Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: Vietnam: Honouring the Martyrs of 1974 but not 1988 Carlyle A. Thayer March 27, 2013

[client name deleted] We request your assessment of how Vietnam controls expressions of patriotism. We would be interested in receiving your responses to the following questions: Q1. Why does the Vietnamese government encourage expressions of patriotism in some areas (the original settlers of the Paracels) and not others (the anniversary of the invasion of the Spratly islands)? ANSWER: Vietnams claim to the Paracels rests on its occupation and administration by the Republic of Vietnam (South Vietnam). When China occupied the Paracels in January 1974 it was the Provisional Revolutionary Government of the Republic of South Vietnam (PRG) that made a formal protest not the Democratic Republic of Vietnam (DRV - North Vietnam). The PRG was merged with the DRV in 1976 to form the Socialist Republic of Vietnam. Vietnam encourages expressions of patriotism over the Paracels because of this legal thread. Commemoration of those killed in 1974 also serves to promote unity between north and south Chinas March 1988 attack on Vietnamese vessels (invasion of the Spratly islands) was a defeat for the communist Vietnamese navy. Q2. Why did Vietnam complain about the shots fired at the fishing boat? ANSWER: Vietnam claims sovereignty over the Paracels and views any Chinese actions against Vietnamese fishermen as illegal. Vietnamese reports have been vague. It now appears a Chinese navy ship fired flares that set the Vietnamese fishing boat on fire. China denies this. Vietnam must protest each and every violation of its claim to sovereignty lest silence be taken as acquiescence. Firing flares is less provocative than firing live rounds unless, as it appears, the flares were directed at the Vietnamese fishing boat. This was an unnecessary and dangerous act. Leaving aside the sovereignty question, Chinas actions were disproportional to the offense. Chinese sailors could have used a loud hailer to order the Vietnamese fishing boat away. Q3. Why is China denying damage was done to the boat? ANSWER: China always responds by denying any accusation against it. At the same time China makes claim to the effect its vessels were engaged in routine enforcement of Chinas jurisdiction. China engages in obfuscation in order to lessen

2 perceptions that is it behaving in a coercive manner. Also, to admit damage would open the ground for Vietnam to claim compensation. Q4. In the last year local media appear to have been carrying more stories with anti- China sentiment, is this because the government is encouraging such coverage? ANSWER: The government and the party are well aware of significant anti-Chinese sentiment in Vietnam. Anti-China sentiment is a two-edged sword. It can harm relations with China and it can undermine the governments legitimacy. Permitting the press a greater degree of freedom is akin to letting steam out of a pressure cooker. I do not think the government is encouraging anti-China sentiment as this would have serious repercussions on relations with China. The government permits a degree of criticism to lower the pressure on it to act. Suggested citation: Carlyle A. Thayer, Vietnam: Honouring the Martyrs of 1974 but not 1988, Thayer Consultancy Background Brief, March, 27 2013. Thayer Consultancy Background Briefs are archived at Scribd.com

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea Flares Up Carlyle A. Thayer March 27, 2013

[client name deleted] With reference to the following media report:

