South China Sea: China vs. Vietnam

Posted on June 14, 2011

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China’s People’s Liberation Army (PLA) naval frigate ‘Mianyang’ steams through the swell as it approaches Sydney Harbour on September 20, 2010. (Torsten Blackwood/AFP/Getty Images)

BEIJING, China — Amid the escalating dispute over territorial waters in the South China Sea, China’s rivals are toying with a simple idea: change the name of the sea.

A petition drive from Vietnam to change the South China Sea’s name to the Southeast Asia Sea is gaining followers. Meanwhile, the Philippines has another proposal.

>> China ‘will not use force’ in South China Sea disputes

“When people keep referring to the South China Sea, there is a subliminal message that this sea belongs to a country whose name appears in the name,” Commodore Miguel Jose Rodriguez, Armed Forces spokesman, said recently, according to the Philippines Inquirer. “We in the Philippines should call it West Philippine Sea.”

It seems a growing number of supporters believe names mean much when it comes to territory. The potentially oil, gas and mineral-rich Spratly and Paracel Islands — the heart of the territorial dispute between China and its South Sea neighbors — have long been known to China as the Nansha and Xisha Islands (with still different names in Vietnam).

Yet the name issue only skims the surface of serious tension over the past few weeks between China and its neighbors, and potentially, the United States. On Monday, Vietnam, chafed by what it called aggressive interference by Chinese boats in its waters, held nine hours of live-fire drills in the area. China accused Vietnam of interfering with its sovereignty and denied instigating an attack.

Vietnam has erupted in unusual citizen protests over China’s actions. Meanwhile, a Filipino politician is calling for a nationwide boycott of Chinese-made goods to respond to China’s “bullying.”

Six countries have disputed claims to water and island territories in the South China Sea, but China claims far more than any other and now appears to be working to solidify an expanded reach. Experts say its latest spats with Vietnam and the Philippines are a further indication of China’s increasingly aggressive stance in regional and world affairs. The question now is how to calm the situation, a point where the United States is likely to be involved.

For its part, China seems to be blaming the conflict on its neighbors. In a recent editorial, the state-run China Daily newspaper said as much. Yet at the same time, China is offering conflicting messages with a charm campaign in the region meant to quell fears over its potential aggression.

“Given its adherence to developing good-neighborly relations with Asian nations, China is unwilling to have trouble with its neighbors over maritime territorial disputes,” the paper wrote. “To our regret, China’s goodwill and tolerance seem to have played on deaf ears recently. The Philippines and Vietnam have both chosen to provoke China over this issue again.”

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But the spat is beyond regional. Vietnam wants international support, while China on Tuesday demanded that other countries (more precisely, the United States) mind their own business. A Foreign Ministry spokesman said China’s position on the sea had been “clear and consistent.”

“We hope countries not related to the disputes over the South China Sea will respect the efforts of directly related countries to resolve the issue through direct negotiations,” said spokesman Hong Lei.

Yan Xuetong, director of international studies at Qinghua University, said in an interview that U.S.-China relations will only be affected if the United States becomes provocative on the issue. A visit to China by U.S. Secretary of State Hillary Clinton later this month will be important in part because of the South China Sea issue.

“I don’t think America will get too involved in this event at the moment,” Yan said.

Li Jiming, a South China Sea expert at Xiamen University, agreed.

“We should sit down and bilateral negotiations should be held, neighboring countries should keep peace in mind. No side will benefit if the situation get more tense,” said Li. “Multilateral negotiation can only make the situation more complicated. There is not much America could do.”

Meanwhile, some analysts are predicting further conflict amid what appear to be mixed messages from China. In an essay published in The Diplomat on Sunday, Minxin Pei, Carnegie Endowment for International Peace, described the conflict as “dangerously close to escalating.”

“… [A]t this stage, an ugly and potentially dangerous clash with Vietnam is the last thing China wants,” he wrote. “But at the same time, Beijing also needs to show that it won’t compromise on territorial disputes.”

China-Vietnam: Weighing the Cost-Benefit of War in South China Sea Face-Off

In the recent skirmish over the South China Sea, both China and Vietnam are unclear about how much they stand to gain from the water space, but the potential costs are calculable, analysts say.

