A NO-WIN SITUATION

By+Lei+Xiaohua

The Xisha Islands in the South China Sea should not be a point of contention as Viet Nam recognized Chinas sovereignty over the islands in a 1958 diplomatic note to the Chinese Government. Disputes surfaced several weeks ago， however， when Vietnamese ships harassed a Chinese oil company operating in waters off Zhongjian Island， one of the Xisha Islands. Soon， anti-China demonstrations broke out in Viet Nam， escalating into violent riots against Chinese and other foreign companies， in which four Chinese citizens were killed and more than 100 others were injured.

These recent developments have led to reflections on why serious conflicts have occurred despite agreements between the two countries on settling maritime disputes peacefully， and how they should manage their relations in the future.

Causes of the conflict

The tensions came as a surprise to many scholars and observers. But they did not emerge purely by chance； instead， they resulted from the aggravation of Viet Nams domestic problems over the years， coupled with evolving international politics.

Given the impact of the global financial crisis， Viet Nams economy is under mounting downward pressure. High unemployment and a growing wealth divide have fueled public discontent with the government. A few people use the maritime clashes as a pretext to instigate protests in order to vent their dissatisfaction.

Also， human rights and pro-democracy groups both in and outside Viet Nam colluded to instigate anti-China riots by capitalizing on Vietnamese patriotism. Anti-China protests first broke out outside Viet Nams borders， with some of the protesters being anti-government activists in exile. While the real target of the protests might have been the Vietnamese Government， Chinese companies and people in Viet Nam became the primary victims.

In addition， the protests showed Vietnamese peoples mixed feelings toward foreign enterprises. Foreign businesses have poured into Viet Nam and thrived in the country under its reform and openingup policy. The Vietnamese public， however， continues to hold a love-and-hate attitude toward these companies.

What complicates matters is that views on Viet Nams relations with China vary greatly among Vietnamese leaders. While the pro-China camp underlines the importance of friendly ties， a few senior leaders represented by Prime Minister Nguyen Tan Dung cling to the realistic dogma of putting national interest above everything else—a position that appeals to nationalists and young people. Small wonder then that the prime minister made remarks and gestures that directly led to the Vietnamese Governments inefficient handling of the anti-China riots.

Externally， influence of the United States should not be underestimated. With geopolitical interests around the globe， the United States feels obliged to play a leading role on the international stage. Chinas rise， however， has evoked fear among many in the United States， who perceive the emerging power as a threat. In response， Washington has claimed that it is ready to address Chinas “provocation” with its “pivot-to-Asia” strategy. The United States has leveled criticism at China on the latters disputes with neighboring countries in the East China Sea and the South China Sea. It has also strengthened relations with its allies and supported their claims in the disputes in an attempt to advance its own interests in the Asia-Pacific region.

Though Viet Nam is not an U.S. ally， Washingtons support for Japan and the Philippines have emboldened Hanoi. In the belief that the United States will back its claims and actions， Viet Nam has resorted to brinkmanship by adopting an increasingly tough and provocative stance toward China. In its opinion， China， which is focused on realizing its goal of national renewal， will not use force against Viet Nam in the South China Sea in the next decade. Viet Nam therefore feels an urge to make the most of this period to solidify its interests in the region.

Moreover， as a U.S. ally， Japan has fanned the flames in China-Viet Nam disputes. While engaging in a fierce contest with China over the sovereignty over the Diaoyu Islands in the East China Sea， Japan has offered encouragement and assistance to incite countries embroiled in territorial disputes with China in the South China Sea to stir up new trouble.

The way forward

The anti-China riots abated after China exerted pressure on the Vietnamese Government. At sea， however， Viet Nam continues to harass the Chinese company by forcefully intruding the warning area around the Chinese oil rig. While Chinese and Vietnamese ships continue to clash as Viet Nam seeks to assert its self-perceived “sovereignty，” chances for the conflicts to escalate again are slim. This is because Viet Nam will not able to win this asymmetric “battle，” nor can it afford to prolong it.

The deterioration of China-Viet Nam rela-tions and open conflicts between them are detrimental to both countries. The anti-China riots jeopardized Viet Nams international credibility and image as an investment destination. The Vietnamese Governments failure to protect foreign investors will prompt prospective investors to reassess Viet Nams investment climate and social stability， posing a challenge to the countrys efforts to attract further foreign investment. The riots also dealt a blow to Viet Nams ailing economy as 60，000 workers lost their jobs in Binh Duong Province in the aftermath. Also， they brought to light strategic disagreements among the Vietnamese leadership， pushing the Vietnamese Government to the brink of a public relations crisis.

The riots had disastrous consequences for China as well. They inflicted losses of life and property on Chinese companies， thus dampening their confidence in investing in Viet Nam. They also set a negative precedent for other countries involved in disputes over the South China Sea. The Philippines， for instance， sent a complicated message when it openly expressed concerns that the Filipinos may follow in the footsteps of the Vietnamese.

The door to diplomatic negotiations between China and Viet Nam remains open. The problem is whether Viet Nam is willing to return to the negotiating table. Viet Nam knows that it has little room for maneuvering in negotiations. On May 22， Dung proposed to resolve disputes over territorial waters with China by legal means for the first time. He said that Viet Nam was considering various“defense options” against China， including legal actions. If Viet Nam turns to international law， the already strained bilateral ties will become even tenser. The bilateral trade relationship will also suffer.

Chinas position on maritime disputes is clear. It will never waver in its efforts to protect national interests in the East China Sea and the South China Sea. At the same time， it is committed to resolving disputes through negotiations. In the face of unilateral provocations， it will not be daunted， but will react reasonably， effectively and with self-restraint to defend its interests. It will also take measures to prevent tensions from spinning out of control， preserve existing consensus and safeguard regional stability and order.

The economies of China and Viet Nam have yet to become highly integrated as their trade and economic cooperation are still at the low end of the value chain. Moreover， despite frequent youth exchanges and close cultural cooperation， the two countries have yet to forge a special relationship culturally. Viet Nam not only allows antiChina rhetoric to prevail in society but also deliberately portrays China as an aggressive power that lords itself over weak countries. As a result， young people in Viet Nam hardly identify with China.

In a nutshell， economic and cultural ties between China and Viet Nam are not strong enough to convince them that negotiations are the premium option to settle disputes. Against this backdrop， China needs to improve dispute settlement mechanisms while making bilateral agreements more binding and workable. In the long term， however， enhancing economic interdependence and building cultural rapport provide the most viable solution.