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China and Vietnam: Properly Handling Maritime Issues

Carlyle A. Thayer, C3S Paper No.2075

The Vietnamese Foreign Minister and Chinese State Coucilor met in Hanoi on Monday (October 27) and agreed to appropriately handle the maritime issues. This latest move is followed by several exchanges between Vietnam and China recently: the meeting between Prime Minister Nguyen Tan Dung and Prime Minister Li Keqiang on the sidelines of an Asia-Europe Summit Meeting in Italy last week; Vietnam defence and public security ministers’ visits to China this month; and Vietnamese special envoy and Politburo member Le Hong Anh’s visit to China in Q1. Do you think these meetings and agreements will work to settle the complicated maritime disputes between China and Vietnam, following the oil rig crisis this May?

ANSWER: The verbal understanding and agreements reached between Councilor Yang Jiechi and Deputy Prime Minister Pham Binh Minh were not designed to settle their maritime disputes. These verbal agreements were designed to reset bilateral relations in other areas so they could go forward. As for South China Sea disputes, these recent verbal agreements are a form of damage limitation to prevent further deterioration of bilateral relations. They also set a framework for the possible management of maritime disputes. Both sides will now resume protracted discussions at government-to-government working level. Neither China nor Vietnam has backed away from their assertions of indisputable sovereignty.

Q2. What do you think the situation in South China Sea involving China and Vietnam should be in short, medium and long term?

ANSWER: The South China Sea disputes between China and Vietnam should lay dormant for the next six months so as not to influence the APEC, ASEAN and East Asia Summits to be held in November this year and the next round of ASEAN-centred multilateral meetings in the first half of next year. In the medium term, China can pick and choose any initiative by Vietnam to develop its hydrocarbon resources to mount a show of force in protest. In the medium to long term China is likely to redeploy the HD 981 in disputed waters. In the long-term China also will continue to shore up its physical presence in the South China Sea through the deployment of naval warships, civilian law enforcement agency vessels, fishing fleets and a newer and bigger HD 982. These deployments are likely to lead to incidents at sea. It is unlikely that a binding Code of Conduct with the status of a treaty will be concluded thus leaving the door open for China to unilaterally justify any action to assert its sovereignty that it cares to take.

Q3. The Vietnamese Prime Minster is in India and the two countries are expected to sign some deals for exploration in South China Sea today. What do you think about the Indian ambition/role in the South China Sea dispute by increasing oil and gas cooperation in South China Sea with Vietnam?

ANSWER: India has been involved in hydrocarbon exploration in Vietnamese waters since 1988. Indian oil companies are primarily motivated by commercial considerations. India oil companies do not want to become the proverbial meat in the sandwich between China and Vietnam. Indian companies have been reluctant to become involved in oil blocs that show little prospect of hydrocarbon reserves. They returned Block 106 for example. The original agreement between ONGC Videsh and PetroVietnam concerns a bloc that is not in waters disputed by China. The Indian government does not want its oil companies to be seen to buckle under Chinese pressure, however India does not want to be drawn into a direct confrontation with China by accepting oil blocks in disputed waters. China has been circumspect by declaring that it will not oppose oil exploration that is legal but China will oppose any commercial activities that infringe on Chinese sovereignty, that is, are conducted in waters claimed by China.

(Article reprinted with the permission of the author Carlyle A. Thayer, Emeritus Professor,The University of New South Wales at the Australian Defence Force Academy, Canberra email:

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