As South China Sea stakes ratchet ever higher, Vietnam seeks out calmer waters

“I am very concerned that these aggressive Chinese acts could escalate into conflict, especially when Vietnam has just lost a talented party chief,” Huu said. “I hope the Vietnamese government will always make the right decisions to live peacefully with other countries and still protect our sovereignty.”

But Huu need not fret too much – at least for now. Vietnam, analysts note, wields a potent diplomatic tool to avoid escalation: its “bamboo diplomacy”. This approach of careful neutrality is expected to continue under the nation’s new General Secretary To Lam, who used his first trip abroad since taking power in July to visit China and reinforce ties with Hanoi’s largest trading partner and the region’s dominant economic, military and political force.

Chinese President Xi Jinping shakes hands with Vietnam’s To Lam after a signing ceremony at the Great Hall of the People in Beijing on Monday. Photo: EPA-EFE

“The fact that you have come to China on your first visit … reflects the great importance you attach to relations between the two parties and countries,” Xi Jinping told his Vietnamese counterpart in Beijing, according to comments carried by Chinese state media on Monday – adding that he looked forward to establishing a “good working relationship and personal friendship” with Lam.

Bamboo, known for its ability to bend without breaking, lends its name to Vietnam’s diplomatic approach – reflecting the flexibility at the heart of the nation’s foreign policy.

Indeed, Lam’s diplomatic balancing act extends beyond China. Next month, he is scheduled to visit New York for the UN General Assembly, where he is expected to meet US President Joe Biden on the sidelines. This dual outreach – bolstering ties with both Beijing and Washington – exemplifies the deft manoeuvring that has kept Vietnam’s economy humming even as geopolitical tensions have risen around it.

“The reality is that bamboo diplomacy, with the country’s studious neutrality, has been very successful for it, so why would you change it?” said Zachary Abuza, a Southeast Asian security expert at the National War College in Washington. “I think you’re going to see very much what we’ve seen the past couple of years.”

Filipinos wave flags as a Vietnamese coastguard patrol ship makes a port call in Manila on August 5. Photo: EPA-EFE

Trials at sea

While careful diplomacy has served Vietnam well so far, competing claims in the South China Sea threaten to increasingly strain its crucial economic and political ties with Beijing, experts warn.

Tensions have flared in recent months, with Manila accusing China of attempting artificial island-building at Sabina Shoal, which lies about 140km (87 miles) off the Philippine island of Palawan.

In response, the Philippines dispatched its coastguard to the area, drawing the attention of Chinese patrol boats tasked with enforcing Beijing’s claims to the mostly underwater feature. This confrontation came to a head on Monday, when Chinese and Philippine coastguard ships collided near the shoal, sparking a new round of finger-pointing.

Vietnam, too, has antagonised China in recent weeks by submitting a request to the UN to expand its own claims to a continental shelf. However, analysts say this move was likely aimed more for domestic political consumption than as an overt challenge to Beijing.

Vietnam is required to be resolute in principle to protect sovereignty, while also requiring flexibility and ingenuity

Le Dang Doanh, retired government adviser

At the end of Lam’s recent three-day visit, China and Vietnam issued a joint declaration reaffirming their commitment to managing and resolving South China Sea disputes through “friendly consultations” – signalling that the loss of Vietnam’s former general secretary, the influential Nguyen Phu Trong who died last month, is not expected to dramatically alter Hanoi’s cautious approach.

“Vietnam is required to be resolute in principle to protect sovereignty, while also requiring flexibility and ingenuity in the negotiation process,” explained Le Dang Doanh, a retired senior economic adviser to five Vietnamese prime ministers.

In other words, Hanoi will continue to firmly assert its territorial claims, but do so through discrete diplomacy rather than confrontation.

This contrasts with the more assertive posture of the Philippines, noted the National War College’s Abuza.

“[Vietnam’s] strategy is largely based on condemning Chinese actions with very little in the means of raising the costs for China,” he said. “I think the Philippines understands that if no costs are imposed, why would China ever stop what they’re doing? And that’s just something the Vietnamese are not willing to do.”

Chinese land reclamation at Johnson South Reef in 2014. The area was the site of a skirmish in 1988 that left dozens of Vietnamese troops dead. Photo: Philippine Department of Foreign Affairs/Handout via AFP

Interests aligned?

At the heart of Vietnam’s complex maritime disputes with its northern neighbour are the Spratly and Paracel island chains, which alongside several oil and gas fields within the country’s internationally recognised exclusive economic zone, have been a constant source of tension.

While the Philippines also lays claim to parts of the Spratlys, Hanoi and Manila have generally struck a cooperative chord in countering China’s expansive territorial ambitions. However, the region carries real risks of confrontation – a 1988 skirmish at Johnson South Reef left dozens of Vietnamese troops dead and the maritime feature in Chinese hands.

