By NDT Vietnam Bureau
South China Sea region has become a theatre of regional conflict in South East Asia. The South China Sea has alternated between periods of relative quiet and heightened tension since the late 1980s. In June 2017, as the anniversary of a 2016 international arbitration tribunal ruling against China approached, rivalry over hydrocarbon resources appeared to have been renewed.
On 18 June, Chinese deputy minister of defence Fan Changlong cut short a visit to Hanoi. Although no official reason was given, sources in Hanoi indicated that Fan had left after Vietnamese rejection of a Chinese demand to abandon preparations to drill for oil and gas in areas within China’s vaguely defined ‘U-shaped line’.
In the current circumstances, the leadership in Beijing has a number of reasons to seek to avoid conflict with Southeast Asian countries, not least the desire to promote its ‘Belt and Road’ infrastructure initiative. However, the main claimants to the rocks and reefs of the sea continue to build up their maritime forces and to consolidate their positions on the disputed features in the expectation of further trouble. Whereas the Southeast Asian claimants (Brunei, Malaysia, the Philippines, and Vietnam) have, in effect, conceded that they will not attempt to evict others from the features that they occupy, China’s actions and rhetoric suggest that it intends to bring under its control every feature within its ‘U-shaped line’ claim in the sea.
Some Chinese state agencies also appear to have asserted ‘historic rights’ to all the fish and hydrocarbon resources within the line and to control navigation. These claims have however been ruled incompatible with the UN Convention on the Law of the Sea by the 2016 arbitration tribunal ruling. Despite this, Chinese state agencies have continued to violate the ruling through various means.
Tensions began to escalate in the South China Sea when the People’s Republic of China (PRC) embarked upon the creation of its first base in the Spratlys, at Fiery Cross Reef, in late 1987. In 1988, it occupied five more features: Cuarteron Reef, Gaven Reef, Hughes Reef, Johnson South Reef, and Subi Reef. On one, Johnson South Reef, a confrontation the same year between China and Vietnam resulted in the deaths of 64 Vietnamese marines. China then occupied Mischief Reef, 240 km from the Philippine island of Palawan, in late 1994. In April 2012, it also placed a blockade around the Scarborough Shoal, 230 km from Luzon, but as of June 2017 it had not built any structures upon it.
The most significant development in the South China Sea since then has been China’s expansion of the seven reefs it controls in the Spratly Islands. Satellite imagery and automatic identification system (AIS) data suggest that China began constructing artificial islands on those reefs in September 2013, but analysis of Chinese documents by Wayne R Hugar of the US National Intelligence University published in the Journal of Strategic Intelligence in 2016 suggests that the decision to do so was taken in 2011.
However, China is not the only country that has engaged in the expansion of features under its control. In June 2017, Gregory Poling of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies (CSIS) in Washington DC, said that, “Vietnam started small-scale land reclamation around 2011 and has now added about 150 acres of new land at 10 of the features it occupies.” He described Vietnam’s reclamation as “a drop in the bucket compared to what the Chinese have done, but it has allowed Vietnam to add some important capabilities”.
In May 2014, China sent an oil rig protected by a large flotilla of coastguard, naval, and fishing vessels into an area of sea claimed by Vietnam, just southwest of the Paracel Islands. Vietnam sent boats to try to block the Chinese flotilla and gave international publicity to the resulting confrontations. Vietnam sought, and received, formal support from its fellow members of the Association of Southeast Asian Nations (ASEAN).
Over the following three months Vietnam significantly upgraded its defence relations with the United States: it joined the US-sponsored Proliferation Security Initiative, sent a member of the Communist Party Politburo to visit Washington, and hosted the first ever visit by a chair of the US Joint Chiefs of Staff to Hanoi.
China withdrew the oil rig and moved rapidly to repair relations. In October 2014, Vietnam dispatched the highest level military delegation ever to visit Beijing. The two countries’ prime ministers met that same month and relations began to recover. This has continued and the two sides have since exchanged several high-level visits.
In January 2017, the head of Vietnam’s Communist Party, Nguyen PhuTrong, met Chinese president Xi Jinping in Beijing and, in the words of their joint statement, “vowed to expand maritime and security co-operation”. In May 2017, the two countries’ presidents reached an ‘Agreement on basic principles guiding the settlement of issues at sea between Vietnam and China’. Nonetheless, it is assessed that a significant degree of mistrust persists between the two sides on the issue of the South China Sea.