Just how much oil is beneath the South China Sea’s is unknown.

Some Chinese sources estimate it’s over 200 billion barrels, roughly 80 percent of Saudia Arabia’s oil reserves, but others say that’s an extreme exaggeration.

The benefits maybe unclear, but Beijing can calculate how much its mounting face-off with Vietnam over the sea space would cost the Chinese economy.

At face value, the price tag is US $12.7 billion– the amount of Vietnam’s trade deficit with China in 2010, according to Vietnam’s General Statistics Office.

That’s seven percent of China’s trade surplus from last year, a small but significant chunk of the country’s earnings.

Still, analysts say all-out war would mean a much more complicated calculation of losses.

Responding to the six-hour-long live-fire drills Vietnam conducted in the South China Sea– one hour for each of the countries and territories laying claim on the waters, China’s Foreign Ministry spokesperson Hong Lei announced that China “won’t use force” to respond to what it sees as offensives in an area where the People’s Republic claims to have “indisputable sovereignty.”

“I think that economics definitely had something to do with the announcement,” said Nariman Behravesh, chief economist at the IHS Global Insight, a leader in economic analysis, on call from London.

It has growing trade links with all Asian economies, especially the countries interested in Spratly,” Behravesh said, referring to the disputed islands off China and Vietnam’s shared coastline.

Analysts believe that despite the ongoing deluge of strongly worded condemnations, accusing Vietnam of threatening Chinese autonomy in the region, China is likely to stand by its promise of detente.

“There is a way to measure how likely things are to lead to military confrontation,” said Dr. Donald K. Emmerson, Director of the Southeast Asia Forum at Stanford University.

Emmerson attended the 2011 Shangri-La dialogue in Singapore, after Chinese ships cut cords on PetroVietnam’s survey ships late last month. Then, China’s tone was conciliatory, until another subsequent attack on June 9, when another Chinese vessel cut cords on another PetroVietnam ship, in what Vietnamese Foreign Minister Nguyen Phuong Nga said was a “premeditated” offensive.

“China relies increasingly on the import of fuels from the Middle East. Those fuels come from the Malaca Straight, into the South China Sea. If China were to wage a war in the primary transit area for fuels, that would be an unwise decision,” Emmerson said,

That’s one reason not to go to war over the South China Sea.

Another reason for the Southeast Asian nations and territories laying claim to the sea– there are six in total, including Vietnam, the Phillipines and Taiwan– not to engage China militaristically would be to preserve geopolitical stability in the region.

“The border states realize that a full-scale war with tankers being blown up at sea would be so dangerous to the countries concerned,” he said, explaining that the international economy would be greatly shaken by the disruption of the key shipping route.

Half of the world’s merchant fleet by tonnage sails through South China Sea every year, Emmerson said.

“That’s a huge artery of global trade. Although it’s true that the South China sea is [the] main passage way, there are more costly alternatives, moving eastward through Philippines and Indonesia.”

As far as solutions, both Emmerson and Global Insight’s Behravesh see cooperatios in China’s future with its ASEAN business partners to the South.

And there’s precedent.

Emmerson explained that in July 2005, a joint marine seismic undertaking was founded by China, the Philippines and Vietnam — the signatories included companies like PetroVietnam — not the foreign ministers or prime ministers. It was in the name of joint work between the companies — to begin finding out how much oil was beneath the seabed.

“They at first wanted joint exploration and then joint exploitation.Then the project lapsed in 2008,” he added.

Where China clearly stands to benefit from an increased oil supply in its endless drive to fuel its growing economy, Vietnam also stands to benefit.

“I certainly think Vietnam has the capability through joint ventures to exploit the reserves,” said Behravesh, explaining that a win-win partnership on the oil could help cool geopolitical heat in the region and allow for the joint exploitation of the region’s resources.

IB Times

Vietnam Enlists Allies to Stave Off China’s Reach

HANOI, Vietnam — The archipelago called the Paracel Islands lies in the South China Sea 250 miles off the east coast of Vietnam, a series of rocks and reefs and spits of land that, to the undiscerning eye, appear as valuable as broken coral washed up on a beach.