China has also controlled the entirety of the Paracels since capturing them from the old South Vietnamese regime in 1974.

“Vietnam’s strategy is to make official protest when [China] violates its sovereignty and sovereign jurisdiction and to monitor China’s actions,” said Carl Thayer, an emeritus professor at the University of New South Wales and an expert on Vietnam – describing Hanoi’s policy towards maritime disputes as one of “cooperation and struggle”.

A Chinese coastguard vessel sails near a Chinese oil rig in disputed waters off Vietnam’s coast in 2014. Photo: AFP

In general, it refrains from escalating minor incidents, he said. Though Hanoi did become more assertive after 2014, when a major diplomatic row erupted over a Chinese oil rig moored off Vietnam’s central coast.

“Before then, Vietnam focused mostly on self-help efforts to modernise its navy and coastguard, while detaching the disputes from the overall bilateral relationship with Beijing to take advantage of close economic ties,” said Tran Bich, an adjunct fellow at the Centre for Strategic and International Studies in Washington.

The 2014 incident prompted Vietnam to seek out new security partners, intensifying maritime cooperation with the United States, Australia, India and Japan. It has also diversified its military imports, moving away from its historic reliance on Russia. However, Hanoi has still been treading lightly, scrapping offshore drilling projects with Spanish company Repsol and Russian state oil firm Rosneft in recent years following Chinese pressure.

The lifting of a US arms embargo in 2016 – a relic of the Vietnam war – has so far only resulted in a trickle of American military equipment, focused primarily on maritime assets for the country’s coastguard rather than major weapons systems.

Two women pass a board on a street in Hanoi featuring a map of Vietnam and the Vietnamese for ‘Spratly Islands’ in 2014. Photo: EPA-EFE

“Vietnam will continue to detach the South China Sea disputes from the overall relationship with China if [Hanoi’s ruling Communist Party] thinks the situation is manageable,” Bich said.

The two communist neighbours have managed to largely compartmentalise tensions, leveraging deep party-to-party ties that provide important communication channels to manage incidents at sea while prioritising their lucrative economic partnership.

“Party-to-party ties in the form of high-level exchanges, theoretical seminars, hot lines, and low-level exchanges are extremely important for the overall bilateral relationship,” Thayer said.

Trade between the two countries reached some US$171 billion last year – and as economic quarrels between China and the US have deepened, Vietnam has emerged as a new base for Chinese firms looking to bypass punitive American tariffs by shifting operations.

Workers inside a packaging factory in Ho Chi Minh City. An estimated 60 per cent of China’s lost trade with the US has been absorbed by Vietnam. Photo: AFP

Insiders estimate Vietnam has absorbed around 60 per cent of China’s lost trade with the US, much of it in the form of Chinese-manufactured goods.

China’s economic and military leverage over Vietnam is formidable, yet alienating Hanoi is not in Beijing’s best geopolitical interests – as the Vietnamese are keen to point out, said Doanh, the retired government adviser and a Communist Party member.

“I hope that the relationship between the two parties, along with Vietnam’s bamboo diplomacy, will help the two sides maintain tactical stability in the near future,” he said.

The future

As the US heads towards a pivotal November election that could see the return of the Donald Trump to the White House, experts say Vietnam is unlikely to risk escalating diplomatic tensions in the South China Sea. With trade and investment imperatives becoming increasingly paramount, Hanoi seems determined to maintain its cautious, conciliatory approach.

“Foreign policy has been set by the [Vietnamese Communist Party’s] Central Committee,” said Abuza of the National War College, emphasising Hanoi’s collective decision-making process. “It was never set by Nguyen Phu Trong … the reality is that he really didn’t care about foreign policy, he was domestically focused.”

Thayer said Lam, a former public security minister and long-standing member of the Central Committee, was expected to continue this well-established approach.

“Vietnam and China play a game of cat and mouse in the South China Sea but refrain from letting these encounters escalate,” Thayer said, adding that Hanoi purposefully deploys its coastguard rather than its navy to monitor Chinese activities – in contrast to the Philippines’ more confrontational stance.

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“The Philippines has an alliance treaty with the US to protect its sovereignty, so the Philippines has taken a very bold and determined attitude,” Doanh said.

Vietnam’s carefully calibrated response is driven in part by a desire to avoid antagonising China on multiple fronts. Beijing tends to avoid moving against more than one rival claimant at a time to dilute the prospects of a united approach to this festering territorial sore.

Yet Doanh admits he is concerned. “I am worried about the possibility of escalating tensions in the East Sea as well as the possibility of war in the long term,” he said, referring to the South China Sea by its Vietnamese name.

“As we know, when China has internal problems that need to be resolved, they use force to seek some victory from outside or reduce tensions inside.”

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