Vietnam Says It Has Complex Challenge With China on Sea Spat

Vietnamese protest outside the Chinese Embassy in Hanoi, Vietnam, against Beijing's deployment of an oil rig in the contested waters of the South China Sea. The deployment of the rig has a triggered a tense standoff in the ocean and raised fears of confrontation between the neighboring countries. (AP Photo/Chris Brummitt) Close

Vietnamese protest outside the Chinese Embassy in Hanoi, Vietnam, against Beijing's... Read More

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Vietnamese protest outside the Chinese Embassy in Hanoi, Vietnam, against Beijing's deployment of an oil rig in the contested waters of the South China Sea. The deployment of the rig has a triggered a tense standoff in the ocean and raised fears of confrontation between the neighboring countries. (AP Photo/Chris Brummitt)

Vietnam is confronting a “complex challenge” in its dispute with China that has flared up over a Chinese oil rig operating in contested waters, Deputy Minister of Planning and Investment Nguyen Chi Dung said.

“Our constant policy to safeguard our territorial integrity via peaceful measures led us to demand China observe international laws,” Dung said today at a conference in Ho Chi Minh City.

The two countries have held their first high-level meeting to try and resolve the issue since a Chinese state-owned company placed the rig in waters claimed by each country May 2, heightening territorial tensions across the South China Sea. China, which claims a large part of the area under a 1940s-era map, is increasing its assertions to both the Paracel Islands off Vietnam’s coast and the more southerly Spratly Islands.

China’s top foreign policy official yesterday said China and Vietnam face a “difficult period.” State Councilor Yang Jiechi held discussions with Vietnam Foreign Minister Pham Binh Minh as ships from the two countries face off daily in the South China Sea. On May 26 a Vietnamese fishing boat sank, with both sides blaming the other.

Yang came to Hanoi to “discuss candidly and thoroughly” with Minh the South China Sea disagreement, he said in a brief meeting in front of news photographers. “China and Vietnam relations are experiencing a difficult period,” he said.

Photographer: Tran Van Minh/AP Photo

Chinese State Councilor Yang Jiechi, left, and Vietnamese Prime Minister Nguyen Tan Dung pose for photos before their meeting in Hanoi. Close

Chinese State Councilor Yang Jiechi, left, and Vietnamese Prime Minister Nguyen Tan... Read More

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Photographer: Tran Van Minh/AP Photo

Chinese State Councilor Yang Jiechi, left, and Vietnamese Prime Minister Nguyen Tan Dung pose for photos before their meeting in Hanoi.

Minh responded by saying Vietnam seeks a “healthy” relationship with China. “We wish to have dialogue to resolve the current complicated situation in the East Sea,” he said, using the Vietnamese name for the South China Sea.

Maintaining Tranquility

Chinese Premier Li Keqiang yesterday said that “expansion is not in the Chinese DNA” and that talks can ensure stability in the region. China will take resolute measures to stop those who provoke or undermine its interests, he said.

“We believe that as long as countries in the region can engage in dialog and negotiation in good faith then tranquility can be maintained,” Li said in a speech at Mansion House in London during his visit to the U.K.,

Yang’s visit to Hanoi is held under the auspices of the annual China-Vietnam Steering Committee on Bilateral Relations, allowing the governments to speak directly to each other without the appearance of either side, and particularly China, blinking, said Le Hong Hiep, a lecturer at Vietnam National University.

“China doesn’t lose face by sending a delegation to Hanoi,” he said by phone. “Both sides can’t afford to keep the tensions going on too long.”

136 Ships

China has 136 vessels, including five military ships, near the oil rig off Vietnam’s coast in the South China Sea, an area Vietnam says is its territorial waters, online news website VnExpress reported June 17, citing the Fishery Control Department. China has denied sending military ships to the area.

Chinese ships are moving in reverse into the path of Vietnamese vessels in an attempt to make it appear as though the Chinese boats are being rammed, Vietnam News reported June 11. A Chinese boat struck a Vietnamese fishery surveillance boat on June 7, VnExpress said.

China’s relationship with Vietnam is being strained “by the continuous, illegal disturbance of the Vietnamese side against China drilling operations of the coastal waters off the Xisha Islands,” Foreign Ministry spokeswoman Hua Chunying said at a briefing yesterday in Beijing, using the Chinese name for the Paracel Islands.

Yang, in talks with Vietnamese officials, stressed that the islands are indisputably “China’s inherent territory” and its drilling operations in the area are legal, Hua said.

“We hope the Vietnam side can bear in mind the big picture, work together with China to lift relations out of difficulty, and move along the correct course,” Hua said.

‘Vulnerable’ China

The U.S. economic and strategic rebalancing to the Asia-Pacific has prompted China to become more assertive, according to Marc Faber, publisher of the Gloom, Boom & Doom report, speaking today at the Ho Chi Minh forum.

“You have to put yourself in the chair of a Chinese leader,” Faber said. “You depend on oil imports from the Middle East. They’re vulnerable in the Straits of Malacca. They’re vulnerable up to the northern ports of China because they’re all surrounded by naval and military bases of America that have a security agreement with Japan. So of course you want to make sure that the access to the oil will always be there.”

‘Significant Concession’

A resolution of the crisis might only come after Vietnam accepts China’s conditions, something Vietnam seems unwilling to do, said Alexander Vuving, a security analyst at the Asia-Pacific Center for Security Studies in Hawaii. China’s $8.2-trillion economy is more than 50 times the size of Vietnam’s.

“China will only agree to de-escalation if Vietnam makes a significant concession,” he said in an e-mail. “I expect that the talks will not resolve the oil rig crisis, though they will demonstrate that both China and Vietnam do not want this incident to affect the general contours of their broader relationship.”

Vietnam could use the threat of closer ties with the U.S. to pressure China, Hiep of Vietnam National University said.

Ted Osius, the nominee to become next U.S. Ambassador to Vietnam, said during a Senate confirmation hearing on June 17 that it may be time for the U.S. to consider lifting its ban on the sale or transfer of lethal weapons to the Southeast Asian country, the Associated Press reported.

To contact the reporters on this story: John Boudreau in Hanoi at jboudreau3@bloomberg.net; Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Neil Western

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