According to the LA Times, there is an increase in tensions between China and Vietnam. This has gotten to the point in which the Chinese are running live fire drills in the area. As Vietnam grows economically, China is also expanding. This thing doesn't just involve Vietnam, but also the Philippines and other SE Asian countries. Problem--The world is actually infinitely tied into the Chinese manufacturing sector. You can't go to Walmart without seeing "Made in China" labels, but we are also increasingly seeing more "Made in Vietnam" labels too. Apple iPhones are made in China. Nikon cameras are made in China and Thailand. Some of my iZod shirts are made in Vietnam. So, why then tensions? It's complicated.
To get an idea about the bad mojo between the countries, you have to go back to 1979. Much of those tensions were related to the Chinese support of the Khmer Rouge in Cambodia during the 70s. Cambodia increasingly became confrontational with Vietnam with border incursions. Given that both governments at the time were Communist, it shows us that nationalism trumps ideology any day of the week. The end result was that Vietnam got pissed and promptly invaded Cambodia, which triggered the 1979 response from the Chinese. The fact that the Chinese supported Pol Pot makes sense, since he was trying to initiate every single rule in Mao's Red Book into reality. Ideologically, the Khmer Rouge were more aligned with the Chinese. Historically, Vietnam has always resisted China. China seems to view Vietnam as sort of a rogue province. Sort of like Tibet, but you know how that worked out. Vietnam has viewed China with caution. It seems to be in their historical DNA. The Truong Sisters are national heroes for resisting the Han Dynasty Chinese, so it makes sense that the Vietnamese would have an inherent sense of caution. The fact that China has invaded and dominated Vietnam historically at least 4 times doesn't seem to lend validation towards any sort of comfort with China. It is sort of like Thailand's relationship with Burma. They have to cooperate to a certain extent, but there is a history of wars and confrontations between them.
The problem today is economic. According to NPR, the South China Sea supposedly has numerous mineral deposits and natural gas pockets. Ultimately, it may not be just a Vietnam/Chinese problem. It may be a regional problem that can't easily be solved as the SE Asia economies also rebound.
For a little background, you may want to look up the Sino-Vietnamese war of 1979.
This is the Vietnamese perspective of that war.
The Chinese perspective
Some French News Footage of the conflict.