[NGW Magazine] Vietnam Gives Way to China

What a difference a few weeks can make. In mid-June, Vietnam was resisting its larger neighbour to the north: its on-again, off-again antagonist and long-time Communist partner, China.

A drilling ship on contract to international firm Talisman-Vietnam has started working in an area about 400 m off the Vietnamese coast in the country’s UN-mandated Exclusive Economic Zone (EEZ).  Since 2015, Talisman-Vietnam has been part of the Spanish-owned Repsol group.

The area in question, Block 136-03, also lies within China’s so-called U-shaped “nine-dash line” marking its South China Sea claims. China claims more than four fifths of the South China Sea, based on what it describes as “historical claims.”

Yet, backlash from Beijing over Vietnam’s move was swift and strong. In a few weeks, reports started trickling out of Hanoi that the Vietnamese government would cease drilling activities. The BBC was one of the first international media outlets to report on Hanoi’s decision.

A source in oil industry in southeast Asia told the BBC that the government in Hanoi ordered Repsol to leave the area – just days after the company had confirmed the existence of a major gas field.  The reports were later corroborated by a Vietnamese diplomatic source.

The industry source said that Repsol executives were told by the Vietnamese government that China had threatened to attack Vietnamese bases in the Spratly Islands if drilling did not cease. Other subsequent reports said that a decision to stop drilling was made following intense debate among a divided Vietnamese politburo.

Code of Conduct still elusive

The Association of Southeast Asian Nations (Asean) foreign ministers and their counterparts from several other countries met during the first week of August for their  50th ministers’ meeting in Manila.

One of Asean’s long term goals has been to try to convince China to sign off on a Code of Conduct in the South China Sea. That goal has been an elusive one for years as Beijing tentatively agrees to talk, then backs off, remains ambiguous or just changes its mind as it sees fit.

However, after the Permanent Court of Arbitration at The Hague issued its historic ruling on July 12, 2016 largely denouncing China’s South China Sea claims and activities, Beijing has been more open on accelerating talks to develop a code of conduct.

This year’s meeting saw some of the same dynamics unfolding as previous ones, including Vietnam pushing a little harder than its fellow Asean members.  By August 5, according to a Reuters report, ministers had failed to release the customary communique at the end of a high-level meeting after what diplomats said was a lack of consensus about how to refer to disputes in the South China Sea.

Some Asean diplomats said that Vietnam, one of four Asean members with overlapping South China Sea claims with Beijing, caused the delay and wanted the text of the communique to mention the need to avoid land reclamation and militarisation. Other reports said there had been disagreement whether to make oblique references to China’s rapid expansion of its defence capabilities on artificial islands, built in disputed waters of the South China Sea.

By the next day, however, Asean issued a release that said militarisation was to be avoided and noted concern about island-building. The text also “emphasized the importance of non-militarisation and self-restraint.”

Asean and China also adopted a negotiating framework for a code of conduct , which many claim is just another delaying tactic by Beijing as it continues to develop infrastructure on its artificial islands.

Though Asean holds on to hope for an eventual code of conduct, many analysts think otherwise.

“No, I don't think the code of conduct discussions will help much,” Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations (CFR), told NGW. “I think Asean is still too divided on China policy, that a non-binding code really doesn't mean much, and that we're years from a binding code, if that ever happens at all,” he said. “I don't think the discussions will help cool tensions much and I certainly don't think they're going to help Vietnam in any way at all.”

A professor of Asia-Pacific Strategic Studies at Australian University, Bates Gill – who is also an expert on Chinese foreign policy and a former director of the Stockholm International Peace Research Institute – agrees with this assessment.

He told NGW thatthe “the code of conductprocess is highly unlikely at this stage to do anything to address this particular dispute between China and Vietnam, or resolve the larger set of disputes in the South China Sea, or check China's advances to impose faits accomplis in the area.”

He gave two reasons for this: “First, China doesn’t see the code of conduct as a process by which it would accept the other claimants’ positions over disputes.  Second, only a few Asean countries – such as Vietnam – have a direct territorial and security stake in the disputes in the South China Sea. As such, other Asean members don’t have as strong an interest in extracting the kinds of concessions from China that Vietnam would like to see.”

What next for Vietnam?

While Asean members debate the issue internally and China stalls for time, Vietnam is still left in a quandary. It has been coerced by a stronger power to cease hydrocarbon development in its own EEZ.  Other reports, though not confirmed, up the ante even more, claiming that China intends to drill for gas in the same area that Vietnam just vacated.

Gill said that Vietnam now has few options. “They could choose to escalate the confrontation, but that is unlikely to end well. Vietnam-US relations are certainly not at a level where US support could do anything to reverse the situation and at the end of the day the US doesn’t have a direct and significant interest in this particular China-Vietnam dispute,” he said.

He added: “Hanoi should consider accelerating and deepening its security relations with Washington, but that will be a lengthy process at best and would not immediately address this current incident.”

Kurlantzick sees the situation unfolding differently. “I still think Vietnam has some leverage,” he said. “They are building stronger ties with Japan, Australia, India, and others.  They are modernising the Vietnamese maritime forces; they have gone on an aggressive arms-buying spree. They can still push back. I wouldn't be surprised to see the issues of blocks come up again in the next year or two.”

Tim Daiss