China's oil rig move leaves Vietnam, others looking

China's oil rig move leaves Vietnam, others looking
A Chinese ship (R) uses water cannon on a Vietnamese Sea Guard ship on the South China Sea near the Paracels islands, in this handout photo taken on May 3, 2014 and released by the Vietnamese Marine Guard on May 8, 2014.

HONG KONG - China's decision to park its biggest mobile oil rig 120 miles off the Vietnamese coast has exposed how vulnerable Hanoi, and other littoral states of the South China Sea, are to moves by the region's dominant power to assert its territorial claims.

The Communist neighbours are at loggerheads over the drilling rig in contested waters, each accusing the other of ramming its ships in the area in the worst setback for Sino-Vietnamese ties in years.

While Hanoi's dispute with Beijing over the Spratly Islands, for example, involves fellow claimants the Philippines, Malaysia and Brunei, it is only Vietnam that contests China's expanding occupation of the Paracels.

For years now Hanoi has tried to open talks with Beijing over China's moves on the islands, insisting that they are Vietnamese territory.

While the countries have put aside historic suspicions in recent years to demarcate their land border and the Gulf of Tonkin, negotiations stop dead at the Paracels further south.

Whenever the Vietnamese raise the issue, the Chinese say there is nothing to discuss because the Paracels are under Chinese occupation and sovereignty and not in dispute, according to diplomats close to regular Sino-Vietnamese negotiations.

And although officials on both sides now say they want talks over the intensifying stand-off at sea, where dozens of rival patrol ships flank the rig, the Chinese are determined to keep the question of sovereignty off the table.

Wu Shicun, president of the National Institute for South China Sea Studies, a Chinese government think-tank, said Beijing was not about to back down over what it calls the Xisha islands. "I think China will keep moving ahead with its plan (in Xisha), no matter what Vietnam says and does," Wu told Reuters.

Chinese oil industry sources say hydrocarbon reserves under the rig's current location remain unproven, and point to political, rather than commercial, interests driving its placement on May 2 by China's state-run oil company CNOOC.

Much of the South China Sea is considered potentially rich in oil and gas, but it remains largely unexplored.


Hanoi strategists have been closely watching the construction and initial deployments of the rig, HD-981, over the last two years. "It's been one of our worst fears that it would eventually be used against us," said one Vietnamese diplomat. "But the timing has caught us by surprise." Vietnamese diplomats say they will be pushing for support when regional leaders gather in Myanmar for a weekend summit of the Association of Southeast Asian Nations (ASEAN).

But analysts say there is no guarantee of long-term regional or international support for Vietnam, even as the US slams China's "provocative" act and urges Sino-Vietnamese negotiations on sovereignty.

Vietnam has a range of budding military relationships, including with the United States, but it has rejected formal alliances, unlike Japan and the Philippines, long-time Washington allies locked in their own worsening territorial disputes with China.

"China does seem to have moved at the point of maximum vulnerability for Vietnam," said Carl Thayer, an expert on the South China Sea at the Australian Defence Force Academy. "There is a risk some other countries will simply say it is not their problem," he said.

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