Learning From China’s Oil Rig Standoff With Vietnam

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On May 2, China unilaterally placed an oil-drilling rig in waters 120 miles from Vietnam’s coast – near islands claimed by both countries and well within Hanoi’s 200-mile exclusive economic zone set by international law. From the outset, approximately thirty Vietnamese vessels tried to intervene, but were repelled by the eighty plus Chinese ships protecting the rig. Although the platform was scheduled to maintain its position until August 15, China withdrew it on July 16.

China’s overreach was costly, among other things it accelerated a developing arms race in Asia and amplified calls for Washington and Tokyo to counter Beijing. Still, China acquired useful information to hone its ongoing strategy in the South China Sea. Understanding why Beijing took this action and its attendant lessons will help Washington and its partners deal with China.

Beijing seeks primacy in Asia, so it must displace Washington. Because China is too weak to directly confront the U.S., it tries to gradually chip away at the regional status quo through low-level provocations against its neighbors. Individually, these actions do not justify China’s weaker targets waging war against it or serious U.S. intervention; added together, they may eventually tilt Asia’s balance in China’s favor. By repeatedly confronting its regional competitors, Beijing showcases its military superiority and forces Washington to make a difficult choice: (1) Assist those countries whenever China tries a provocation, which cedes control to China and risks escalation with a nuclear-power and important trade partner; or (2) Remain uninvolved, which legitimizes China’s claims to disputed areas as it fortifies its presence therein and diminishes its rivals’ desire to ally with the U.S. by undermining U.S. security guarantees. But if Beijing pushes too hard, it risks drawing in Washington and creating a balancing bloc. China therefore calibrates aggression and restraint to try to apply the maximum level of force consistent with this approach.

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China’s rig deployment was an attempted use of this strategy because it was testing its limits given conflicting evidence about U.S. resolve. On one hand, less than six months before the standoff began, the U.S. had promised maritime aid to Vietnam. And the month before Beijing’s move, U.S. President Barack Obama declared while in Asia that islands claimed by China and Japan are covered by Washington’s defense treaty with Tokyo, called U.S. military support for the Philippines “ironclad” (without clearly explaining whether that support extended to islands claimed by Beijing and Manila), and welcomed new access to Filipino military bases. On the other hand, China had witnessed timid U.S. responses to illegal power grabs, including, in March 2014 alone, Russia annexing Crimea and China blocking America’s ally the Philippines from re-supplying a ship that it had maintained in contested waters for fifteen years.

The lesson for the U.S.? China does not fear pushing the envelope when it is uncertain of the U.S. response. Washington must therefore clearly define its security positions and regularly meet Beijing’s provocations with tough responses. Convincing China in advance that its incursions have real costs will deter it from forcibly challenging the status quo.

China targeting Vietnam rather than its other primary maritime rivals Japan and the Philippines was also an attempted strategic choice. First, the U.S. and Vietnam have no defense treaty, so Washington felt less pressure to intervene on Hanoi’s behalf than it would have faced had Beijing confronted Manila or Tokyo. Second, China has closer relations and stronger communication with Vietnam than it does with Japan and the Philippines. Beijing could therefore more easily de-escalate a conflict with Hanoi. Third, because Vietnam is far weaker than Japan, China gauged a moderate rival’s capabilities and resolve without pitting itself against a near military equal closely allied with the U.S.

There is another lesson for the U.S. here. Washington must deepen its military, economic, and diplomatic ties with China’s neighbors, encourage their multilateral cooperation against Beijing’s aggression, and urge China and these countries to expand their communication channels (South Korea and China agreed last month to open a military hotline and Japan renewed such a request with China in May). The stronger these countries are and the closer they are to the U.S. and each other, the less likely China is to challenge them. Even so, Beijing will confront powerful countries and U.S. allies, as evidenced by it forcibly pressing its territorial claims against Tokyo and Manila. But China’s row with Vietnam was its most intense maritime push in recent history. For instance, as the standoff intensified, China secured its rig with fighter jets and more than 100 ships, including naval vessels (in contrast to the smaller number of civilian maritime forces it usually deploys). It repeatedly rammed Vietnamese boats and sank one (it usually intimidates its targets by deploying a greater number of ships and firing water cannons at them). Although the U.S. and its partners will have trouble preventing China from continuing its normal low-level provocations, this episode approached a medium-level provocation with a greater risk of escalation. Deeper U.S. involvement and the prospect of multilateral responses in Asia can more easily avert such conflicts, and better communication will help to control them if they break out.

Beijing also learned from this episode.

First, China has greater certainty that the U.S. loathes intervening in conflicts. After China threatened freedom of navigation and the rule of law by parking for seventy-five days a growing armada and a forty-story rig in Vietnam’s protected waters, sank a Vietnamese ship, and sent a second rig near the area, the U.S. did little more than call China’s actions “provocative.” Washington refused to mediate the dispute, imposed no sanctions, deployed no naval assets to the disputed waters, and did not end its ban on the sale of lethal weapons to Hanoi. U.S. detachment spurs China, as shown by how it steadily escalated the rig standoff.

Second, China sees that while Asian opposition to its rise is growing, no steadfast consensus to that end exists. At its meeting shortly after China’s rig deployment, the Association of Southeast Asian Nations failed to identify China as the aggressor. Thus, even a bullying Beijing maintains sufficient influence to cow its weaker and trade-dependent neighbors into submission. And while Hanoi is drawing closer to Washington, it limits that relationship to balance its ties to Beijing – its largest trade partner and more powerful neighbor with whom it shares a border. A Vietnamese military official stated during the standoff that “[w]e’re talking to U.S. but it is too early to say how the tensions now will change our approach.” Indeed, since that time, Vietnam continues to restrict the U.S. Navy to a single annual port call, to bar active U.S. naval vessels from entering Cam Ranh Bay (Hanoi’s premier deep-water port), and to deny Washington access to its military facilities (talks began as early as 2012).

China is using these lessons to sharpen its strategy for dominating Asia.

First, Beijing will strategically (and temporarily) de-escalate when beneficial, such as to muffle calls to contain it. China did so in this dispute by removing the rig early and simultaneously releasing Vietnamese fishermen it had captured during the row. By that time, China had already achieved its primary goals of broadcasting to its neighbors that a rising Vietnam alone could not stop it and the U.S. would not intervene. Keeping the rig in place thereafter offered only diminishing marginal returns, but would have further cemented China’s appearance as a bully and weakened Vietnam’s pro-China faction.

Second, China will try to deepen its neighbors’ economic dependence on it to dampen their willingness to oppose it. For instance, China is negotiating free trade agreements with Australia, Japan (whose trade with China is already projected to increase for the first time since 2011), South Korea and Taiwan. And it is developing the Asian Infrastructure Investment Bank as an alternative to the World Bank, in which the U.S. and Japan have the strongest voting rights. Beijing will thus be better positioned to exploit daylight between its neighbors by dividing and conquering them through a mix of coercive and supportive security and economic measures.

China’s rig withdrawal signifies that Beijing is re-calibrating, not ceasing, its tactics to find the appropriate pressure level. Indeed, shortly after ending this episode, Beijing sent two maritime survey vessels inside Manila’s potentially resource-rich exclusive economic zone, ordered more oil rigs and coast guard vessels for use in the South China Sea, and announced plans to build lighthouses on islands to elevate its claim to them over Hanoi’s. The U.S. and its partners must leverage the lessons available from the rig standoff if they hope to stop – or even slow – China’s provocations.

Paul J. Leaf worked for the Chicago Council on Global Affairs. He is a regular commentator on foreign policy and an attorney at an international law firm.

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