But that archipelago and the nearby Spratly Islands are rich in oil and natural gas deposits, and so they are coveted by the nations that form a wide arc around the South China Sea. China, Taiwan and Vietnam have competing claims in the Paracels, while all three and the Philippines, Malaysia and Brunei have claims on the Spratlys or the waters surrounding them.

The most vociferous are Vietnam and its traditional rival, China. Indeed, no issue between them is more emotional or more intractable.

Tensions crept up another notch last month, after China announced plans to develop tourism in the Paracels, which the Chinese military has controlled since 1974. It was an inauspicious start to what the two governments had officially labeled their “Year of Friendship.”

The Vietnamese Foreign Ministry loudly denounced China’s move, as it usually does in these situations. But quietly, Vietnam has been doing more than just complaining; it has laid the groundwork for another strategy to pry the islands from China’s grasp.

Vietnam is pushing hard behind the scenes to bring more foreign players into negotiations so that China will have to bargain in a multilateral setting with all Southeast Asian nations that have territorial claims in the South China Sea. This goes against China’s preference, which is to negotiate one on one with each country.

In other words, Vietnam wants all parties at the same table to stave off China, the behemoth. This strategy of “internationalizing” the issue is one that smaller Asian countries like Vietnam may adopt more often as they wrangle with the Chinese juggernaut on many fronts. The thinking is: As China’s political power in the world expands, smaller nations will gain leverage over China only if they force it to negotiate in multilateral forums.

Vietnamese officials “are internationalizing the issue, and they’re doing it in a quiet way, not in a direct way,” said Carlyle A. Thayer, a scholar of Southeast Asia and maritime security at the Australian Defense Force Academy. “They say they want to solve it peacefully, but let the international community raise the issue.”

Analysts say a big test for this strategy will come this year, as Vietnam takes over the leadership of the Association of Southeast Asian Nations, or Asean. Vietnam is likely to use its position to try to persuade the countries to join territorial negotiations with China, analysts say. In November, Vietnam held a conference in Hanoi, its capital, where 150 scholars and officials from across Asia came to discuss disputes in the South China Sea — an opening salvo in the new strategy, analysts say.

“The kind of thing that I took away was that developments in the South China Sea had either deteriorated or had the potential to deteriorate,” said Mr. Thayer, who attended the workshop.

American military and intelligence officials say the South China Sea, which has some of the busiest shipping lanes in the world, is growing as a security concern because Beijing is increasingly emboldened to flex its naval muscles there. In the past two years, China has been more aggressive in asserting control over the area — detaining Vietnamese fishermen, increasing sea patrols and warning foreign oil companies away from working with Vietnam.

The United States takes no sides in these disputes, but American officials “remain concerned about tension between China and Vietnam, as both countries seek to tap potential oil and gas deposits that lie beneath the South China Sea,” Scot Marciel, a deputy assistant secretary of state, said in July while testifying before Congress. Mr. Marciel added that China had shown a “growing assertiveness” in regard to what it deemed its maritime rights.

Tensions over such rights plague China’s relations with many of its neighbors. Just last month, Japan protested Chinese plans to develop gas fields in the East China Sea.

For the Vietnamese, the South China Sea dispute is so emotional that it unites virtually all of them under an anti-China nationalist banner, even those in exile who usually abhor Vietnam’s ruling Communist Party. In Houston, a South Vietnamese enclave usually hostile to the Vietnamese government, a pop band proudly calls itself Hoang Sa, the Vietnamese name for the Paracels.

In December, Vietnam asked China to return fishing boats and other equipment seized from fishermen detained by the Chinese military near the islands. One Vietnamese news organization has estimated that China detained 17 vessels and 210 fishermen last year; the fishermen have all been released.

Also in December, the Vietnamese prime minister signed an arms deal in Russia that reportedly included the purchase of six diesel-electric submarines for $2 billion, presumably to be used in the South China Sea.

Meanwhile, China has agreed to continue talks with Vietnam, but it is willing to discuss only joint development of the area, not sovereignty rights. And it refuses to negotiate with all the relevant Southeast Asian nations in any multilateral way.

“There would be too many countries involved,” said Xu Liping, a scholar of Southeast Asia at the Chinese Academy of Social Sciences in Beijing.

