Vietnam Signals Softer Stance on Contested South China Sea

Vietnam shows signs of softening its approach toward China over their bitter maritime dispute, a move welcomed by nervous leaders in Beijing as it could rebalance Hanoi’s foreign policy away from Washington while cooling decades of strife.

Beijing and Hanoi issued a communique Saturday proposing negotiations on their conflicting claims in the South China Sea, state-run media from both sides report. The two sides will also look for shorter-term solutions that avoid slighting either country’s political position, the reports say.

Cooperation with China would remove the thorniest opponent to Beijing’s expansion in the sea. Four other governments claim the ocean, which is rich in fishery stocks and possible fuel reserves. They normally keep quiet about Beijing’s military maneuvers and reclamation of small, disputed islets.

Friendlier Sino-Vietnamese ties also would help protect marine shipping lanes that bring exports from Asia to markets in the West and make the commercial fishing industry safer for the millions who depend on it, said Frederick Burke, a partner with the multinational law firm Baker & McKenzie in Ho Chi Minh City.

“There was a concern about instability, and that this might be a flashpoint for conflicts as China’s military capacity continues to grow,” Burke said. “I think those concerns won’t disappear overnight, but this is a very strong positive message that the parties will work things out.”

Vietnam is often described as the most assertive opponent of China’s expansion into the 3.5 million-square-km sea since around 2010. It competes with China to reclaim land in the Spratly chain and has criticized Beijing’s control of the Paracel Islands, which lie east of Vietnam and southwest of Hong Kong.

In 1974, China seized Paracel islets occupied then by South Vietnamese troops and 70 Vietnamese sailors died in a naval battle with China in 1988. In 2014, the two sides got into a boat ramming clash that set off deadly anti-China riots in Vietnam.

Relations showed initial signs of a thaw in September when Chinese Premier Li Keqiang and Vietnamese Prime Minister Nguyen Xuan Phuc agreed to manage maritime differences and improve cooperation.

Stung by a world arbitration court ruling against the basis for its claim to 95 percent of the sea, China was keen then to negotiate differences with other countries.

A peace-seeking statement from China and any other maritime claimant “fits China’s damage-control agenda” after the arbitration verdict in July, said Denny Roy, senior fellow at the U.S. think tank East-West Center.

China prefers bilateral talks rather than negotiating through multi-party organizations such as the 10-country Southeast Asian bloc ASEAN or the world court, which may dwarf Beijing’s diplomatic clout, analysts believe.

The communique issued Saturday in Beijing was part of Vietnamese Communist Party General Secretary Nguyen Phu Trong’s four-day visit to China, where he met with his Chinese counterpart Xi Jinping.

It’s too early to tell what will come of the statement itself, analysts say. It overlaps points in the 2002 Declaration on the Conduct of the Parties in the South China Sea signed by countries throughout Southeast Asia, Roy said.

Brunei, Malaysia, Taiwan and the Philippines also claim all or parts of the sea.

Vietnam may be keen to engage China now as U.S. President-elect Donald Trump prepares to take office Friday, some experts say.

Trump says he plans to withdraw from the Trans Pacific Partnership, or TPP, a 12-country trade zone led by the United States and including Vietnam. Vietnam’s economy depends heavily on exports, including to the United States and fellow TPP member Japan. The 12 countries signed the deal about a year ago.

“I think Vietnam officially, given that the TPP now hasn’t passed, there’s probably an incentive for Vietnam officially to engage with China,” said Alaistair Chan, an economist with Moody’s Analytics in Australia. “Obviously all countries will be wanting more extra stability in the region. I think it’s more of a Vietnam issue more than anything, though.”

The Vietnamese news website reported the Communist party heads agreed last week to “accelerate” talks on demarcating an area in the shared Gulf of Tonkin and move toward joint development. The agreements mean “effectively stepping up” joint projects in “less sensitive fields,” the report said.

People in Vietnam are not changing their expectations toward China yet, especially on economic relations, said Hoang Viet Phuong, head of institutional research and investment advisory with SSI Securities Services in Hanoi.

“At this point in time we haven’t seen any real development except for the recent visit to China, but the real impact, we need to work on that,” she said. “I think people might not be that excited, except for the fact that last year we know that quite a lot of tourists came to Vietnam.”

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