Beijing demanded on Thursday that Hanoi cease its harassing actions against a Chinese oil rig in waters off an island in the South China Sea and called for dialogue to end the conflict.

The conflict began on May 2 in China's territorial waters when state-run China National Offshore Oil Corp placed a large deep-sea oil rig in a location only 31 km away from Zhongjian Island, a part of China's Xisha Islands. China said Hanoi then sent armed ships to ram Chinese vessels near the rig.

From May 3 until Wednesday, Vietnam had dispatched more than 30 vessels and rammed Chinese ships 171 times, said Yi Xianliang, deputy director of the Border and Ocean Affairs department of Foreign Ministry, in Beijing on Thursday.

Yi said Vietnam has been using armed ships against China's government and civilian ships.

According to The Associated Press, a Vietnamese official said there were no reports of injuries after the ramming incidents.

The conflict remains unresolved just days ahead of an Association of Southeast Asian Nations summit. Chinese analysts said the dispute could add fuel to tensions between the two nations.

Beijing said lines of communication between Beijing and Hanoi "are working well" and they have had contact many times over the past five days.

Li Yong, CEO of China Oilfield Services, which is contracted to drill on the rig, said that a vessel ramming the oil rig "would lead to disastrous consequences".

Dong Manyuan, vice-president of the China Institute of International Studies, said countries such as Vietnam have "stirred up ... an incident that has upset neighboring nations".

"All of the other countries are watching this situation closely," Dong said.

In a statement on Wednesday, US State Department spokeswoman Jen Psaki said China's decision to introduce an oil rig accompanied by numerous government vessels for the first time in waters disputed with Vietnam is provocative and raises tensions.

On Thursday, US State Department deputy spokeswoman Marie Harf reiterated that the US doesn't take a position on the competing territorial claims. But she said the Chinese actions are exactly what the US doesn't want anyone to take. "We don't want people to take provocative steps that could lead to miscalculations.

We don't want people to take any steps to raise tensions. So we encouraged countries like China, in this case, not to do so," she told a briefing at the Foreign Press Center in DC.

Harf also emphasized it's not a zero-sum game. "We believe we can work with China. We need to have a good partnership with China," she said.

"You see starting presidents and down engagements at very high level to forge a new kind of relationship moving forward,"

Amid escalating tensions, Vietnamese stocks have plunged to their lowest prices since 2001, extending a six-week sell-off that turned the benchmark index into the world's worst performer, Bloomberg News reported.

The VN Index dropped by 5.9 percent to close at 527.09 on Thursday. The benchmark gauge for Vietnam's $52 billion equity market has tumbled 13 percent from this year's peak on March 24.

"The talk is all about the political tension," Michel Tosto, the head of institutional sales at Viet Capital Securities in Ho Chi Minh City, was quoted by Bloomberg as saying.

Dong said the markets will be under control if Vietnam "sincerely follows and pays due respect" to the spirit of the Declaration on the Conduct of Parties in the South China Sea, a document endorsed by China and the 10 Southeast Asian nations.

Contact the writers at zhangyunbi@chinadaily.com.cn and puzhendong@chinadaily.com.cn

Wu Jiao and He Liu contributed to this story.

(China Daily USA 05/09/2014 page1)