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Friday, May 23, 2014

Current Events: Recommendations Concerning HD-981 Vietnam-China Maritime Dispute

Earlier this May, China National Offshore Oil Corporation moved its Haiyang Shiyou HD-981 oil rig to within 120 miles of Vietnam's coast southeast of the Paracel Islands. The HD-981 Vietnam-China dispute is the latest in a series of territorial disputes involving China and its East and Southeast Asian neighbors. The intent of the manufactured crisis is to bring about a change in the status quo within the South China Sea, of which more than 80% China claims as part of its nine-dash line:

“Each step is designed by China not to provoke conflict, of course, but to change the understanding of the status quo, so that if they get away with it in Vietnamese waters, then they continue build these [oil rigs] in other waters and use the same tactic of claiming that this is really Chinese territory...China is across the board attempting to create a new type of understanding of the territory that is its own or over which it should have control.” - Michael Auslin, 2014    
China's decision to move the $1 billion dollar rig near the Paracel islands was a politically motivated rather than financially based decision as the prospect of hydrocarbon deposits within the area is questionable (Panda, 2014). Furthermore, the timing of the incident,  the rig was moved in place shortly after President Obama departed from his tour of Japan, South Korea, the Philippines, and Malaysia, suggests China is testing the resolve of the United States in its commitment to the pivot or Asia-Pacific rebalance (Fravel, 2014). Despite the strong historical animosity between China and Vietnam, the HD-981 incident is especially notable given that the governments of both countries have greatly expanded economic ties with one another in recent years and Premier Li Keqiang visited Hanoi in October of last year. 

Vietnam is not a treaty bound ally of the United States despite steady progress in mutual defense cooperation and exchanges since the 1990s. The Government of Vietnam is currently divided among those who want closer ties with the West and the United States and those who seek to strengthen ties with China:
"The Vietnamese do not see normalization with the U.S., nor their continued normalization with China, in zero-sum terms. They realize that engaging more with the U.S. does not necessarily entail engaging less with China. Vietnam continues to acknowledge the critical importance of an effective, friendly relationship with China, even in the midst of exacerbated concerns regarding Beijing’s efforts to make its influence felt in the region. This means that the Vietnamese will not risk damage to their relationship with China in order to strengthen their relationship with the U.S...For this reason, the U.S. has little to gain from portraying its interest in improved strategic relations with Vietnam as focused exclusively on the extent to which enhanced defense and security cooperation between Hanoi and Washington can impact China’s strategic calculations." - William Jordan, Lewis M. Stern and Walter Lohman, 2012 
Given the somewhat limited extent of Vietnam-US defense engagement in conjunction with the aforementioned economic and political developments between Vietnam-China relations, Vietnam became the preferred candidate for another territorial incident. The PRC leadership astutely determined that the desire of Vietnam's Government to maintain robust economic ties with the PRC outweighed Vietnam's traditionally firm stance on maritime disputes. Because Vietnam desires close economic ties to China, its response has been limited to rhetoric and the deployment of its coast guard. 

Thus, the situation is more nuanced than prior territorial incidents involving stalwart US allies who are largely unified in their opposition of Chinese territorial claims such as Japan and the Philippines. This is not to say US interests are not at risk in the current crisis, but a hawkish US response will likely be undesired by Vietnam. Furthermore, a hawkish US response would undermine current efforts to promote greater military to military communication and the establishment of release mechanisms for US-China tensions. For example, the US recently concluded a series of high level military exchanges with China and is about to partake in joint exercises with People's Liberation Army Navy (PLAN) vessels in RIMPAC. 

As part of the pivot, the US seeks to maintain its role in the post-World War II international order e.g. maintaining US influence through international bodies and institutions, freedom of navigation, and the diplomatic resolution of territorial disputes (Fravel, 2014). These traditional elements of US foreign policy are at risk by China's latest provocation as they constitute a clear violation of several established international laws and norms in which the US has helped to both develop and promote e.g. the United Nations Convention on the Law of the Sea (UNCLOS). Therefore, the US response to the HD-981 dispute should be tailored to preserve US backed international maritime laws and established international norms such as of freedom of navigation while also accounting for the somewhat divided stance of Vietnam's Government with respect to China.   

