China’s Deployment of Oil Rig is Not a Strategic Mistake

China had good strategic reasons for placing an oil rig off the coast of Vietnam in the South China Sea.

China’s Deployment of Oil Rig is Not a Strategic Mistake
Credit: Google Maps

After China placed an oil rig in disputed waters between China and Vietnam, China-Vietnam relations have hit a mini crisis. Some analysts claim that China made a strategic mistake (here and here) in deploying the 981 oil rig in disputed waters. Although one can debate the timing and method of China’s deployment, it is inaccurate to describe China’s action as a major strategic mistake.

Let us look at the timing issue first. The timing of China’s deployment of oil rig 981 is puzzling to many, mainly because in recent years China and Vietnam have maintained a relatively good relationship. Chinese Premier Li Keqiang visited Vietnam in 2013 and the two sides agreed to further enhance cooperation in several issue areas. On the other hand, China’s decision to deploy the 981 oil rig shouldn’t be a surprise or a puzzle. After all, China has spent many years and tons of money to develop an oil rig that can operate in deep sea. It should be clear to outsiders that someday China will deploy it near deep sea areas, which will certainly be contested by other countries. According to Holly Morrow, there is never a good time for doing it. In her words, “The reality is these types of rigs take a long time to deploy, take a lot of planning, and there’s a window of time in the South China Sea when there are no typhoons. I think all of the stars aligned for the Chinese to do this now, and the fact that it was sandwiched between Obama’s Asia visit and the ASEAN Summit, I think that was probably more an unlucky coincidence rather than what they were intending.” Thus, the timing question is interesting; but that not important.

Nonetheless, there are at least two other reasons why China could have made a mistake in this incident. First, one could argue that China’s international image was hurt by this incident, thereby losing a chance to win the hearts and minds of Vietnamese people. Small countries in Southeast Asia might view China as a big bully in the South China Sea; and this would hurt China’s goal to promote regional stability and peace, which was a central goal laid out by President Xi Jinping in a major work conference on regional diplomacy in 2013. Some scholars within China share this view, believing that it is unwise to have quarrels with three countries at the same time, i.e., Japan, The Philippines, and Vietnam. Such worries are legitimate as China’s international image will certainly suffer a bit because of this incident. Nonetheless, like any other country, when forced to choose between core national interests and international image, China would choose the former. Probably realizing that China could not have the cake and eat it too, it puts national interests in front of its image. In this sense, the damage is real but not that big.

Second, one could argue that China’s current move will further push Vietnam into the arms of the U.S., thereby possibly creating an anti-China coalition in East Asia including Japan, the Philippines, and maybe others. This is a real possibility. Vietnam, however, might not want to become an ally to the U.S. in opposing China because it would still need China’s market and investment to develop. China is Vietnam’s biggest trading partner in 2013, with imports from China accounting for 28 percent of all imports. A rational Vietnam would not want to jeopardize this important trading relationship. Moreover, the ongoing anti-Chinese riots and the destruction and looting of Chinese firms and other countries’ firms (such as South Korean) would only hurt Vietnam’s business image internationally. This would be bad for Vietnam when its big projects desperately need foreign capital, with Chinese foreign direct investment increasing sharply in 2013.

Moreover, Vietnam is still a socialist regime dominated by the Communist party with strong suspicions of the U.S. Many in Vietnam are suspicious about U.S. goals in Vietnam, believing that the U.S. still aims to overthrow the Communist regime through some kind of color revolution. The constant criticisms on Vietnam’s human rights record by the U.S. only makes things worse for the bilateral relationship. Thus, so long as the Vietnamese Communist Party remains in power, there will not be a fundamental change in the political relationship between Vietnam and the United States. The VCP might lose face in confrontations with China; but it will lose life if getting too close to the United States.

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One more reason why China would not suffer a lot is because Vietnam’s options are limited. There is the domestic instability issue. In contrast to some analysis, Vietnam’s anti-China riots do not so much worry China; what these riots really do scare is the Vietnamese government. This is not surprising because usually anti-foreign nationalist protests would target their national government for being too soft. This is why the Vietnamese government has arrested thousands of protestors in the last few days.

In short, China might not have gained a lot from the deployment of an oil rig in disputed waters, but it is certainly not a strategic mistake. Currently Vietnam does not have too many cards to play against China’s move. But China should make efforts to stabilize Sino-Vietnamese relations as it will not be good for China to force Vietnam into a corner.