Good time to calm troubled waters

Michael Richardson

A Chinese Navy ship will dock in Vietnam today. The five-day port call in Danang, the first by a Chinese warship to Vietnam in seven years, follows a high-level agreement last month by the two governments outlining new steps to resolve their long-running territorial disputes in the South China Sea.

China and Vietnam have had a tense relationship, despite being ruled by communist parties. They now face challenges as their export-oriented economies slow under the impact of the global credit crunch. They have evidently decided to give primacy to strengthening bilateral trade and investment ties to offset the wider economic downturn.

The latest measures to improve relations emerged during the visit to China of Vietnamese Prime Minister Nguyen Tan Dung last month. A joint statement issued at the end of the visit said the two sides believed their 'strategic partnership ...in the context of the complex and changing international political and economic situation is in the fundamental interests of both countries, ruling parties and peoples'.

Under the plan, Chinese and Vietnamese companies will be encouraged to engage in large-scale projects in infrastructure construction, chemicals, transport, electricity supply and home building. The aim of these projects, as well as of new road, rail and shipping connections, is to bond the neighbouring provinces of southern China and northern Vietnam.

Whether this increase in two-way trade and investment materialises remains to be seen. The proposed expansion of economic ties will depend on progress in managing and eventually settling festering bilateral territorial disputes. Both sides have reaffirmed that they would complete demarcation of their 1,350km land border by the end of this year, a deadline that was set in 1999.

What is new in the joint statement is an agreement to start joint surveys in disputed waters 'beyond the mouth' of Beibu Bay (Gulf of Tonkin) and a promise to jointly exploit the demarcated zones for their fisheries and oil and gas potential.

The most contentious territorial issues in the relationship between China and Vietnam are beyond the mouth of Beibu Bay. They revolve around rival claims to the Paracel Islands, in the northern part of the South China Sea, and the Spratly Islands, an archipelago of widely scattered atolls and coral outcrops in the middle of the South China Sea.

The Paracels were seized by China from South Vietnamese forces in 1974, when Hanoi and Beijing were supposed to be allies. Chinese forces have since reinforced their garrison on the Paracels and built a military airbase there.

The Spratlys lie to the east of busy international sea lanes in the South China Sea connecting the Strait of Malacca and Singapore with China, Japan and South Korea. Control of the Spratlys might be used not just to establish naval bases but also to bolster claims to fisheries and offshore oil and gas resources in the South China Sea. China, Taiwan and Vietnam have all staked claim to the Spratlys, surrounding waters and any resources they may contain.

However, China's claim is far wider, encompassing almost all of the South China Sea, although the precise limits are not clear from the broken line drawn on official Chinese maps. This claim, if enforced, would bring China into the maritime heart of South-east Asia.

Malaysia, the Philippines and Brunei each asserts sovereignty over some of the Spratly islands as well as offshore zones closest to their shores.

There have been numerous stand-offs among contending claimants in the past couple of decades. The main encounters have been between China and Vietnam. In 1988, they fought a brief naval battle near one of the Spratly reefs. More than 70 Vietnamese sailors were killed and several of their vessels sunk in that incident.

In the Spratlys, the armed garrisons that all the claimants, except Brunei, have stationed on the tiny dots of land they say are theirs are still in place and, in some cases, have been reinforced. A code of conduct for the South China Sea, signed by Beijing and Asean in 2002, is voluntary, while a joint seismic survey of hydrocarbon resources, agreed by the national oil companies of China, Vietnam and the Philippines in 2005, lapsed last July and may not be renewed.

In their Oct 25 joint statement, China and Vietnam agreed to find a 'long- term' solution to the South China Sea issue. No detail was offered on how such a resolution might be reached. But, significantly, they said it would be in accordance with the 1982 United Nations Convention on the Law of the Sea.

Meanwhile, they would observe the code of conduct and refrain from any action that would escalate disputes. They would also consult on finding a way for joint petroleum exploration. On the principle of starting with the easier steps, they agreed to collaborate on oceanic research, environmental protection, weather forecasting and information exchanges between the two armed forces.

A strategic cooperation pact between state-run China National Offshore Oil Corporation and its Vietnamese counterpart, PetroVietnam, is also reported to have been signed during Mr Dung's visit to China. Together, these accords would be important confidence-building measures, provided their terms are observed by both sides - something that has not been a feature of past agreements between China and Vietnam on the South China Sea.

However, several things may be different this time. Beijing wants to defuse widespread concern in Asia over its growing military power. In this context, the South China Sea is a sensitive touchstone.