Recommendations for the United States

Image 2: Vietnamese President Truong Tan Sang with President Obama. Image Credit: Reuters, 2013.

Thus far, the US response has been limited to Secretary of State John Kerry and the State Department criticizing the HD-981 incident as provocative. Kerry spoke with Chinese Foreign Minister Wang Yi about the incident but China has been unreceptive to the US narrative concerning the crisis. Chief of China's military, General. Fang Fenghui, responded to the HD-981 incident during his visit with US officials:

"We believe that the ones that are provoking those issues in the South China Sea [are] not China, but certain countries that are attempting to gain their own interests, because they believe that China is now developing its economy and the United States is adopting this Asia-Pacific rebalancing strategy"

It is abundantly clear that current US statements to discourage China from challenging the territorial status quo in the South China Sea are insufficient. Despite the aforementioned caveats regarding the desire of Vietnam to maintain favorable economic ties with China, the HD-981 incident can still serve as the impetus for further US-Vietnamese defense cooperation. If the US can improve its defense ties with Vietnam as a result of the current crisis, the precedent would serve as a powerful deterrent for future Chinese provocations. However, the US should frame its new effort to improve relations with Vietnam in a manner that does not directly oppose China. Greater soft power engagement through the Trans-Pacific Partnership (TPP) would greatly enhance US ties with Vietnam:
"By 2025, Vietnam would stand to gain nearly $96 billion or 28 percent of its GDP. This is largely due to exports increasing an estimated 37 percent...Exports and privileged access to the U.S. market benefit emerging Asia, as the terms of trade will favor them over trading partners not at the table. The U.S. and Japan could also act as an economic counterbalance to China [which is not part of TPP talks] in the region—helping the smaller, less-developed countries compete for export growth" - Samuel Rines, 2014
Greater US-Vietnamese economic engagement as a result of the TPP would allow Vietnam to be less dependent on China for its economic growth over the long-term and ensures Vietnam maintains a vested interest in pursuing relations with the US. Soft power measures over time could form the basis of greater military cooperation.

As part of its effort to grant greater flexibility to Vietnam, the US can also help diversify Vietnam's military cooperation with US allies such as the Philippines. Vietnam and the Philippines have already concluded a number of defense agreements and exchanges in recent years. Encouraging stronger Vietnam-Philippines engagement in the South China Sea is largely to the benefit of the United States as it provides a means to further develop both countries' military capabilities while allowing Vietnam flexibility by avoiding a one-sided US or China centric foreign policy.

Over the long-term, an agreement between the US and Vietnam similar to the current Enhanced Defense Cooperation Agreement between the US and the Philippines would greatly assist the pivot. In the short-term, US military planners greatly desire routine access to Cam Ranh bay, one of the best deep water ports in the Pacific, for fleet maintenance purposes. Vietnam has routinely expressed a desire for access to US arms exports, spare parts and restoration of its Vietnam era US equipment, and an end to US scrutiny regarding human rights (Weisgerber, 2012).

Image 3: Former Secretary of Defense Leon Panetta visiting Vietnamese officials in Cam Ranh bay. Image Credit: Department of Defense, 2012.

The US continues to prohibit the sale of military equipment to Vietnam on the basis of human rights violations within the country. Given the stake of US interests in the region, it might be wise for the US to offer Vietnam some degree of flexibility on human rights issues. This would not entail a complete withdrawal of human rights concerns, but Vietnam's treatment in US arms sales is somewhat arbitrary. When the national interest is at stake, Washington has shown  a willingness to overlook human rights violations if it means hedging potential national security threats. For example, as part of its effort to contain Iran, Washington has not only overlooked human rights issues within its Gulf state allies but also has provided them with access to some of its most advanced arms exports including the THAAD and PAC-3 anti-ballistic missile (ABM) systems. Thus, the sale low-end items such as spare parts for Vietnam's fleet of UH-1 helicopters should be permitted especially since these requests do not violate existing foreign military sale regulations (Jordan, Stern & Lohman, 2012).      