Do Tien Sam, a scholar of China at the Vietnam Academy of Social Sciences, said the Vietnamese government believed the exact opposite, that the “negotiations should involve discussions between at least five countries.”

“They all need to sit down,” Mr. Do said.

The conference here in November was not an official site for talks but rather a workshop intended partly to explore multilateral approaches to the issue. Despite China’s resistance to such approaches, several scholars from research groups in Beijing attended.

Some analysts are skeptical of whether Vietnam will get any traction with its new strategy, especially if it decides to press the issue as it presides over Asean. The association has members that have no stake in the fight, like Cambodia and Myanmar.

“Vietnam’s approach faces real obstacles,” said M. Taylor Fravel, a political scientist at the Massachusetts Institute of Technology who has written a book on China’s territorial issues. “It is hard to see how consensus can be built within Asean short of a major armed clash involving Chinese forces.”

Xiyun Yang

Conflict in the South China Sea: China’s Relations with Vietnam

A source of serious interstate tension between some members of the Association of Southeast Asian Nations (ASEAN) and China for much of the 1990s, territorial disputes in the South China Sea became less contentious in the early 2000s: A less assertive stance by China being a critical component in Beijing’s Southeast Asian “smile diplomacy,” a diplomatic offensive designed to assuage the ASEAN countries’ security concerns vis-à-vis a rising China. Recent controversies, however, have underscored the seemingly intractable nature of the dispute and the continued sensitivity over sovereignty issues, particularly between the main protagonists: Vietnam, China, and the Philippines. In the first part of a two-part series, this article examines the impact of the dispute on Vietnam’s relations with the PRC.

Among the 10 members of ASEAN, Vietnam’s relationship with the PRC is without question the most complicated, multifarious, tense, and conflict-prone. From Vietnam’s perspective, it is also the most laden by historical baggage. Two millennia of Chinese overlordship—first as a formal part of the Chinese empire from the first century BC to 938 AD, then as a tributary state until 1885—combined with an intense relationship over the past 60 years characterized by extremes of amity and enmity, have shaped Vietnam’s China psyche to be almost schizophrenic. There is respect, even admiration, for Chinese culture, system of governance and economic reform on the one hand, coexisting with deep resentment, bordering on hatred, of Chinese condescension, bullying, and perceived attempts to control its political destiny. China’s perception of its southern neighbor is equally conflicted: A tenacious fighter of colonialism worthy of massive Chinese support from 1949 until the early 1970s, but a devious, unfilial “puppet” of the USSR during the 1980s.

In 1991, after more than a decade of hostility—the low point of which was a short but intense border conflict in 1979 following Hanoi’s occupation of China’s ally Cambodia—Vietnam and the PRC normalized relations.

Since then, bilateral relations have broadened, deepened and improved to an extent few would have predicted. Today, bilateral relations are guided by the official mantra of “long-term stability, orientation toward the future, good neighborliness and friendship, and all round cooperation” in the spirit of “good neighbors, good friends, good comrades, and good partners.”

Political relations have been buttressed by the regular exchange of high-level delegations, while economic ties have burgeoned. The value of two-way trade has risen from almost nothing in 1991 to $15 billion in 2007, making China Vietnam’s largest overall trade partner (Xinhua News Agency, January 23). For Vietnam though, this has been a mixed blessing: As cheap Chinese-manufactured goods have flooded the Vietnamese market, its trade deficit with the PRC has ballooned, reaching $2.87 billion by 2005; expanded cross-border trade has also led to an increase in counterfeit goods, smuggling, and illegal trafficking in people and narcotics; and the Vietnamese are continually disappointed at the low level of Chinese investment.

Since 1991 bilateral relations have been dominated by three sets of territorial issues: Demarcation of the 850-mile land boundary, delineation of the Gulf of Tonkin, and overlapping sovereignty claims in the South China Sea, particularly the Paracel and Spratly Islands. It is important to stress, however, that early on in the post-normalization phase of the relationship the Vietnamese and Chinese governments determined not to let such problems fetter the development of bilateral ties, and to that end agreed to norms of behavior and put in place a framework of negotiations to manage and eventually resolve their disputes. Despite frequent flare-ups, mutual suspicions and distrust, and political grandstanding, substantial progress was achieved and, most importantly, conflict between their armed forces has been avoided.