In July 2016, an international arbitration tribunal based in The Hague issued its ‘Award’ in a case brought by the Philippines against China over the latter’s activities in the South China Sea. The result was a success for Manila, but its impact was diminished by the election of Rodrigo Duterte as president two weeks beforehand. In contrast to his predecessor, Duterte has played down the importance of the Award in his dealings with China, preferring to focus on investment and aid. This has disappointed Vietnam because the legal action had allowed a ‘Southeast Asian’ pushback against China‘s claims at minimal political cost to Hanoi.
The Award is binding – but only on China and the Philippines. However, its rulings on two points in particular have major implications for all states. First, the tribunal ruled that none of the features in the Spratly Islands, nor the reef known as Scarborough Shoal, are true ‘islands’ as they have never supported permanent human habitation. This means that none of the features are entitled to a 200 nautical mile exclusive economic zone (EEZ). Second, it ruled that the vague ‘U-shaped line’ printed on Chinese maps of the South China Sea since 1948 does not amount to a valid basis for a claim to maritime rights.
Ho Chi Minh City (HQ 183), the second of six Russian-built Improved Project 636 Kilo-class diesel-electric submarines, was commissioned into service with the Vietnamese People’s Navy in early April 2014. (PA)
If Vietnam wanted to make use of the same legal arguments it would have to bring a new case, which would be heard by new judges who would not be bound by the earlier ruling. However, if the new judges followed the same logic as the earlier tribunal, then the Paracels would be adjudged not to be full islands either. Accordingly, neither they, nor the ‘U-shaped line’, would be able to limit Vietnam’s claim to an EEZ of up to 200 nm from its mainland coast. Indeed, in a 2016 conference on the South China Sea that was sponsored by the Vietnamese Ministry of Foreign Affairs, officials used maps that reflected this position.
The legal benefits to Vietnam of winning such a case could be substantial: it would give its fishing and energy industries clear legal rights over a much larger area of sea. However, discussions with academic sources in Hanoi in May 2017 suggest that Vietnam is unlikely to bring such a case as political relations between the Communist Party leaderships in the two countries are good. The Beijing leadership would be incensed if Hanoi initiated legal action. Its retaliation would probably include more aggressive moves at sea and economic pressure elsewhere.
The only likely reason for Vietnam to bring such a case would be if China were to move against Vietnam’s maritime interests, for example by drilling for oil or gas within Vietnam’s claimed EEZ or attempting to take over a Vietnamese-held reef in the Spratly Islands.
Tellingly, in July 2014, during the oil rig confrontation, the Vietnamese Communist Party Politburo voted overwhelmingly to hold a meeting of the party’s Central Committee to endorse international legal action against China, according to an August 2014 report on the website The Diplomat. This never happened, but academic and diplomatic sources in Hanoi in May 2017 suggested that the basic legal preparations to move to arbitration had already been made, should conditions again change.
There are three broad motivations for China’s actions in the South China Sea: defence, resources, and bureaucratic self-interest. However, underpinning them all is a sense of national entitlement. Over the century since Chinese officials first staked a claim to islands in the sea, a narrative has been propagated to convince the country’s population that the reefs and rocks have been Chinese ‘since ancient times’. This narrative is evident in speeches by top leaders, in which state agencies are exhorted to defend the country’s ‘national territory’.
China has a strong national security motivation for controlling the South China Sea. National prosperity depends upon an arc of cities around its coast, and the movements of imports and exports that sustain them. In the view of Wu Shicun, president of China’s National Institute for South China Sea Studies, the primary reason for China’s stance on the South China Sea is to ensure strategic access to the world’s oceans.
The People’s Liberation Army Navy (PLAN) is tasked with keeping hostile forces away from the mainland coast and away from any potential conflict involving Taiwan. Analysts such as Tong Zhao of the Carnegie-Tsinghua Center for Global Policy in Beijing, writing in June 2016, have pointed to evidence from Chinese naval sources to argue that the PLAN intends to use the South ChinaSea as a ‘bastion’ in which to hide its ballistic missile submarines, based at Yulin naval base on Hainan.
Developments on China’s new artificial islands in the Spratlys support this view. Satellite imagery has revealed the presence of hangars for a range of aircraft alongside the 3,000-m runways on Fiery Cross, Mischief, and Subi reefs, in addition to large naval harbours. The remaining four features now house radar and communications arrays, among other infrastructure. These developments indicate that China is well on the way to installing the kind of infrastructure necessary to protect such a bastion.
