China has confidence that it can work with the Philippines to return to a healthy relationship, Beijing's vice foreign minister said on Wednesday, after the two countries locked horns over a recent arbitral ruling on the South China Sea.

Speaking on the sidelines of a regional summit in Vientiane, Laos, Liu Zhenmin said that China and the Philippines had had "thousands of years" of good relations.

"In the past 30 years, the relationship has been very smooth, it's only in the past few years, because of some problems known to all, the relationship has been affected," he said.

"China has confidence that it can work with the Philippines to progressively improve our relationship," he said, adding that ties with the new government of Philippines President Rodrigo Duterte had started well.

SOUTHCHINASEA-RULING China's Vice Foreign Minister Liu Zhenmin speaks during a news conference in Beijing, July 13, 2016. Photo: China Daily/via REUTERS

Liu was referring to an international arbitration case, brought and won by Manila, which ruled in July that China's building of numerous artificial islands was illegal and its claims to most of the South China Sea had no legal basis.

He said the two countries were also looking into setting up a hotline to tackle emergencies in the disputed South China Sea. China and Southeast Asian nations have been discussing the hotline since 2015.

Liu did not respond to questions about photos published by the Philippines' defense ministry showing what it said were Chinese boats near a disputed shoal in the South China Sea, just hours before Southeast Asian nations were due to meet China's premier at the summit.

China claims most of the potentially energy-rich sea, through which $5 trillion in ship-borne trade passes every year, and rejects the rival claims of Vietnam, the Philippines, Brunei, Malaysia and Taiwan.