In the early 1990s, joint working groups were established to discuss the three disputes, with priority given to the land boundary and Gulf of Tonkin problems. In 1997 the two sides agreed to resolve the land frontier issue by the end of 2000. On December 30, 1999, the Land Border Treaty was finally signed; it came into effect in July 2000 following ratification by both countries’ national assemblies. Details of the treaty’s provisions remained secret, however, and this fueled rumors inside Vietnam that under the dual pressures of the 2000 deadline and bullying from China, Hanoi had conceded too much land to Beijing. These rumors were partly propagated by so-called “cyber-dissidents,” several of whom were imprisoned in 2002 for posting “anti-government” material on the Internet. In late 2002 the Vietnamese government was able to quash these rumors by publishing details of the treaty online; it also revealed that ownership of 87.6 square miles of land had been under dispute, and that the treaty had awarded Vietnam 43.6 sq mi and China 44 sq mi (Associated Press, September 16, 2002). By the time details of the treaty had emerged, work had already begun on planting 1,533 border tablets. Laying the border markers has been a very slow process, mainly due to difficult terrain and the movement of peoples required by exchanges of land. In 2005 the two sides agreed to accelerate the process and complete the task by the end of 2008. Currently 85 percent of border tablets have been planted, and the entire process is expected to be completed by mid-year. An agreement concerning border management and regulations is due to be signed before the end of this year.

Substantial progress in the Gulf of Tonkin has also been achieved. After 17 rounds of negotiations, on December 25, 2000, Vietnam and China signed the Agreement on the Demarcation of Waters, Exclusive Economic Zones and Continental Shelves in the Gulf of Tonkin, which divided the gulf along an equidistant line. At the same time, they concluded an Agreement on Fishing Cooperation in the Gulf of Tonkin which delineated exclusive and common fishing areas. These agreements were not ratified, however, until July 2004 due to protracted negotiations over lucrative fishing rights in the area, and it was not until a Supplementary Protocol to the fishing agreement was signed that ratification could take place [1]. Nevertheless, even after ratification skirmishes between fishing vessels in the Gulf of Tonkin continued to occur, leading each side to accuse the other of infringing the agreements. The most serious incident took place in January 2005 when Chinese patrol boats opened fire on Vietnamese fishing trawlers, killing nine crewmen. In its wake, the two sides agreed to a series of measures designed to prevent further incidents and enhance cooperation in the area. These have included regular joint naval patrols beginning in 2006, the first between China and a foreign country; a joint survey of fishing resources; joint exploration for oil and gas (in November 2005 state-owned PetroVietnam and the China National Offshore Oil Corporation inked an agreement to this effect); and a commitment to start negotiations on demarcating areas outside the Gulf of Tonkin.

Progress toward resolving overlapping sovereignty claims in the South China Sea have been less than encouraging. During the 1990s the two sides remained fundamentally at odds over the issue: Vietnam wanted to discuss sovereignty of the Paracel Islands—occupied by China in 1974—while China considered the matter closed; Vietnam wanted to discuss the Spratlys issue in a multilateral setting with ASEAN, while Beijing favored a bilateral approach. Neither side was willing to compromise its sovereignty claims, leading to a number of tense Sino-Vietnamese stand-offs in the mid-1990s.

The November 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea (DoC), an agreement aimed at freezing the status quo and encouraging cooperative confidence-building measures among the disputants, represented both a victory and a defeat for Vietnam. It was a victory because China had conceded the need to approach the problem multilaterally, but it was a defeat because Hanoi had wanted to clearly define the scope of the agreement to include the Paracels—China objected, Hanoi relented.

When the Philippines and China agreed to conduct joint explorations for oil and gas in contested waters in September 2004, Vietnam initially condemned the move as a violation of the DoC, but eventually agreed to participate in the tripartite Joint Marine Seismic Undertaking (JMSU) in March 2005. Officially Vietnam claimed it had joined the JMSU in the interests of promoting regional stability; in reality, Hanoi was prepared to participate in the project because the survey zone covered by the agreement was not located in waters claimed by Vietnam—or China for that matter. As will be examined in Part Two, in the last few months the JMSU has aroused considerable political controversy in the Philippines, and a question mark hangs over the agreement’s future.

