According to state broadcaster CCTV, the cargo vessel Khoi Nguyen 18 ran into difficulty near Yongshu Reef, also known as Fiery Cross Reef. A total of 39 crew members have been rescued, while search operations remain under way.

A Chinese rescue vessel first spotted what was believed to be a distress signal from the endangered ship shortly before 6:30 pm on Saturday (1030 GMT), state news agency Xinhua said.

Six Chinese vessels and a rescue helicopter as well as one Vietnamese vessel were conducting search and rescue operations in the area, Xinhua said.

According to authorities in the Chinese island province of Hainan, the Khoi Nguyen 18 is a Vietnamese-registered ship measuring just under 70 metres in length, Xinhua added.

Vietnam's foreign ministry did not immediately respond to AFP's request for comment.

Beijing claims the South China Sea in nearly its entirety, despite an international ruling that its assertion has no legal basis.

Vietnam, along with the Philippines, Brunei, Malaysia and Taiwan, have competing claims to areas of the busy waterway, including the Spratlys, which are believed to sit on vast oil and gas resources.