Communist China has reinforced its troops along the Vietnam border in an escalating feud with Hanoi that also has led to cancellation of all Peking's aid projects in Vietnam, diplomatic sources here said yesterday.

In a move reminiscent of what Moscow did to China when the Sino-Soviet split began two decades ago, the Chinese told the Vietnamese Embassy in Peking on May 12 that all 20 aid projects and 800 technical specialists would be withdrawn by May 19, diplomats said.

The Chinese said funds for the projects, including a major bridge over the Red River in North Vietnam, were needed to feed, clothe and house 70,000 Chinese refugees that Peking says have been recently forced out of Vietnam.

The diplomats said the Chinese underlined the action by the release Wednesday night of a lengthy Overseas Chinese Affairs Office statement castigating Hanoi's treatment treatment of ethnic Chinese in Vietnam. Perking's statement said Vietnamese authorities had reduced or withdrawn rations, and even killed and wounded, long-time Chinese residents in a "despicable" effort to "persecute Chinese and evict them en masse."

In response to the statement by a Chinese spokesman, a spokesman for the Vietnamese Embassy in Peking said yesterday that "what he said does hot conform with the facts in regard to this matter," according to Western news agencies in Peking.

Both Hanoi's and Peking's actions bring great tension to China's southern border with Vietnam and likely do nothing to improve China's relations with its northern neighbor, the Soviet Union. Peking is in the midst of another round of border talks with the Soviets, but it has been bristling about a brief border raid by Soviet troops earlier this month. Chinese suspicions of Moscow's close relations with Hanoi, including the prospect of a Soviet naval depot being set up in southern Vietnam, have irritated Sino-Vietnamese relations for years.

The latest Chinese action cuts the Vietnamese off from a previously assured source of economic aid at a time when it is looking everywhere for help with its ailing economy. Further bad blood with Peking could threaten supplies of Chinese rice at a time of severe food shortage in Vietnam.

Diplomats here said they could see no rational explanation for Hanoi's sudden, calamitous moves against its ethnic Chinese residents, other than its long-standing suspicions of Chinese disloyalty coupled with its bloody war against Cambodian troops supplied with weapons by Peking.

Peking said Wednesday night that Vietnamese security officers had spread rumors throughtout the country about Chinese acts of aggression against Vietnam, thus worsening discrimination against ethnic Chinese. Speaking of efforts to destroy Chinese livelihoods and force Chinese out of Vietnam, Peking said, "The Vietnamese government should bear full responsibility for all the consequences arising from these unwarranted measures."

The East German news agency had earlier reported that Chinese advisers were being withdrawn from Vietnam, but yesterday European diplomats who have been in contact with the Chinese disclosed the full extent of Peking's economic cutoff of its fellow socialist state. The diplomats said that although the Chinese aid projects used Vietnamese workers, all the plans and funds were controlled by Peking.

Some sources said the Red River Bridge project had been halted before during times of Sino-Vietnamese tension in the past, but other sources said the delays were not significant.

Sources said the Chinese said the Chinese had reinforced their troops on the Vietnamese border within the last few months, apparently in response both to the sudden flood of refugees into Yunnan and Kwangsi provinces and to a spate of hostile incidents involving Vietnamese forces on the other side.

There have been reports for some time of pulled-up border stakes, shouting matches and scuffles between Chinese and Vietnamese in the border region. About 30 Vietnamese were reportedly killed during a clash in early February, which diplomats have concluded was a calculated attempt by the Chinese to "discipline" Hanoi.

The heaviest concentration of Chinese in North Vietnam, who are thought to make up the bulk of the refugees, include many shopkeepers in Haiphong whose businesses were recently closed by government order. Hanoi has also reportedly taken action against a non-Chinese minority tribe, the Nungs, who have resided in North Vietnam for a few generations but remain sympathetic to Peking.