Moreover, the JMSU has done little to mitigate Sino-Vietnamese tensions in the South China Sea as a whole. Indeed, in 2007 relations sharply deteriorated over the dispute. Three sets of incidents combined to rile Vietnam. The first took place in April when China accused Vietnam of violating its sovereignty by allowing a consortium of energy companies led by British Petroleum (BP) to develop two gas fields in the Con Son Basin, 230 mi off Vietnam’s southeast coast. Vietnam rejected China’s protest by claiming the project was well within its EEZ. In June, however, BP announced that it was suspending work in the two gas fields until further notice, fueling speculation that Beijing had put pressure on the company by threatening to exclude it from future energy deals in China. Energy-hungry Vietnam was furious at China’s perceived bullying.

The second set of incidents related to the Paracel Islands. In July 2007, Chinese naval patrol vessels fired on a Vietnamese fishing boat, killing one sailor; in August 2007, China announced plans to begin tourist cruises to the Paracels, leading Vietnam to reaffirm its sovereignty claims over the archipelago; and in November Vietnam protested Chinese military exercises in the Paracels.

The third incident concerned the allegation—not yet confirmed by the PRC government—that the National People’s Congress had passed a law in early December 2007 creating a county-level city in Hainan province called Sansha to administer China’s claims in the South China Sea, including the Paracel and Spratly Islands. For the Vietnamese government the Sansha proposal was the last straw. Over two consecutive weekends in December it allowed hundreds of students to conduct anti-China protests near the Chinese embassy in Hanoi and consular office in Ho Chi Minh City. The demonstrators expressed anger over China’s claims in the Paracels and Spratlys, accusing Beijing of pursuing hegemonic ambitions (Straits Times, December 17, 2007).

Protester in front of the Chinese embassy in Hanoi. “The Paracels and Spratlys of Vietnam”

The Vietnamese government claimed the coordinated protests had been spontaneous, though this is highly unlikely in tightly controlled Vietnam; in fact, Hanoi had taken a leaf out of China’s playbook and used the demonstrations to register its indignation with Beijing. The Chinese government declared itself “highly concerned” at the rallies and chided the Vietnamese authorities to adopt a “responsible attitude” and “avoid bilateral ties from being hurt” (Xinhua News Agency, December 11, 2007). Relations took another hit in January when China accused Vietnamese fishermen of attacking Chinese trawlers in the Gulf of Tonkin. Vietnam responded that Vietnamese and Chinese fishing boats had merely bumped into each other after getting their nets entangled.

In keeping with their long-standing commitment to resolve outstanding disputes through peaceful means and not through force, and not to let territorial issues hinder the forward momentum of ties, Vietnam and China moved quickly to stabilize relations. The China-Vietnam Steering Committee met in Beijing on January 23, 2008 to douse the flames: Co-chairs Chinese State Councilor Tang Jiaxuan and Vietnamese Deputy Prime Minister and Foreign Minister Pham Gia Khiem agreed to “properly handle the problems in bilateral relations” through “dialogue and consultation,” and accelerate negotiations on the delineation of remaining areas of the Gulf of Tonkin and issues relating to the South China Sea (Xinhua News Agency, January 23). Prior to the steering committee meeting, Vietnamese and Chinese officials had met on four separate occasions in January to discuss the land border, Gulf of Tonkin, and South China Sea, agreeing on the need to maintain peace and stability in the area, refrain from complicating the situation, and promote cooperative activities (BBC, January 30).

Since normalization, Vietnam has had to contend with the problems posed by being the weaker party in an increasingly asymmetric relationship: How to accommodate a rising China, steer a middle path between hostility and dependence, and preserve the country’s political autonomy. The South China Sea dispute is emblematic of Vietnam’s problems, and despite improved ties with China, the sovereignty issue is as far as ever from a resolution and continues to overshadow the relationship. While both parties have a vested interest in avoiding confrontation so that they can concentrate on economic development, against a backdrop of ascending oil prices and rising demand for off-shore energy resources, future Sino-Vietnamese contention in the South China Sea seems more likely than not.

