Can Beijing and Hanoi overcome their latest South China Sea flashpoint at Vanguard Bank?

Vietnam and China are embroiled in a tense stand-off over oil and gas fields in the disputed waterway, ramming each other’s vessels and firing water cannons
Though the two claimant states are still talking, Hanoi shows no sign of backing down, and some say Vietnam is ready to take tougher action without fear of the consequences

Lye Liang FookandHa Hoang Hop

Published: 9:00am, 6 Sep 2019

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Vietnam and China are embroiled in their worst stand-off in the South China Sea since a 2014 clash in the waters off the Paracel Islands. Beijing in July dispatched a survey ship, the Haiyang Dizhi 8, to look for oil and gas off Vanguard Bank in waters claimed by both countries. The area is close to oil and gas block 06-01, where a Russia-Vietnam joint venture is drilling.

The Haiyang Dizhi 8 arrived with coastguard vessels and a maritime militia, prompting Vietnam to step up its presence to try and outnumber the Chinese ships. Vessels have reportedly been rammed and water cannons fired by both sides.

LOCKING HORNS AT SEA

The Haiyang Dizhi 8 has been surveying 35,000 sq km of the seabed northeast of Vanguard Bank, which lies within Vietnam’s exclusive economic zone and continental shelf – inside which the country claims sole rights to fishing and drilling.

Giant China crane ship turns up near Vietnamese coast

Chinese survey ship the Haiyang Dizhi 8. Photo: China Geological Survey

China seems to be signalling its disapproval that Hanoi has been drilling in the area for its Nam Con Son project with Rosneft, Russia’s largest oil and gas company. There have been reports of up to 80 coastguard and militia vessels protecting the Haiyang Dizhi 8. On Tuesday night a giant Chinese crane vessel, the Lan Jing, reportedly arrived 90km (56 miles) offshore of Vietnam’s southern Quang Ngai province. According to the Asia Maritime Transparency Initiative, Chinese coastguard vessel Haijing 3511, equipped with a 76mm multi-purpose naval gun, has been patrolling an area 190 nautical miles off Vietnam’s southeast coast.

In response, in mid-August, Vietnam indicated its determination by dispatching its advanced naval frigate Quang Trung to intercept Haiyang Dizhi 8. The country’s foreign ministry stated its resolve to defend its interests, but also indicated it remained open to a peaceful resolution. The ministry said Vietnam had reached out to China on multiple occasions via different channels with appeals to stop “unlawful activities” and “withdraw” from Vietnam’s waters.

Vietnam extends operation of oil rig on Vanguard Bank as stand-off with Beijing continues

Hanoi has appealed to other countries for support, and the US Department of State has expressed concern over China’s “interference with oil and gas activities” and “repeated provocative actions”. Australia and the European Union have expressed similar concerns, and last month the United States sent the USS Ronald Reagan sailing through the South China Sea before it docked at Manila Bay in the Philippines.

Nevertheless Vietnam has maintained high-level contact with Beijing despite the tensions. Vietnam’s National Assembly Chairwoman Nguyen Thi Kim Ngan proceeded with a maiden visit to China on July 8, just days after the Haiyang Dizhi 8 entered Vietnam’s exclusive economic zone.

Ngan’s visit can be read as an attempt to keep a lid on the situation and prevent it affecting broader relations. She reportedly told Chinese President Xi Jinping that Vietnam was ready to work with China to settle the issue.

A HISTORY OF STAND-OFFS

The dispute is not the first time the two nations have faced off in the South China Sea. In 2014 China deployed the deep-sea oil rig Haiyang Shiyou 981 in disputed waters in the Paracel Islands. The semi-submersible oil platform was protected by coastguard ship the Haijing 35111, which had earlier carried out manoeuvres seen as provocative off the coast of Sarawak in Malaysia to disrupt oil and gas drilling activities near Luconia Shoals. The two-pronged mission signalled China was committed to taking broader action to prevent what it regards as new unilateral oil and gas activities by states in the Association of Southeast Asian Nations (Asean) within the nine-dash line that marks Beijing’s sovereignty claims.

Vietnam calls for Chinese vessels to leave Vanguard Bank in South China Sea

In 2014 the dispute quickly escalated and led to a downward spiral in relations. At its height, China was reported to have deployed 137 Chinese vessels around the oil rig, including military ships such as missile frigates, fast-attack missile craft, anti-submarine patrol ships and amphibious landing ships. Helicopters, early warning planes, reconnaissance planes and fighter jets were also mobilised. Anti-China protests broke out in a few cities across Vietnam, and Chinese factories were looted and burned.

A Vietnamese worker at a processing plant in Ba Ria that brings in gas from the Nam Con Son offshore field. Photo: AFP

This time around, however, there seems to be a conscious effort on the part of both countries

to prevent the situation getting out of hand. In Vietnam police apparently took swift action on August 6 to break up a small group of protesters gathered outside the Chinese embassy in Hanoi who called themselves the “No-U” group in opposition to Beijing’s U-shaped nine-dash line. High-level government and party exchanges have taken place where both sides have highlighted the broader aspects of their relationship.

Another key difference from 2014 is that Vietnam has so far refrained from talking about bringing China to court over the dispute. Vietnamese leaders suggested the legal approach on a few occasions five years ago. There have been suggestions that the next logical step for Vietnam is to submit its dispute with China to an arbitral tribunal according to Annex VII of the United Nations Convention on the Law of the Sea. This would be similar to the case brought by the Philippines in 2013.

China maintains pressure on Vietnam at Vanguard Bank

WHAT NEXT?

The stand-off near Vanguard Bank appears to indicate a new modus operandi in China’s approach to new oil and gas mining activities in disputed areas. It will send its own vessels to survey for oil and gas while at the same time trying to disrupt similar activities by other claimant states. But it is still too early to judge whether China’s greater assertiveness will bear fruit.

Vietnam has not shown any sign of backing down and has indicated its intention to carry on with oil and gas mining in its exclusive economic zone and continental shelf. In late July Hanoi announced that the operations of the Hakuryu-5 oil rig, contracted from Japan for the Nam Con Son project, would be extended until September 15 instead of ending on July 30. Vietnamese maritime vessels, including an advanced naval frigate, continue to ply the area near Vanguard Bank to try and disrupt Haiyang Dizhi 8’s activities. Hanoi is also expected to press on with efforts to “internationalise” the issue, and may raise it with the UN as it did during the 2014 stand-off.

The Hakuryu-5 oil rig, contracted from Japan for Vietnam’s Nam Con Son project. Photo: Japan Drilling Company

Be that as it may, both sides so far appear to have exercised restraint. One reason could be that China is preoccupied with more pressing challenges such as the US-China trade war and the anti-government protest movement in Hong Kong. Another reason could be that Vietnam will chair Asean next year and neither Beijing nor Hanoi wants to see a deterioration of their relations to an extent that complicates Vietnam’s role. Next year also marks the 70th anniversary of the establishment of Vietnam-China relations, and both sides have good reason to keep their differences in check.

However, this does not mean the situation near Vanguard Bank cannot spiral out of hand. Given the presence of so many vessels, the possibility remains of unplanned or unintended encounters causing relations to deteriorate and lead to a conflict. There is even a view in some quarters in Vietnam that if pushed into a corner, Hanoi will take tougher action.

Lye Liang Fook is a senior fellow and coordinator of the Vietnam Studies Programme at the ISEAS-Yusof Ishak Institute in Singapore. Ha Hoang Hop is a visiting senior fellow at the same institute. This is an edited version of an article titled “The Vanguard Bank incident: developments and what next?” published in ISEAS Perspective No 69

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