If the sale of spare parts remains politically difficult in Washington, it is likely the parts could be delivered through intermediaries or US allies given widespread usage of the UH-1. Private contractors could also preform the restoration work on Vietnam's UH-1 fleet, many logistics and support specialized private military firms (PMF) such as MPRI provide aircraft maintenance services. The use of private contractors would be convenient as it would grant the US a degree of separation from being directly involved in the UH-1 restoration work, which is beneficial as it minimizes potential Chinese and domestic scrutiny. Depending upon the firm (e.g. a large PMF like MPRI), the extent of official US Government involvement would be limited to State Department approval. In exchange for the spare parts, the US Government should press Vietnam for greater access to Cam Ranh bay in the form of more allotted port visits per year and investment in port facilities for maintenance work.

As far as high-end arms exports are concerned, large scale support from Congress is an unavoidable prerequisite. Furthermore, Vietnam's military is predominantly a Russian military supplied force. The interoperability issues that would result from a mixed Russia-US arms supply would likely limit the effectiveness of the Vietnamese military in the short-term. It often takes decades to effectively switch between a Russian and US equipped force, e.g. Egypt after the Camp David Accords 1978. Thus, the problematic nature of operating a mixed US-Russia arsenal and the political difficulties in Congress make high-end US arms exports to Vietnam unlikely. Vietnam can still effectively deter future Chinese attempts at forceful resolution of territorial disputes with a combination of Russian arms exports and US militarily assistance in the form of military training exercises and providing opportunities for Vietnamese officer education and training.

The combination of these measures would assist Vietnamese forces denying China the ability to seize and control disputed territories in a similar manner as China's current anti-access/area denial (A2/AD) strategy is situated against the United States. In essence, China would not be able to resolve existing territorial disputes effectively with the use of force if the aforementioned Vietnamese strategy was successfully implemented. In comparison to active power projection assets such as amphibious assault ships, which are used take seized island territory, an A2/AD strategy is much more economical and practical given Vietnam's circumstances. The basis for Vietnam's A2/AD strategy is already underway with the conclusion of several Russian arms purchases including: 6 Kilo-class submarines, SS-N-22 Sunburn anti-ship missiles, Kh-35 anti-ship missiles, SS-N-26 Oniks anti-ship missiles, the S-300 surface to air missile system, Molniya/ Project 12418 fast attack craft, Su-30s, etc.

In conclusion, the HD-981 incident can serve as a means to enhance US-Vietnamese cooperation. Despite the desire for the Vietnamese Government to prioritize economic ties with China, its more than likely that Vietnam's Government wishes for a flexible economic and defense policy not directly situated with either the United States or China. Expanding US-Vietnamese defense ties remains plausible so long as the US offers Vietnam increased flexibility in both economic and defense terms via the TTP and expanded relations with US allies such as the Philippines. A strong Vietnam-US defense partnership would greatly benefit the pivot if the US can obtain increased access to Cam Ranh bay and other Vietnamese facilities as part of its "places not bases" strategy.


  1. Why Did China Set Up an Oil Rig Within Vietnamese Waters?, Ankit Panda, 2014.
  2. China's Oil Rig Gambit: South China Sea Game-Changer?, Carl Thayer, 2014.
  3. The Gift of American Power, Robert Kaplan, 2014.
  4. US-China To Set Up Video Hotline, Talk Of Joint Exercises, Colin Clark, 2014.
  5. Vietnam Frees Some Dissidents Amid TPP Trade Talks, Luke Hunt, 2014.
  6. The $1 billion Chinese oil rig that has Vietnam in flames, Adam Taylor, 2014.
  7. China Claims U.S. Is Encouraging ‘Dangerous and Provocative Actions’ in Oilrig Standoff, Sam LaGrone, 2014.                                                                           
  8. China's Big Strategic Mistake in the South China Sea, Ha Anh Tuan, 2014.
  9. At Pentagon, Chinese general warns US on territorial disputes, Chris Carroll and Jon Harper, 2014.
  10. The Battle for the South China Sea, Michael J. Totten, 2014.
  11. China’s Naval Modernization: Implications and Recommendations, Andrew S. Erickson, 2013.
  12. Is a Philippine-Vietnam Alliance in the Making?, Carl Thayer, 2014.
  13. The Limits to US-Vietnam Ties, Richard Pearson, 2014.           
  14. China and America Clash on the High Seas: The EEZ Challenge, Jeff M. Smith and Joshua Eisenman, 2014.                                                                                          
  15. Vietnam’s Russian Restocking, Defense Industry Daily, 2014.                                                    
  16. U.S.–Vietnam Defense Relations: Investing in Strategic Alignment, William Jordan, Lewis M. Stern and Walter Lohman, 2012.                                                                                                       


