China has said it was "legitimate and necessary" for it to take action against Vietnamese vessels that entered its waters illegally, after Hanoi accused it of attacking a fishing boat.

A Vietnamese boat was fishing near the contested Paracel Islands last week when it was "chased and shot at by a Chinese vessel" setting the cabin on fire, Hanoi's foreign ministry said Monday.

It "strongly" protested over the incident it called a "serious violation" of its sovereignty.

But, using the islands' Chinese name, Beijing's foreign ministry spokesman Hong Lei told reporters Tuesday at a regular briefing: "The Xisha islands are China's inherent territory, China has indisputable sovereignty over the Xisha islands.

"It is necessary and legitimate for China to take action against a Vietnamese shipping boat that has entered China's waters for illegal activity.

"According to verification with the relevant party, no damage was caused to the fishing boat from Vietnam at the time."

Hong declined to confirm whether the Chinese vessel had shot at the Vietnamese boat when asked about the incident by AFP.

Vietnam and its giant neighbour have long-standing territorial disputes over the Spratly and Paracel Islands, which both countries claim, and often trade diplomatic barbs over oil exploration and fishing rights.

US State Department acting deputy spokesman Patrick Ventrell told reporters in Washington that the United States was "concerned" by reports of the incident, and was seeking more information from both Beijing and Hanoi.

"As a Pacific nation, the US has a national interest in the maintenance of peace and stability, respect for international law, freedom of navigation and unimpeded lawful commerce in the South China Sea," he said.

"So we strongly oppose the threat or use of force or coercion by any claimant to advance its claims in the South China Sea."

Beijing claims virtually all of the South China Sea, which includes both island groups and is believed could sit atop huge oil and gas reserves as well as being home to important fishing grounds.

Hanoi says hundreds of fishing boat crews have been arrested by Chinese authorities in recent years.