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China-Vietnam oil dispute demonstrates volatility of competing South China Sea claims

29 May 2014

China moved a drilling rig to a position off Vietnam’s coast in early May, causing clashes that highlight the emergence of the South China Sea as a major potential flash point in the future. China’s increasing assertiveness in the area could have an important impact on the development of marine resources in an area thought to be particularly rich in oil and gas.

The red line shows China's claims over the South China Sea
The red line shows China's claims over the South China Sea

On May 3 China National Offshore Oil Corporation (CNOOC) moved a drilling rig to a position west of the contested Paracel Islands in the South China Sea, 120 nautical miles east of Vietnam's Ly Son Island and 180 nautical miles south of China's Hainan Island.

Vietnam said the rig site was on its continental shelf and in its Exclusive Economic Zone, and demanded that China remove it and its escort vessels and hold talks to settle the issue.
Hanoi dispatched coast guard and other vessels to the site, which it says were rammed and sprayed with water cannon by Chinese ships, and after weeks of clashes between both sides,  on May 26 a Vietnamese fishing boat sank after being rammed by a Chinese vessel (according to Hanoi) or trying to ram a Chinese vessel (according to Beijing).

The standoff at sea caused a wave of violent protests in Vietnam, aimed mainly at Chinese and Taiwanese-owned businesses and staff. Two Chinese citizens have been killed in the violence so far, and a number of Chinese plants ransacked and burned out in the provinces of Ha Tinh and Binh Duoung.

A group of 16 critically injured workers were employees of China Metallurgical Group Corp., a contractor for an iron and steel complex being built in Ha Tinh, according to Chinese state-run media.  Around 7,000 Chinese nationals were evacuated by sea and air from Vietnam, China’s state news agency Xinhua reported. An opinion piece published on the same site said the protests by "irrational rioters" would in no way strengthen Hanoi's "groundless claim over Chinese territory and surrounding waters in the South China Sea."

In 1974, the two countries fought the Battle of the Paracel Islands, which ended in a Chinese victory and complete control over the islands and surrounding waters. Oil exploration by China between the Paracels and the Vietnamese coast is seen in Vietnam as adding insult to injury.

Under the UN Convention on the Law of the Sea, countries are entitled to marine resources that lie within 200 nautical miles of their coastline or islands they own (in an area called the Exclusive Economic Zone). They also own mineral rights in the continental shelf that juts out from their territories. The smaller countries mostly follow these rules.

China, by contrast, ignores them to claim nearly the entire South China Sea. In 2009, the Chinese government filed a map of the South China Sea region with the UN. The map displayed a line, composed of nine dashes that followed the sea’s outline all the way around, leaving only a thin band of water for China’s neighbors along their respective coasts. This Nine Dash Line, as it is known, suggests that China claims the marine resources in nearly the entire South China Sea. The map above shows the extraordinary scale of China’s claim.

In the Spratly Islands in the southern part of the South China Sea, where China, Malaysia, Taiwan, Brunei, Vietnam, and the Philippines all vie for control, Chinese vessels fired upon Vietnamese commercial ships in 2011. And China has excluded Philippine fishing vessels from the waters surrounding the Scarborough Shoal in the east.

Meanwhile, in the East China Sea, Beijing is locked in an increasingly bitter dispute with Japan over the Senkaku or Diaoyu Islands, and US President Barack Obama has explicitly said that the US-Japanese defence pact covers the Senkakus.

China’s argument seems to be based on historical antecedents, harking back to a time when the Middle Kingdom controlled the whole region, both land and sea. But International law does not accept this. The Law of the Sea Treaty limits China to 200 nautical miles and its continental shelf.

China’s recent unilateral actions are causing the smaller regional players to close ranks. In late May, Vietnam signalled for the first time that it might join the Philippines in legal action against China.

Together, the two countries also hope to bring other claimant states such as Malaysia on board. So far, Malaysia has agreed to participate in trilateral dialogues with Vietnam and the Philippines to forge a common approach to the South China Sea disputes. The ASEAN's informal leader, Indonesia, has also moved closer to Vietnam and the Philippines. In recent months, Jakarta has openly criticised the Nine Dash Line doctrine as a quasi-legalistic claim with no basis in international law, while finalising a new border agreement with Manila, ending two decades of territorial squabbles.

Manila and Hanoi are also moving to establish regular joint naval exercises and plan to hold high-level dialogue between leaders and strategists on a range of issues, but with a major focus on the South China Sea. A Philippine-Vietnam strategic alliance could form the front line in an axis of containment to the south and east of China.

Japan is adapting its post-War constitutional restrictions to play an increasingly important military role in the region, and Washington is supporting Tokyo playing a greater role in enhancing the deterrence and maritime capabilities of weaker ASEAN states threatened by China’s overweening regional ambitions.

By pushing for the doctrine of collective self-defence, the Abe administration is paving the way for a more robust Japanese defence role in the region, with the ultimate aim to allow Japanese Maritime Self Defense Forces (MSDF) to be in a position to assist American troops if a war were to erupt in the South China Sea, presumably between China and the Philippines, another US treaty ally. It will also in a position to provide more concrete support to Vietnam.

Meanwhile, Australia and India have also emerged as a counterbalance to China's rising military profile. Canberra has upgraded its joint-military exercises with Washington, with a growing focus on maritime military operations, and the new nationalist BJP government in India, led by Narendra Modi, is also expected to step up India's strategic footprint in Southeast Asia.

Overall, what is clear is that China's relentless territorial push into adjacent waters has inspired growing strategic cooperation among a wide range of states formerly on different sides of the 20th Century’s major political divide. What is also clear is that these countries are seeking to compensate for Washington's recent strategic retrenchment.

But by coordinating their efforts, neighbouring countries can significantly raise the price paid by China for its imperialist ambitions in the area.

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