  1. Good Article Matt. :-)

    The USA should be cautions though with Vietnam's military purchases. Russia will not be happy if it loses any contracts to USA.

    Also on another note. The Lib's (Tony Abbot) are thinking of converting one of our brand new LHD to be able to lunch 24 F35 short range take off, Vertical landing. What's you thought on it?, Should we just buy one from scratch, or spend the billions and 5 years in the dock trying to convert it?

    If it can even be done, it will be a mess and a waste of money IMO.

    1. Well its not like US-Russian relations are going to improve any time soon ;)

      I'd have to see more specific figures but my general impression is, no its not worth it. Its generally not economical to acquire such a small and specialized fleet. The configurations I've read vary from 6 to 12 per ship (I"m assuming 24 is total for the two ships?). Defense purchases always have be viewed from an opportunity cost perspective, buy buying this big ticket item, what are you potentially sacrificing? The ASW helicopters from the Canberra-class are extremely valuable given China's increased emphasis on Submarines. I think the worst offender is a domestic Collins class as an off the shelf version could be more than $15 billion less and more capable. The Australian military could really use that extra money. In broader terms, I'm glad to see Australia is acquiring new capabilities and making sure its armed forces are capable (close to 2% GDP defense spending). The US has way too many free rider allies as it is. If you have the time you may find these interesting:

      The rise of China and America's Asian allies (ANU):

      Bob Gates on Russia and China (CFR):

    2. "Well its not like US-Russian relations are going to improve any time soon ;)" ha, understatement of the year.

      Yes, 24 for the 2

      I will watch the vids latter on in the week when I get a chance.

      With the Sub's they even floating the idea to buy USA Virgina class, even though they have said publicly they would not. Whats floating around is 6 V class at a cost of about $20billion and saving of $20 billion to $25 Billion on the $40-$50 billion budget. Fingers cross, and depends on how much of a fit/cry/protest the Greens Party will have.

      I think this new government is looking towards more of a projection/denial. Not Just a defense capability. But as usually they will try to do it on the cheap.

      What is the most effective class of Aircraft Carrier would the USA recommend for Australia.?? In your opinion.

      My thoughts are One that can Lunch 12 F18/growlers. With 12 to 24 F35 and a Few long range Helicopters?

    3. If Australia is really serious about getting a carrier, going the domestic route is rarely ever the correct choice if you don't have experience in the field e.g. carriers. Luckily for Australia, I believe there is a possibility it could acquire HMS Prince of Wales, a 75,000 carrier capable of carrying 36 F-35B aircraft.

      The UK wants two carriers (HMS Queen Elizabeth & HMS Prince of Wales) but the budget cuts have hit pretty hard. The only reason they haven't canceled Prince of Wales is its more costly to cancel the ship (due to penalties) than to continue building it as per the contract with BAE. The UK is still tying to figure out what its going to to with the second carrier but the decision won't be made until 2015.

      Australia could lobby to buy 2nd carrier at reduced cost which is better than mothballing it plus its always better to give unused hardware to allies. If Australia figures out how to integrate a carrier into its existing force structure and how the addition of a carrier significantly helps Australia achieve its national security objectives, then I’d go through with it. The problem, like always, is money :) For the F-35s and the ship its going to be at least $5.5 billion dollars. Unfortunately, I don't think it can operate growlers btw, but I think the Prince of Wales would be more capable than most carriers, certainly more capable than the Liaoning and her air wing.

