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BEIJING (Reuters) - China and Vietnam's Communist parties have a "shared destiny" and there is great potential for bilateral economic cooperation, a senior Beijing official said on Tuesday on a visit to Vietnam, which has clashed with China over the South China Sea.

Although both nations are under Communist rule, they are deeply suspicious of each other and relations have been strained over the past few years because of disputes in the strategic South China Sea.

China has appeared uneasy at Vietnamese efforts to rally Southeast Asian countries over the busy swathe of sea as well as at its neighbour's growing defence ties with the United States, Japan and India.

In July, under pressure from Beijing, Vietnam suspended oil drilling in offshore waters that are also claimed by China.

However, Hanoi and Beijing have also tried to prevent tensions from getting out of control, and senior officials from two countries make fairly regular visits to each other.

Liu Yunshan, a member of the Chinese Communist Party's elite Standing Committee that runs the country, told Vietnamese Prime Minister Nguyen Xuan Phuc in Hanoi, in the first such high level visit since relations deteriorated in July, that the two parties "constitute a community of shared destiny with strategic significance", China's official Xinhua news agency reported.

"The sound and stable development of the bilateral ties will help to solidify the ruling position of the two parties, which is in the interests of the two parties and people of the two nations," Xinhua cited Liu as saying.

"The two economies are highly complementary, with huge potential for practical cooperation," the report quoted him as saying.

Phuc told Liu that two countries should strive to maintain peace and stability in the South China Sea and avoid all activities that could increase tension, the Vietnamese government news website reported.

He also urged China to "have substantial discussions soon" with Southeast Asian nations to reach a code of conduct in the disputed sea, the report said.

While both the Chinese and Vietnamese reports made no direction mention of the South China Sea by Liu, they quoted him as suggesting the two countries "properly manage and control their divergences, so as to create favourable environment for bilateral cooperation".

China claims nearly all the South China Sea, through which an estimated $3 trillion in international trade passes each year. Brunei, Malaysia, the Philippines and Taiwan also have claims.

(Reporting by Ben Blanchard in Beijing; Additional reporting by Mai Nguyen in Hanoi; Editing by Michael Perry/Mark Heinrich)

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Reuters