Wednesday, July 26, 2017

South China Sea: Did China Threaten Force?

Background Briefing:
South China Sea: Did China
Threaten Force? Did Vietnam
Withdraw from Block 136?
Carlyle A. Thayer
July 25, 2017
Our analysts are struck by how little comment has been made on China’s reported
threat to use force against Vietnam and Vietnam’s decision to withdraw the oil
exploration vessel from Block 136 by those who track the South China Sea in details.
We would appreciate your assessment.
Q1. Is it possible Bill Hayton is exaggerating what's happened? Do we know whether
this is a temporary pause or full pullback, or whether it was Vietnam's decision or
Repsol's, and so forth?
ANSWER: My sources say China called in Vietnam's Ambassador to Beijing and
delivered a demarche. It is unclear whether it was a demand to stop drilling in
contested waters or was an actual threat to use force. I have reservations about
China's Foreign Ministry being so explicit about the use of force.
The Vietnamese Ambassador reported back to the Politburo and they met on or
about 14 July to deliberate. They made the decision to ask Talisman-Vietnam, a unit
of Repsol of Spain, to stop drilling and leave Block 136-03.
By all accounts, the decision was made by Vietnam's leaders. Whether the
withdrawal of the oil-drilling vessel is permanent or temporary is not known with
certainty. A complete cessation is unlikely; a pause is more likely. A pause gives
Vietnam time to raise the matter bilaterally with China and to lobby other states for
support. Vietnam also needs time to devise a strategy to respond and avoid, in the
meantime, any confrontation that they would loose.
Q2. How how much of a game-changer should we treat these developments?
ANSWER: It would be an unprecedented and alarming escalation if China actually
threatened to use physical force against a Vietnamese-occupied featured in the
Vanguard Bank area or in the Spratly islands. Vietnam has fifteen technical service
support platforms built on stilts in the Vanguard area. These cannot be defended
and China could easily take one or more and destroy the structures.
There is a pattern of increased Chinese bellicosity across the board from challenging
U.S. military flights in the region to conducting joint naval exercises with Russia in
the Baltic Sea and sending an intelligence collector to eavesdrop on Exercise
Talisman Sabre underway between Australia and the United States.
Thayer Consultancy
ABN # 65 648 097 123
China may be reacting to a number of trends that it perceives as threatening: U.S.
arms sales to Taiwan, resumption of freedom of navigation patrols and over flights
by the Trump Administration, continual U.S. criticism of China for not doing enough
over North Korea, threats by the U.S. to impose tariffs on Chinese steel, and actual
and potential resumption of oil exploration by Vietnam and the Philippines,
China may be gambling that President Trump will not respond in the South China
Sea for three reasons: (1) the Trump Administration is mired in dealing with
domestic issues (repealing and replacing Obamacare and dealing with allegations of
Russian interference in the U.S. elections); (2) because Trump has set priority on
defeating Islamic State in Syria and is encountering Russian pushback; and (3)
because of the North Korean issue - ballistic missile test and a possible test of a
nuclear device - and no clear means to halt these developments.
Suggested citation: Carlyle A. Thayer, “South China Sea: Did China Threaten Force?
Did Vietnam Withdraw from Block 136?,” Thayer Consultancy Background Brief, July
25 , 2017. All background briefs are posted on (search for Thayer). To
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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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