      How resistant are the greens to having nuclear powered US ships in Australia? I am discussing new basing locations for the US with a colleague of mine. The logistics hub to support carriers at Yokosuka Japan is vulnerable but I figured the greens would never allow a carrier in Australia short of wartime conditions.

  2. I believe the PM has started a conversation, into the subject. For the moment he is seeing what are the best options. We are doing another White paper, so this will be apart of it.

    It comes down to the Sub's I believe, if we build them, then we will be wasting $40-$50 billion. If we buy the then we can save $20-30b. That's why I think he is looking to see what it will cost to redesign them. These are vertically Aircraft Carriers in size. If we could get a good deal on the HMS Prince of Wales, then that would be great for Britain and us.

    What could the USA build with more capability for about $5-6 billion?

    How resistant are the Greens to nuclear power sub's. hahaha very! they are called the Greens

    These are the looney left we have here. The Green stop us from having nuclear power here in Australia, back 30 years ago. Australia has 40% of the world Uranium, and that's only the ones we know about.

    It's our U that powers some of your sub's and Aircraft carrier, because of the high quality. But that has never been made public, nor confirmed other than the odd story leak.

    We would welcome new US/AUS military hub in Australia, both Labor and Libs would support that. The 2500 troops was pretty much well accepted here. We also have Both British and USA stealth Drones operate out of out bases, all the time.

    We allow USA aircraft carriers to dock here all the time and get resupplied, that's not the issue at all, it's the nuclear waste and servicing that is the issue. That's where the greens attack hard at. As you read from those post i put up, they run that fear of nuclear disaster form a US built sub.

    Hell the greens even attacked the F35 purchases. That how extreme left they are. They only have 7-10% of the vote in Aus, but it's there protest groups that give them power.

    They are able to take hostage of the debate, by putting a pic of Fukushima and a child and screaming. I gather the US have your own groups like that.

    It's a big ask to have a USA nuclear base here, all other are fine. But it will take political wellness from both parties, which can happen if we have the right selling points. The Navy need to come out as sell the Issue well. As well as both parties. At the moment the navy needs to get there act together.

    At war time the greens will be wiped out. If troops where to ever land on Aus Soil, it would change the country forever. (hopefully that will never happen)

    6 nuke sub's should be the way to go, but it's the sell and the reason. IF the navy came out hard and with the backing of the USA navy saying Australia need them" to sell it to the Australian ppl, then I think it could be done. It won't just be the Sub's we buy, it will also be a $2-3 billion hubb.

    But in the current environment, I can't see it happening. But they debate has been increasing ever since the $45 billion 12 sub plan.

    1. For $6 billion I recon we could get either: 3 DDG-51 Flight IIIA destroyers, 3 Virginia-class submarines, almost 2 DDG-1000s, or a lot of the Navy's unfunded priority list items:

      6 Virginia-class submarines would out preform any conventional AIP diesel-electric submarine I know of. An acoustic signature of just 95 decibels (compared to ocean background noise of 90 decibels) plus range and endurance. Even though China's diesel electric submarines don't come close (Kilo is 105 decibels or 10 times louder), a lot of their indigenous subs get German diesel electric engines which are apparently not covered under the arms ban because they are "dual use" technologies. If you did go the diesel route over the Virginia, I think you'd certainly need more than 6 (my understanding is the 12 sub figure was somewhat arbitrarily made).

      China is working hard though to counter US subs by copping the US SOSUS system, which was our ace in the hole against Soviet subs:

      I think Obama should certainly try and get new bases in the Pacific. The places, not bases strategy is still dependent upon a few key US bases for sustainment and logistics like Yokosuka and Guam. New naval facilities in Australia, even if non-nuclear would be a start. I've looked into establishing bases in Pacific states that are in "free association" with the US e.g. Federated States of Micronesia.