Constructing a similar base on Scarborough Shoal would create a triangular ‘bastion’ in which air, surface, and subsurface assets could be deployed in order to protect China’s ballistic missile submarines. Given that these boats would, in effect, be the last line of defence for the Communist Party leadership in a time of crisis, the significance of this factor in China’s South China Sea policy should not be underestimated.
The second motivation for China’s actions is that Chinese officials regard the South China Sea as a partial solution to the country’s energy and food needs. There are three areas of disputed sea that contain substantial hydrocarbon reserves: Reed Bank, off the Philippines; James Shoal/Luconia Shoal off Malaysian Borneo; and Vanguard Bank off the Vietnamese coast. China’s new islands are well placed to provide support for any effort to drill in these areas.
In May 2017, Chinese minister of land and resources Jiang Daming announced that scientists had successfully recovered natural gas hydrate from the bed of the South China Sea, the Xinhua news agency reported. The process is still far from economical but it provides another incentive for China to assert control over mineral rights in the sea.
Significantly, the ‘White Paper’ published by the Chinese government immediately after the release of the arbitration tribunal ruling made almost no mention of oil and gas. By comparison, China’s fishing interests were mentioned repeatedly.
Since 2010, the central government has supported the expansion of the industry to meet rising consumer demand for fish, which has doubled over the past 20 years, according to Zhang Hongzhou of the S. Rajaratnam School of International Studies (RSIS) in Singapore. Zhang told in June 2017 that “Chinese officials talk of the country’s ‘vast marine territories’ as a source of the nation’s fish”. This view is likely to lead to further confrontations with neighbouring countries’ fishing fleets, particularly as the legacy of years of overfishing reduces the overall catch.
The third motivation behind China’s actions is that a number of state agencies and coastal provinces are able to use the pretext of defending the national territory in ways that benefit their own narrow interests. Fishing fleets that have over-fished their inshore waters have received large subsidies to increase the size of their boats in order to fish further afield in disputed waters. The PLAN and the China Coast Guard are recipients of significant extra funding and prestige as a result of their actions in the South China Sea.
Over the past decade, Vietnam has rapidly upgraded its ability to project force into the South China Sea. In 2009, it ordered six Kilo-class diesel-electric submarines (SSKs) from Russia: the final one was delivered in February 2017. These boats are now docked in Cam Ranh Bay (see imagery below) and their crews are being trained.
Vietnam is still some way from being able to deploy the submarines effectively. One Western military observer in Hanoi told in April 2017 that the submarines have done little more than sail slowly around the harbour. Collin KohSwee Lean of the Maritime Security Programme at RSIS told in June that it could take until at least 2020, and perhaps even 2030, before Vietnamwould be able to fully operate its submarine fleet.
Vietnam has a certain amount of ‘home advantage’ when operating submarines off its long eastern coast. However, Koh told that China was developing a network of undersea surveillance sensors – along with its new features – that may negate this advantage. Koh told that in wartime, “the survivability of these boats would be in question”. Vietnam will therefore need to develop the means to counter Chinese anti-submarine capabilities.
Koh noted that the reported deployment of Israeli-supplied Extended Range Artillery (EXTRA) in August 2016 to Vietnamese-held features in the Spratlys, “could serve not only [as] defences against PLA amphibious assault, but also directly threaten those forward airstrips Beijing built to support air operations”.
Vietnam’s military has conducted an exercise simulating the deployment of its Russian-made K-300P mobile Bastion-P coastal defence system from its base (see imagery below) to an island off its coast. (QPVN)
In the event of any conflict between China and Vietnam the airspace over the Spratly Islands would be contested. Both Vietnam and China operate fighter aircraft capable of reaching the Paracels and the Spratly Islands without in-flight refuelling, in Vietnam’s case from air bases on its mainland and in both countries’ case from airstrips on features they control in the Spratlys. For example, Vietnam operates the Su-27 Flanker and China has a domestic variant in service, the J-11B. Similarly, in the event of a conflict, China would likely seek to deploy HQ-9 surface-to-air missile systems to the shelters it has prepared on features in the Spratly Islands, for example on Fiery Cross Reef.
