Anti-China riots at a steel plant in Vietnam left one Chinese worker dead and 100 injured, officials said Thursday, as unrest triggered by an escalating territorial dispute spreads across the communist country.

Beijing's deployment of a deep-water drilling rig in contested waters has sparked the worst anti-China backlash in Vietnam in decades, with protests in major cities and angry mobs torching foreign-owned factories.

Worker protests have spread to 22 of Vietnam's 63 provinces, Vietnam's minister of planning and investment said Thursday, calling for "tough measures" to bring the situation under control before alarmed foreign investors pull out of the country.

The latest riots broke out Wednesday at a steel mill owned by Taiwanese industrial conglomerate Formosa in Vietnam's central Ha Tinh province, around 500 kilometres from Hanoi.

"One Chinese male worker was killed in the chaos," Dang Quoc Khanh, a Ha Tinh local official, told AFP, adding that three houses at the Formosa plant for Chinese workers had been destroyed.

Local police told AFP they were working to identify the body of the victim.

A Taiwanese diplomat said that 100 Chinese workers had been injured.

"The rioters have gone but we are all still concerned they might come back," Ambassador Huang Chih-peng said, adding that no Taiwanese nationals were hurt.

A doctor at the emergency department of Ha Tinh provincial hospital said medical staff were treating several Chinese patients for injuries.

- Arguing over islands -

China and Vietnam are embroiled in long-standing territorial disputes in the South China Sea over the Paracel and Spratly islands, which both claim.

Tensions have risen sharply since Beijing moved a deep-water drilling rig into waters that Hanoi claims -- a move Vietnam has denounced as "illegal".

The widespread unrest has broken out since Vietnam's communist rulers -- who usually tightly control dissent -- allowed rallies against Beijing at the weekend.

Prime Minister Nguyen Tan Dung described the situation as "very serious" and said that, while the recent groundswell of patriotism was "the correct thing", instigators who broke the law would be punished, according to a statement on a government website.

In the southern province of Binh Duong, riot police were deployed Wednesday after anti-China riots and arson attacks forced several factories to temporarily suspend operations, including a supplier for Nike and Adidas.

Police said they had detained some 500 people after nearly 20,000 workers poured onto the streets Tuesday and a hardcore began looting and attacking security guards and factory management before setting fire to at least 15 factories.

Export-orientated manufacturing is a key pillar of Vietnam's economy, with high-profile firms -- from electronics giants such as South Korea's Samsung to US sportswear companies -- producing goods there.

Taiwan is one of the top foreign investors in Vietnam.

Formosa said the trouble had begun when Vietnamese workers at its plant staged a strike Wednesday which quickly became violent.

Workers began "attacking some Chinese workers and damaged offices and equipment," Formosa said in a statement.

"Chinese workers under attack were evacuated by police," the statement said, adding that local authorities had forced the rioting workers to disperse.

"The company is still assessing financial damage," it added.

Vietnam's Minister of Planning and Investment Bui Quang Vinh said Thursday that some 400 businesses had "been smashed".

"I have asked the prime minister for tough measures," he said.

"The image of our investment climate, which we have built up painstakingly over 20 years with many good records, is being affected," he said, according to Lao Dong online newspaper.

"Production in this quarter will seriously be down," he added.

There have been repeated skirmishes near the controversial oil drilling rig in recent days involving vessels from the two countries, with collisions and the use of water cannon.