BEIJING, JAN. 21 -- China and Vietnam so far have avoided the border hostilities that had come to be expected in January in recent years, western diplomats said today. An unconfirmed report said the two sides had agreed on a cease-fire in the long-running hostilities.

January is normally a time of intensified military activity because the dry weather facilitates movement of troops and equipment. But this month has been quiet on both sides of the border, diplomats said.

A Japanese newspaper, the Yomiuri Shimbun, reported yesterday that Chinese and Vietnamese officials have reached an agreement aimed at improving relations, including a cease-fire along the border.

Yomiuri, quoting officials in Hanoi, said Li Shichun, China's ambassador to Vietnam, and Vietnamese Foreign Minister Nguyen Co Thach agreed last month in Hanoi to reopen marketplaces along the border zone and also to stop broadcasting negative propaganda at each other, the report said.

Asked about the Japanese report, a Foreign Ministry spokesman said he was not aware of the talks or of an agreement. "There is no way for me to confirm these reports," he said.

But there was no denying a change of atmosphere on the border. Early last January, China and Vietnam reported fierce fighting, with each side claiming that it had inflicted heavy casualties. China claimed at the time that Vietnamese troops had launched "provocative invasions" into Chinese territory.

Reports of this year's lowered tension came as Cambodian Prince Norodom Sihanouk, head of an anti-Vietnamese coalition, held a second round of talks with Vietnam-supported Cambodian Premier Hun Sen in France. Meeting yesterday and today near Paris, Sihanouk and Hun Sen discussed a possible timetable for the withdrawal of Vietnamese troops from Cambodia.

The official New China News Agency quoted Sihanouk's son, Prince Ranariddh, as saying that the atmosphere was not as warm as it had been in their first meeting last month. He said the two disagreed on a number of issues, including the possible timing of a Vietnamese withdrawal. Sihanouk reportedly proposed that it take place this year, or no later than the spring of 1989. {The Associated Press reported from Paris that the premier said today he had proposed a two-year timetable.}

The talks could have wide-ranging impact because of big-power involvement in Cambodia. China has supported Sihanouk and his resistance group with money and weapons. Vietnam depends heavily on the Soviet Union for arms and aid as it continues its nine-year-long occupation of Cambodia.

China's senior leader, Deng Xiaoping, has rejected offers of a summit meeting with Soviet leader Mikhail Gorbachev, repeating the condition that the Soviets must first urge the Vietnamese to withdraw from Cambodia.

China and Vietnam have a long history of conflict, but they struck an alliance during the Vietnam war. In late 1978, however, Vietnam invaded Cambodia and overthrew the Chinese-supported Khmer Rouge government.

Recently, Sino-Soviet relations have improved somewhat. China's news agency reported yesterday that for the first time in 20 years, China has been repairing Soviet ships. It quoted an official as saying 10 such ships were fixed in Chinese ports in 1987.