HANOI (REUTERS) - Vietnam has lodged an official protest with China following the sinking of a Vietnamese fishing vessel in the disputed South China Sea, Vietnam said late on Thursday (March 21).

Vietnam and China have for years been embroiled in a dispute over the potentially energy-rich stretch of waters, called the East Sea by Vietnam.

The fishing vessel was moored near Da Loi island in the Paracel archipelago on March 6 when a China Maritime Surveillance Vessel chased it and fired water cannon at it, Vietnam's foreign ministry said in a statement.

The boat sank after hitting rocks while it was being chased. All five fishermen on board were rescued by another Vietnamese fishing boat, the ministry said.

A Vietnamese rescue agency said earlier that the Chinese vessel rammed the fishing boat.

"The Chinese vessel committed an act that violated Vietnam's sovereignty over the Hoang Sa archipelago, threatened the lives and damaged the properties and the legitimate interests of Vietnamese fishermen," the ministry said in the statement, referring to the Paracel islands by their Vietnamese name.

Vietnam had lodged a protest with China's embassy in Hanoi and demanded that China deal strictly with its Maritime Surveillance agency to prevent similar incidents and to compensate fairly the fishermen for their losses.

In Beijing, foreign ministry spokesman Geng Shuang said the Paracel Islands were China's and Vietnam must immediately stop illegal fishing activities in the vicinity.

The fishing boat had already struck a reef and sunk before the Chinese vessel arrived, he added.

"We hope the Vietnamese side can stop making things up."

China claims 90 per cent of the South China Sea, where it has steadily expanded military and other installations on artificial islands and reefs, unnerving the region and angering Washington.

In addition to Vietnam, the Philippines, Malaysia, Brunei and Taiwan also have claims to parts of the sea.

Separately, the Vietnamese government on Friday (March 22) denounced Taiwan's military drills on and around Itu Aba, an island in the South China Sea, that Vietnam calls Ba Binh.

Vietnamese Foreign Ministry spokeswoman Le Thi Thu Hang said the drills were "a serious violation of Vietnam's sovereignty over the (Spratly) archipelago, threatening peace, stability, and maritime safety and security, stressing and complicating the situation in the East Sea."

"Vietnam resolutely opposes (the drills) and demands that Taiwan to not repeat similar actions," Hang said in a statement posted on the government website.