HANOI (Reuters) - Demonstrators marched in Vietnam’s capital on Monday to mark the 28th anniversary of a bloody naval battle with China and to denounce Beijing’s growing assertiveness in the hotly contested waters of the South China Sea.

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About 150 people wearing headbands and carrying large banners circled the busy streets around Hanoi’s Hoan Kiem lake chanting “down with invasive China”. They laid wreaths for 64 Vietnamese sailors who died in a 1988 clash with Chinese forces in the Spratly islands.

The protest was small, but significant given Vietnam’s history of preventing or breaking up demonstrations. While anti-China sentiment is strong among the public, it is a sensitive issue for the ruling Communist Party.

Police made no attempt to stop the 90-minute protest, which was larger than those last year, including one on the eve of Chinese President Xi Jinping’s visit to Hanoi in November.

The rally comes amid tension, brinkmanship and a torrent of megaphone diplomacy in response to anything from Chinese flights and deployment of a missile system to U.S. “freedom of navigation” patrols and Japanese defense agreements with the Philippines.

Vietnam’s Foreign Ministry last month accused China of taking actions that threaten peace and “accelerate militarization”.

Monday’s demonstration was over a battle in the Johnson Reef in the Spratly islands. Accounts of it differ greatly and Vietnam does not commemorate the incident officially.

“That was the first step in China’s plan to militarize the South China Sea,” said activist Nguyen Van Phuong, 29, referring to the 1988 hostilities.

Though Vietnam opposes China’s occupation of the Paracel Islands and parts of the Spratly archipelago, its responses to Beijing’s activities in disputed areas are usually measured and often come days after those of other countries.

China is Vietnam’s biggest trade partner and the communist parties that run both countries have historically been close, although some Vietnamese leaders have said trust has been impacted of late.