These actions seriously infringe Viet Nam's sovereignty over the Paracel Archipelago, threaten the regional peace and stability as well as security, safety and freedom of navigation and overflight in the East Sea," Foreign Ministry spokesman Le Hai Binh said in a statement Friday using Vietnam's term for the sea.
"Viet Nam asks China to immediately stop such erroneous actions," he added.
The statement said diplomatic notes had been issued to China's embassy in Hanoi and to United Nations Secretary General Ban Ki-moon to protest at Beijing's activities
Tensions between China and its neighbors have been on the rise since China began building up islands in the waterway with artificial harbors and airport facilities capable of handling military aircraft.
The Chinese government has offered few details in response to the missile claim, while accusing Western media of "hyping up" the story and saying China has a legitimate right to military facilities on territory it views as its own.
While many nations have claims to the South China Sea with its busy shipping lanes, teaming fisheries and the likelihood of vast petroleum reserves, the dispute is especially intense between Vietnam and China.
Woody Island, the largest of the Paracel Islands has been under the control of Beijing since 1956. Although Woody Island is also claimed by Taiwan and Vietnam, in 1974, the then South Vietnamese government suffered a naval loss to China in a battle over the Paracels.
While reports of the missile battery on Woody Island grabbed international attention China has also constructed a military helicopter base on Duncan Island. Both issues were mentioned in Vietnam's formal protest.
Australian Prime Minister Malcolm Turnbull also urged claimants to refrain from island-building and militarization in the South China Sea.
"We urge all claimants in the South China Sea to refrain from any building of islands, any militarization of islands, any land reclamation," Turnbull told reports during a press conference with his New Zealand counterpart John Key in Sydney, according to The Straits Times
Turnbull said both Australia and New Zealand wanted to see a lowering of tensions as he urged Chinese President Xi Jinping to resolve all disputes in the seas through legal means.
The Philippines also expressed grave concerns about the reports of missiles being deployed on Woody Island.
"These developments further erode trust and confidence and aggravate the already tense situation," its Foreign Ministry said in a statement.
Beijing has been angered by air and sea patrols the United States has conducted near islands China claims. Those have included one by two B-52 strategic bombers in November and by a U.S. Navy destroyer that sailed within 12 nautical miles of Triton Island in the Paracels last month.
"The deployment of a very sophisticated and lethal air defense system is no doubt in response to US aerial activities and the recent freedom of navigation operational patrol near Triton Island," said Carl Thayer, a professor at the University of New South Wales in Australia and an expert on the region.
"China's actions raise the stakes and risks for future US maritime reconnaissance patrols in waters surrounding the Paracels," he said. "The [Chinese air defense] system could also threaten carrier based planes coming to the assistance of a US Navy warship that was confronted by China during a future freedom of navigation exercise in the Paracels."
Source: Voice of America