China and Vietnam plan to set up a defence hotline as part of closer military links, official media reported on Wednesday, in the latest effort to publicly ease tensions after a maritime dispute.

The two sides "agreed to promote bilateral defence cooperation" at their second annual security dialogue held in Beijing, the English-language Vietnam News reported after the weekend talks.

The newspaper said China and Vietnam would expand ties to "new fields", among them the exchange of military delegations, including military students, as well as establishing the hotline between their defence ministries.

It did not elaborate on whether the line would be for the ministers themselves.

A few years ago, the communist party secretary-generals of Vietnam and China also established a hotline.

And in 2009, the foreign ministries signed an agreement to create a similar link between the neighbours' "leaders", although its status is unclear.

In the latest talks, involving Vietnam's deputy defence minister and China's deputy chief of general staff, Beijing said it would share experiences in United Nations peacekeeping, Vietnam News reported.

Hanoi has not yet contributed to UN missions but has expressed interest to do so.

The neighbours have a long-standing dispute over sovereignty of the potentially oil-rich Paracel and Spratly island groups, which straddle vital commercial shipping lanes in the South China Sea.

Relations sank to their lowest point in years in May and June when Vietnam said Chinese vessels twice interfered with its oil survey ships inside the country's exclusive economic zone.

Both countries then staged naval drills, and Vietnamese citizens took to the streets in a series of unprecedented demonstrations objecting to the Chinese "invasion", although recently Hanoi ordered an end to the rallies.

Vietnamese bitterly recall 1,000 years of Chinese occupation and routinely express dislike of China.

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