vietnamese counterpart of Wednesday that maintaining peace and stability in the contested South China Sea was vital for both countries, who should remember their traditional friendship.
Beijing's assertion of sovereignty over a vast stretch of the South China Sea has set it directly againstVietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to other parts of the sea, making it Asia's biggest potential military troublespot.
At stake are potentially massive offshore oil reserves. The seas also lie on shipping lanes and fishing grounds.
Vietnam has accused China of harassing or attacking Vietnamese fishing boats in the South China Sea where their mutual territorial claims overlap, while China has told Vietnam to better educate their sailors to stay out of Chinese waters.
In December, Vietnam accused Chinese ships of sabotaging an exploration operation by state oil and gas company, Petrovietnam, by cutting a seismic cable.
But Xi took a more conciliatory line during his meeting with President Truong Tan Sang in Beijing's central Great Hall of the People, where Sang was given full military honours at his welcome ceremony.
"China and Vietnam must both act in a spirit of responsibility towards history and their people, put the broader picture of Sino-Vietnam friendship and bilateral development first, make up their minds to ... push for a political resolution to the South China Sea issue and prevent it from affecting ties," Xi said, according to China's Foreign Ministry.
"What is crucial is maintaining stability and promoting cooperation," added Xi, who assumed the presidency in March.
"TRADITIONAL FRIENDSHIP"
China "needs a peaceful and stable neighbouring environment", he added.
However, Xi reiterated China's position that the South China Sea must be resolved by direct talks between the claimant nations, rejecting outside involvement.
China has resisted proposals for a multilateral code of conduct for the waters, preferring to try to negotiate disputes with each of the far less powerful individual claimants.
Beijing has been angered by U.S. attempts to involve itself in the dispute, and has looked on warily as Washington strengthens military ties with both Hanoi and Manila.
China has also stepped up activity in the region, including establishing garrisons on some of the disputed islands, and accused Washington of seeking to stir up trouble far from home.
Sang told Xi that Vietnam wanted to resolve their disputes through talks too, China's Foreign Ministryadded.
"The two countries have a deep traditional friendship, and this is a treasure for the two peoples (to cherish)," he added.
Unprecedented arguments over the sea prevented an Association of Southeast Asian Nations (ASEAN) summit last July from issuing a joint communique, the first time this had happened in the 10-member bloc's 45-year history.
Despite China giving Vietnam steadfast support against U.S. forces in the Vietnam war, ties have been testy since, and only partly because of the maritime arguments.
China invaded Vietnam in February 1979 to punish Hanoi for toppling the Beijing-backed Khmer Rougein Cambodia one month earlier, poisoning relations for decades between the two Communist neighbours.
By Ben Blanchard; Editing by Alison Williams