Ian Storey

Note

[1] Guifang Xue, China and International Fishery Law and Policy (Netherlands: Martinus Nijhoff, 2005), p. 225.

Vietnam and the US: The Odd Couple

An alliance of convenience becomes a strategic relationship

Particularly in this American election year, human rights issues will test the durability of the rapprochement between Vietnam and the United States – former enemies now seemingly the best of friends.

Officials from Hanoi and Washington get together frequently these days. An eavesdropper on the bilateral contacts might conclude that the unpleasantness of two generations ago, what Vietnamese refer to as “the American war,” was just a speed bump on the road to intimacy.

Indeed, the officials have plenty to talk about. They are tending a lengthening list of shared interests that include booming two-way trade, the elaboration of a military partnership, US support for public health, education and environmental protection initiatives and a pact that could clear the way for transfers of American nuclear technology.

When the toasting begins after a day of negotiations, there are euphoric references to the ‘remarkable development’ of cooperation between Hanoi and Washington.

What’s remarkable isn’t that old enemies are now friends, but that an alliance of convenience has been dressed up and presented as a ‘strategic relationship.’

Two objectives have guided Hanoi’s re-engagement with the US:

  • The regime’s ability to deliver sustained economic growth to Vietnam’s citizenry depends importantly on easy access to the American market and investment capital, and
  • US military cooperation will cause China to think twice about pursuing expansionist ambitions in the South China Sea.

The bilateral economic relationship has been under development since the early1990’s, when the collapse of the USSR knocked the props out from under Vietnam’s increasingly shaky ‘socialist’ economy. Diplomatic relations with the US were established in 1995, and a bilateral trade agreement was negotiated by mid-1999.

That trade pact wasn’t approved by the Politburo until more than a year later, however. First conservatives had to be persuaded to shelve their suspicions of American motives – in particular purported support for Vietnam’s of ‘peaceful political evolution’ on the Eastern European model. That hurdle passed. By 2007, with American mentoring and with reformists dominant in the party and government, Hanoi negotiated its admission to the World Trade Organization.

The WTO, however, has not had the tonic effect that reformers predicted. At the insistence of conservatives within its all-powerful Communist Party, Hanoi has continued to coddle a bloated and underperforming state sector. The resultant distortions have sapped the benefits the Vietnamese expected from economic globalization.

The policy stalemate over reform of its state enterprises may explain the Vietnamese government’s otherwise surprising decision to follow the US into negotiations over a ‘Trans-Pacific Partnership.’ Other partners to the TPP negotiation are Singapore, New Zealand, Brunei, Chile, Malaysia, Australia and Peru and, very soon, also Japan, Korea, Canada, Mexico and Taiwan – but conspicuously not China. Vietnam is much the least developed of the group.

The TPP has been variously described as a springboard to an Asia-Pacific Free Trade Agreement and a ‘21st century paradigm’ that would require adherents to free up agricultural trade and trade in services, remove quotas and enhance intellectual property protection (IPR).

As the TPP agreement is shaping up, Hanoi would surely benefit from better access to developed-country markets for its exports. In turn, however, it would also be compelled to end policy-induced distortions of its internal market in favor of the state enterprise sector and to address labor rights and IPR concerns. That may be precisely reformers’ intention, that is, they may hope to use the market-opening pact to force a policy consensus on structural reform at home.

US-Vietnam security cooperation is a much more recent phenomenon, the linchpin of Vietnam’s defense globalization strategy. Hanoi has also pursued stronger military ties with its Asean neighbors, Australia, Japan, India, France and Russia. Hanoi hopes these 0relationships will buttress its ability to withstand Chinese encroachments on disputed sea areas. Not that it wants to fight, of course. Hanoi’s leaders respect China’s strength and – on a party to party basis – value China’s friendship as long as it stops short of bullying.

Vietnam’s determination not to yield on maritime sovereignty issues dovetails nicely with US determination to prevent any curbs on freedom of navigation through the Malacca Straits/South China sea shipping lanes. The Pentagon has eagerly multiplied military-to-military training exercises with Vietnam, addressing search and rescue, maritime security and disaster relief. There have been well-publicized ship visits and quiet exchanges of military intelligence. To Hanoi’s chagrin, however, Washington has waved off its requests to buy lethal military hardware.

