China-Vietnam's Year of Friendship turns fractious

The Straits Times (Singapore)
May 26, 2009 Tuesday

China-Vietnam's Year of Friendship turns fractious

Ian Storey, For The Straits Times



To commemorate the 60th anniversary of the establishment of diplomatic ties between Vietnam and China, the two countries have designated 2010 the 'Year of Friendship'. But if recent developments are anything to go by, amity is likely to be in short supply.

Vietnam and China normalised ties in 1991 after nearly two decades of hostility, and bilateral ties have improved since then. Two-way trade has blossomed and China is now Vietnam's largest trade partner. In 1999 and 2000, the two countries signed treaties delineating their land border as well as sea boundaries in the Gulf of Tonkin. But despite the progress, mutual suspicions persist. Vietnam in particular worries about the implications of its giant neighbour's rising power.

This year, two sets of incidents have brought the difficult relationship into sharp relief.

The first concerned China's economic role in Vietnam and the flood of Chinese-manufactured goods into the country. In March, the Vietnamese press reported that the country's trade deficit with China had reached the 'alarming' level of US $11 billion (S $16 billion), 57 times higher than in 2001. To offset the growing deficit, Hanoi has been encouraging Chinese firms to invest in Vietnam, but this has not always proved popular.

When Hanoi awarded a major contract to a Chinese firm to mine for aluminium oxide in the Central Highlands, for instance, it set off a torrent of criticism that the project would ruin the local environment, displace ethnic minorities and inundate the area with Chinese workers. Critics included General Vo Nguyen Giap, the 97-year old architect of Vietnam's military victories over France and the United States. He wrote a series of open letters to the government highlighting the strategic importance of the Central Highlands and warning against Chinese influence in the country.

The second set of incidents involves Vietnam and China's maritime boundary disputes in the South China Sea. Hanoi still contests Beijing's 1974 occupation of the Paracel Islands off Hainan Island, while both governments continue to claim sovereignty over the Spratly Islands (also claimed in whole or in part by Brunei, Malaysia, the Philippines and Taiwan). In addition, China claims sovereign rights in the oil- and gas-rich waters off Vietnam's south-east coast.

Vietnam has become increasingly alarmed at China's assertive behaviour in the South China Sea. Beijing has put pressure on foreign companies not to participate in offshore projects with Hanoi in waters claimed by China. Beijing has also increased naval patrols in the Paracels and Spratlys. In late 2007, the passage of legislation in China claiming both groups of islands provoked anti-Chinese protests by Vietnamese students.

On May 7, Vietnam lodged a submission with the United Nations Commission on the Limits of the Continental Shelf in order to stake its claims to the potentially rich maritime resources on the sea bed off the Vietnamese coast. China immediately branded the submission as a violation of its sovereignty and called on the UN commission to reject it. In a note verbale, China asserted its 'indisputable sovereignty, sovereign rights and jurisdiction over the South China Sea islands and their adjacent waters'. Attached to the note was a map showing Beijing's longstanding claims to virtually the entire South China Sea. Hanoi shot back, criticising the map as being without 'legal, historical and factual' basis.

Due to the power asymmetries in Sino-Vietnamese relations, Hanoi relies principally on diplomacy to manage its disputes with Beijing. The two sides have established working groups to discuss their overlapping claims, but this has yielded little progress. Vietnam has also supported Asean's efforts to mitigate the dispute, including the 2002 Asean-China Declaration on the Conduct of Parties in the South China Sea which aims to freeze the status quo and encourage the disputants to engage in cooperative projects.

One such project was the 2005 Joint Marine Seismic Undertaking in which the state-owned energy companies of China, the Philippines and Vietnam agreed to explore for oil in contested waters. However, that agreement became embroiled in controversy in the Philippines and was quietly allowed to lapse in June last year.

Frustrated by the lack of progress in the diplomatic arena, and greatly concerned about Beijing's more assertive behaviour in the South China Sea, Hanoi has accelerated its military modernisation programme. In order to better defend its territorial claims and economic interests in the South China Sea, it has been prioritising the acquisition of more potent air and naval assets.

Since the mid-1990s, Vietnam has taken delivery of 12 Russian-built Sukhoi multirole jet fighters, and earlier this year sought to double its air power by ordering 12 more worth US $500 million. Over the past few years, Russia has also helped Vietnam beef up its navy by providing it with six corvettes and two guided-missile frigates. Last month, Russian media reported that state-owned arms exporter Rosoboronexport had agreed in principle to supply Vietnam with six ultra-quiet Kilo-class submarines worth US $1.8 billion. As Vietnam currently operates only two mini-submarines, these Russian submarines will give Hanoi a quantum leap in anti-submarine and anti-ship warfare capabilities, and will act as a deterrent to China's increasingly powerful naval forces. It will also furnish Vietnam with the most advanced undersea warfare capabilities in the whole of South-east Asia.

The 'Year of Friendship' may improve the atmospherics of Sino-Vietnamese relations but not its substance. Vietnam will continue to hedge against China's growing military muscle.

The writer is a fellow at the Institute of Southeast Asian Studies.