South Korea and China are holding diplomatic consultations over the sinking of a Chinese trawler whose crew are accused of illegal fishing, officials said Thursday.

One Chinese crewmen died and another was missing after the boat's crew clashed with South Korean coastguards in the Yellow Sea on Saturday.

China has demanded that South Korea pay compensation for the sinking of the 63-tonne fishing boat and punish the crew of the coastguard ship involved.

The South has proposed a joint investigation with China, saying the clash was prompted by illegal fishing.

"Consultations are under way through diplomatic channels between the two countries," a foreign ministry spokesman told AFP.

Yonhap news agency said the two sides have exchanged messages, suggesting the incident will not spark a major diplomatic row.

The boat capsized after ramming into the 3,000-tonne coastguard ship. Eight fishermen were rescued. Five were picked up by nearby Chinese boats while three were detained by South Korea's coastguard.

The coastguard said the Chinese brandished iron pipes, clubs and shovels when two small boats from the South Korean ship approached their trawler, injuring four officers.

South Korean TV showed a video of the clash filmed by the coastguard, which appears to show the fishermen fending off the officers with metal bars.

Illegal fishing by Chinese vessels is common in South Korean waters. The coastguard said 332 Chinese boats were caught last year.

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