The two sides held a joint ceremony at a key border crossing to demarcate the boundary and set up markers, which China's official Xinhua news agency called "a significant event in bilateral relations."

More than 100 government officials, including Chinese vice Foreign minister Wu Dawei and Vietnamese deputy prime minister Pham Gia Khiem, were present, it said.

The ceremony was held at a crossing between the Vietnamese city of Lang Son and the Chinese city of Pingxiang.

"It (the demarcation) is a significant historic event in bilateral relations and satisfies the long-term and ardent aspirations of the two peoples," Pham said at the ceremony, according to Xinhua.

"It sends an important signal to the whole world that relations are developing soundly."

Beijing and Hanoi -who normalised relations in 1991 and are now major trade partners -have sought to overcome a history of conflict and distrust.

They said in late December they had settled the land border, only hours before a deadline was to expire.

The anniversary of the war along that border passed last week with China largely ignoring it.

China invaded its southern neighbour February 17, 1979, starting a war that continued as a low-intensity conflict through most of the 1980s.

Discussion of the war is taboo in China.

According to non-Chinese accounts, China moved against Vietnam to punish it for invading Cambodia in December 1978 and bringing down genocidal tyrant Pol Pot, whose Khmer Rouge communist regime Beijing backed.

Agence France Presse - February 25, 2009