Vietnam has acquired two batteries of Russian K300P Bastion-P shore-based anti-ship missiles. According to a report in Vietnamese media in November 2015, one of these is based in the south-central province of BìnhThuan, the closest coast to the Spratly Islands. Analysis of satellite imagery (see imagery below) has corroborated this report. From this position, the system could cover an area off Vietnam’s coast. However, as a mobile system, the Bastion-P could potentially be deployed to a Vietnamese-occupied feature in the Spratly Islands.
Vietnam has also expanded the land area on some of the reefs it controls (see imagery below). Poling told that the most significant developments were, “new harbours at Spratly Island, Southwest Cay, Sin Cowe Island, and West Reef, a substantially lengthened runway and additional hangar space at Spratly Island, and new radar and communications infrastructure on a number of the islands”. According to Poling, “Hanoi knows it can’t go toe-to-toe with the Chinese, or keep up with Beijing’s expansion plans, but Vietnam is working hard to make sure that it can resupply and defend its facilities while keeping an eye on the Chinese.”
The Vietnamese military as a whole is in the middle of a modernisation programme, officially called ‘Adjustments to the Vietnam People’s Army’s organization until 2020’. The intention is to facilitate joint working, integrate technology into operations, and upgrade the navy and air force. As Phuong Nguyen, fellow at the Pacific Forum of CSIS, wrote in the Nikkei Asian Review in November 2016, “Vietnamese military officers have been emphasizing with greater frequency the need to maintain ‘combat readiness’ across all units.”
However, Le Hong Hiep, an analyst at the Institute of Southeast Asian Studies in Singapore, told in June that the country’s military spending is causing problems with government finances. This has been exacerbated by the combination of a reduced oil price and actual falls in production from Vietnam’s offshore fields. According to Le, the state budget deficit is already above 5% of GDP and is growing. Its public debt is almost at the official ceiling of 60% of GDP. As such, the Vietnamese government is likely to face budgetary constraints over the next three to five years, which will limit its ability to spend on ‘big ticket’ defence items.
China has superiority in numbers and technology, so Vietnam will need to upgrade its command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) capabilities, using satellites and unmanned aerial vehicles to have any credible deterrent.
India has offered help in this regard. In January 2016, the Reuters news agency reported that the Indian Space Research Organisation would set up a satellite ground station in Ho Chi Minh City. The report quoted an unnamed Indian official as saying that in exchange for hosting the site, Vietnam would have access to real-time satellite data, including imagery. Depending on the resolution and timeliness of the imagery provided, this could have military applications for Vietnam, although reports in the Indian press in May 2017 suggested that the project had not advanced.
Vietnamese efforts to improve maritime domain awareness may benefit from the US Maritime Security Initiative. In 2016, the US sent a team of experts to Vietnam to brief officials on maximising the use of unmanned aerial systems. A 2016 report on the website of the US Naval Institute stated that the US would also provide Vietnam with 10 Maritime Search and Rescue Optimal Planning System hardware and software packages with associated training and support.
Given the focus on fisheries and China’s assertive use of its coastguard and maritime militias to support its South China Sea policy, coastguard and fisheries protection vessels are a key capability for Vietnam to develop. Over the past year, Vietnam’s coastguard forces have been bolstered by transfers from Japan and the US. In March 2017, Japan handed over a second-hand fisheries’ protection vessel, and in January 2017, it agreed to sell six new coastguard patrol vessels to Vietnam for USD338 million – with the purchase funded by a concessional loan. In May 2017, the US transferred a high-endurance cutter, the former USCGC Morgenthau , to Vietnam. The same week, US Ambassador Ted Osius oversaw a ceremony at which six 13-m Metal Shark Defiant patrol vessels were given to Vietnam. All of these vessels were provided without weaponry.
Since opening its new ‘International Seaport’ near the mouth of Cam Ranh Bay in March 2016, Vietnam has welcomed naval ships from France, India, Japan, the Philippines, Russia, South Korea, and Singapore, as well as China and the US. Cam Ranh International Port is a civilian facility, approximately one kilometre from the Vietnamese naval base, which is home to the country’s submarine fleet.
Perhaps because of the strategic sensitivity of the base, Vietnam had barred US warships (but not logistics vessels) from using Cam Ranh. However, that has changed since the opening of the new port. The Arleigh Burke-class destroyer USS John McCain visited in October 2016, and there have been two subsequent warship visits. At its opening, Vietnamese officials noted that it was capable of hosting an aircraft carrier, but none have yet visited. The largest visitor to date has been the Japanese helicopter carrier JS Izumo in May 2017.
