What is less understood is that the islands also represent a political powder keg for Vietnam, one of the most enthusiastic claimants over what it insists on calling 'the Eastern Sea'. Images last weekend of several hundred Vietnamese protesting against Beijing's claims of sovereignty outside China's embassy in Hanoi and southern consulate in Ho Chi Minh City are jarring indeed.

Protests of any sort are rare in communist-ruled Vietnam, especially in the heart of the capital's embassy quarter, and involving one of Vietnam's most important and complex relationships.

Beijing swiftly decried the actions of students who waved fists and national flags, and chanted 'defend the homeland' and 'down with China'.

Foreign Ministry spokesman Qin Gang said China was highly concerned at developments, and warned against actions that could harm bilateral ties. He also re-asserted China's 'indisputable sovereignty over the South China Sea islands'.

Vietnam's claims are not espoused just by the Hanoi government, but also by dissident and emigre groups. Internet chat-rooms are filled with alarm at the present situation. Vietnam's increasingly assertive parliament, the National Assembly, has been known to be critical of any perceived weakness towards China.

Further protests are a possibility, with party-affiliated youth groups among those planning action. Hanoi attempted to distance itself from the first protests and it is unclear how it will deal with any further demonstrations.

The latest tensions follow a difficult few months that have seen Hanoi issue several strongly worded statements of concern. Chinese naval patrols skirmished with Vietnamese fishing boats in July, leaving at least one person dead and several others injured. Then last month, China staged a military exercise that involved a disputed area around the smaller Paracel island group to the north.

The latest protests followed a move by China to establish San Sha City on Hainan Island as the administrative centre for both the Paracel and Spratly archipelagoes.

The symbolism has certainly not been lost on many ordinary Vietnamese who are still getting used to China as a benign neighbour rather than traditional enemy.

China cited a similar administrative move by the then-Republic of South Vietnam to drive its forces off the Paracels in 1974.

Hanoi was then too occupied in its final campaign to defeat the south and reunify the country after its long war against the American-backed Saigon regime to pay much notice. But Vietnamese officials still talk privately of a seething anger at the move by a fraternal nation in the midst of Hanoi's finest hour.

Relations further deteriorated and Vietnamese militias fought off a Chinese invasion across the mountainous northern border in early 1979, following Vietnam's occupation of Beijing-backed Cambodia to drive the ultra-Maoist Khmer Rouge from power. It was a brief but bloody war, leaving tens of thousands of casualties.

Recent years have seen both nations embark on a new era of ties, with deepening political and diplomatic links as well as improved trade, transport and tourism links.

The South China Sea is one issue that harkens back to a darker, more suspicious era, and diplomatic insiders warn that it will not be solved easily.

Some suggest that this time of relative peace must be used to secure a long-term solution.