Background Briefing:
China and Vietnam: Properly
Handling Maritime Issues
Carlyle A. Thayer
October 29, 2014
[client name deleted]
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
August.
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
Thayer Consultancy
ABN # 65 648 097 123
2
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.
Suggested citation: Carlyle A. Thayer, “China and Vietnam: Properly Handling
Maritime Issues,” Thayer Consultancy Background Brief, October 29, 2014. All
background briefs are posted on Scribd.com (search for Thayer). To remove yourself
from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key.
Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.
China and Vietnam: Properly
Handling Maritime Issues
Carlyle A. Thayer
October 29, 2014
[client name deleted]
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
August.
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
Thayer Consultancy
ABN # 65 648 097 123
2
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.
Suggested citation: Carlyle A. Thayer, “China and Vietnam: Properly Handling
Maritime Issues,” Thayer Consultancy Background Brief, October 29, 2014. All
background briefs are posted on Scribd.com (search for Thayer). To remove yourself
from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key.
Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.
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