The Vietnamese regime’s posture on human rights will remain a weighty burden on the US-Vietnam relationship. There’s a new generation of politically savvy Vietnamese-Americans who not only care about such things but can swing quite a few votes. Particularly in this American election year, Hanoi’s repression of domestic dissidents can lob a spanner into the bilateral security and trade dialogues.

That shouldn’t be a surprise to Hanoi. US officials from Secretary of State Hillary Clinton on down have emphasized that Vietnamese curbs on “universal human rights standards” are an impediment to closer ties. Sens. John McCain and Joseph Lieberman were explicit when they visited Hanoi in February: Vietnam “has a long laundry list of defense items it desires, [but] . . . it’s not going to happen unless they improve their human rights record.”

The connection between human rights performance and Vietnam’s access to the US market isn’t so direct. Whereas weapons sales to Vietnam would require Congress’s specific approval, it’s unlikely that the Congress would refuse to cooperate if a TPP is concluded. Still, Vietnam’s exports remain vulnerable to any number of riders and resolutions that the Congress can attach to prospective legislation, which includes a bilateral investment treaty and an agreement governing transfer of nuclear power technology.

There are plenty of ways human rights issues can condition the American stance. On March 20, for example, Vietnam was thumped by a commission established by the US Congress to monitor how other nations deal with issues of religious freedom. The commission recommended that Vietnam be designated a “Country of Particular Concern,” lumping it with the likes of North Korea, China, Iran and Sudan. Citing specifics, it accused Vietnam of “systematic and egregious violations of freedom of religion and belief” in 2011.

Vietnam’s been off America’s religious freedom blacklist since 2006. Reinstating it there doesn’t require the US administration to sanction Vietnam — but it is yet another handy justification for Congressional opposition to things Hanoi wants from the US.

Will the commission’s condemnation induce Vietnam to change its behavior? Surely not in any obvious way – Hanoi typically digs in when it’s pressured. Chances are very slim to zero that the Communist regime is going to show more tolerance for people who advocate multiparty democracy or who insist on the right to establish religious, professional or labor organizations unsanctioned by the state. These are bedrock “social stability” issues for the regime. Whether reformist or conservative, Hanoi’s leaders consider maintaining the Party’s absolute monopoly of power to be more important to the regime’s survival than any strategic relationship or trade pact.

China could be a problem, too. The other threat to the ripening friendship between Washington and Hanoi is more Chinese interference with oil and gas exploration off Vietnam’s long coast. Twice last spring, Chinese coast guard vessels harassed survey vessels working for PetroVietnam and for a Philippine oil company. The incidents triggered a surge of patriotic protest in Vietnam and gave new urgency to Hanoi’s pursuit of strategic relationships with other regional actors.

Sinologists argue that the provocations last spring may have been unsanctioned initiatives by elements intent on defending China’s dubious claim to sovereignty over the South China Sea almost as far as Singapore. True or not, there is at the least a substantial faction in Beijing that doesn’t want other nations tapping (still undiscovered) oil and gas that they regard as China’s own.

Big oil companies have been put on notice that if they want a piece of the action in China, they’d better get out of Vietnam. Britain’s BP divested its Vietnam properties in 2010, and early this year the second-biggest American oil company, Conoco-Phillips, sold its US$1 billion stake in Vietnam to a French firm. Exxon-Mobil, however, says it’s intent on developing a recent strike offshore central Vietnam.

Exploration activity picks up in the spring. More incidents like last year’s could put pressure on Washington to intervene. Inevitably they would play into US domestic politics.

It’s the job of diplomats not just to understand what their foreign counterparts are saying but also why, to maintain a clear-headed sense of the possible and, above all, not to oversell what’s on offer when they report to their political masters. Provided their diplomats have done that, both Hanoi and Washington ought to see merit in banking the fires under their courtship for a while — at least till the end of the year. Neither side is in a position to move much further forward. The immediate challenge will be to sustain what has been achieved, withstand stresses, and not succumb to disillusionment and/or recrimination.

David Brown

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Posted in: Politics