Rescuers are searching for 23 missing people after a Vietnamese ship carrying 62 crew members sank in the South China Sea, Chinese state media reported Sunday morning.

The cargo vessel Khoi Nguyen 18 encountered trouble near Yongshu Reef, also known as Fiery Cross Reef, state broadcaster CCTV reported, adding that 39 people had been rescued.

A Chinese rescue vessel first spotted what was believed to be a distress signal from the endangered ship shortly before 6:30 pm on Saturday (1030 GMT), state news agency Xinhua said.

Six Chinese vessels and a rescue helicopter as well as one Vietnamese vessel were conducting search and rescue operations in the area, Xinhua said.

According to authorities in the Chinese island province of Hainan, the Khoi Nguyen 18 is a Vietnamese-registered ship measuring just under 70 metres in length, Xinhua added.