Vietnamese officials interviewed appeared dismayed by the election of Donald Trump as US president because of his scepticism towards international trade and his focus on North Korea, to the apparent exclusion of other concerns in Asia. The Hanoi leadership has been actively seeking alternative security partners in case Trump should further downgrade US diplomatic and military support to Vietnam.
There are several potential triggers for conflict in the South China Sea. The most likely risk comes from competition over marine resources: hydrocarbons and fish. Since the oil rig standoff in 2014, China has avoided directly confronting Vietnam with further expeditions. However, there have been a number of smaller confrontations, usually involving fishing vessels. A government source in Hanoi speaking in May 2017 suggested that, on an average day, the Vietnamese coastguard counts 10-30 intrusions into the country’s claimed EEZ by Chinese fishing boats. There are also incidents closer to the Paracel and Spratly island groups.
Such episodes have been contained so far, but there is always the possibility that a clash between fishing crews could escalate into a major incident. In January 2017, Vietnam and China agreed on the regulations to implement a ‘fisheries hotline’ to resolve the dispute. This was first mooted in 2013, suggesting that its activation is a significant confidence-building step.
Oil could be another pretext. Vietnam wants Spanish energy company Repsol to drill appraisal wells in 2017 in Block 136, approximately 270 km offshore. It has previously avoided doing so for fear of Chinese objections: China has leased the same area of sea to a Hong Kong-based company, Brightoil. If Vietnam does authorise drilling here, China is likely to object and perhaps intervene.
Vietnam would also like to see Blocks 133/134 explored, but a well-placed source within the oil industry in Southeast Asia told in June 2017 that there was a tacit agreement between China and Vietnam that, for the time being, neither side would attempt to drill in these blocks to avoid confrontation. There is always the possibility, however, that one side or other may break this ‘truce’.
In January 2017, ExxonMobil signed an agreement for a gas development (CaVoiXanh – Blue Whale) 80 km off the central Vietnamese coast. The agreement envisaged the first gas being produced in 2023. The field lies well within conventional definitions of Vietnam’s EEZ, but China’s U-shaped line cuts through it. China has not formally responded to the agreement, but it may yet do so.
The course China’s leadership chooses to pursue in this case and in the South China Sea more broadly will probably depend upon which of two contradictory imperatives is stronger: its belief that every feature in the South China Sea rightfully belongs to China versus its desire to be seen as a responsible member of the international community.
For the time being, particularly since China is keen to promote the Belt and Road initiative and other trading arrangements such as the Regional Comprehensive Economic Partnership (RCEP), the situation appears stable. However, in May 2017, Duterte claimed that Xi had warned him there “would be war” if Manila drilled for gas on the Reed Bank. Although there is likely to be an element of rhetoric in such threats – if indeed they were made at all – what is certain is that Beijing regards the South China Sea as more than an issue of national security, but one of national entitlement.
Moreover, in a region as complex as the South China Sea, with a large number of competing state claimants, and with an even greater number of internal government and military agencies to co-ordinate, there is a real possibility of an incident emerging that – at least initially – develops beyond the control of the leadership in Beijing.
Although both countries claim links to the rocks and reefs of the South China Sea going back centuries, there is little concrete evidence of actual administrative control until the 20th century. China first made a formal claim to the Paracel Islands in 1909 and to the Spratly Islands in 1946. France, the colonial power in Indochina, made a formal claim to the Spratlys in April 1930 and to the Paracels in December 1931.
After the Second World War, China and France took up rival positions in the eastern and western Paracels respectively. France renewed its claim to the Spratlys in October 1946 and Chinaoccupied one of the features, Itu Aba, two months later.
In January 1974, People’s Republic of China forces invaded the western Paracels, evicting the (southern) Vietnamese. Several Vietnamese were killed. In response, the Saigon government ordered the occupation of several of the Spratlys. These positions were taken by advancing (north) Vietnamese communist forces just before the end of the Vietnam War in early 1975. Relations between Vietnam and China deteriorated badly after the war, resulting in a border conflict in 1979 and a proxy war in Cambodia that lasted until 1990. The PRC first occupied reefs in the Spratlys in 1988.