Vietnam accuses China over South China Sea 'trawler attack' Associated Press, The Guardian, March 26, 2013 Hanoi demands damages after claiming Chinese vessel fired on fishing boat near disputed Paracel islands PHOTO Fishermen park their boats on the South China Sea. Photograph: AFP/Getty Vietnam has accused a Chinese vessel of firing on a Vietnamese fishing boat in the disputed South China Sea and setting its cabin alight, reigniting tensions in the region over competing claims to the gas-rich waters. The government described the incident last Wednesday as [20 March] "very serious" and lodged a formal complaint with the Chinese embassy in the capital, Hanoi. The fishing boat was near the Paracel islands when it was chased and shot at by an unidentified Chinese vessel, the government statement said on Monday. It demanded China punish those responsible and pay reparations to the fishermen whose boat was damaged. The government did not say if anyone was injured. The Chinese foreign ministry said it had no immediate response to the accusation. There have been other clashes in the waters, often related to claims of illegal fishing or violations of China's unilaterally imposed fishing moratoriums. Vietnam and China each claim large parts of the South China Sea; the Philippines, Malaysia, Taiwan and Brunei claim other parts. The countries have been in dispute for years, but the profile of the issue has been raised in recent years because of China's economic and military growth and subsequent American interest. The Paracels, which were occupied by China shortly before the end of the Vietnam war in 1975, is a particular flashpoint. China incorporated the Paracels and most of its other South China Sea claims within the newly declared Sansha city-level administrative unit last year as way of raising the region's profile and increasing funds for infrastructure and economic development. The country is also boosting its civilian fisheries and maritime surveillance patrols in the area. China's navy conducts missions in the South China Sea, although it has sought to keep military units out of the disputed zones to avoid elevating tensions.

We request your assessment of the following issues:

4 Q1. What's your observation of this incident? China and Vietnam seemed to have reduced tensions last year. Why has this incident suddenly occurred? ANSWER: As a consequence of Chinas raising the status of Sansha city to a prefecture and establishing a military garrison, the Peoples Liberation Army Navy (PLAN) has been given enhanced responsibility to enforce Chinas jurisdiction around the Paracel Islands. Vietnam can expect more incidents involving its fishermen as the weather improves. In May China will once again impose its unilateral fishing ban. China will step up patrols. It is rare for the PLAN to be directly involved in fishing incidents. The firing of the flares directly at a Vietnamese fishing boat is an irresponsible and dangerous act. But it is better than firing live rounds. At the moment it is best to view this incident as an isolated one. If more PLAN ships become involved in enforcing Chinese jurisdiction against fishermen using similar tactics it will be a sign of the enhanced role of the military in policy-making towards the South China Sea. Q2. What are Chinas movites behind this new incident? Is this because of the new leadership transition or the new arms deals with Russia? Does China want to test Vietnam's reactions or is it a test for the US? Secretary John Kerry will soon undertake his first Asia trip in two weeks' time to the region and visit Japan and probably Vietnam as one of the destinations? Or any other possible causes? ANSWER: I would caution against finding larger causes for what I believe should be taken as an isolated incident. It is more likely that Chinese naval captains have been given wide latitude in their operations and can operate with impunity against Vietnamese or Filipino fishermen without fear of punishment. I doubt that firing flares at a Vietnamese fishing craft was designed to test Vietnams reactions. The Vietnamese government responded appropriately by lodging a formal protest. The new leadership is now only beginning to unify Chinas many of civilian enforcement agencies. It will take some time to co-ordinate their activities. I do not see this incident related to Russian arms sales to China. But it is likely China will show stronger determination in dealing with Secretary Kerry on maritime issues. But the dispute with China and Japan has higher priority. If China steps up aggressive actions in the South China Sea it will be counter-productive. In my view the cause of this incident is a result of Chinese arrogance in asserting their claims to sovereignty in the South China Sea and giving their local authorities to much leeway in dealing with encounters with foreign craft. China puts itself above international law by engaging in dangerous and unsafe practices. Q3. Should Vietnam modify its current policies in response to Chinas stepped up harassment of its fishermen? ANSWER: Vietnamese fishermen will always face harassment from Chinese authorities whether civilian or military because of the stance that the Chinese government has taken. If China really wanted to promote its peaceful rise and turn the South China Sea into a region of peace, cooperation and development, it would negotiate a fishing agreement with Vietnam that permitted regulated fishing in disputed waters. Already the fisheries are being depleted due to overfishing and

5 environmental pollution. Chinese fishermen are going further south to catch fish. Rather than act unilaterally, China should be seeking win-win solutions such as cooperating with other littoral states in effective fisheries management. Suggested citation: Carlyle A. Thayer, South China Sea Flares Up, Thayer Consultancy Background Brief, March 27, 2013. Thayer Consultancy Background Briefs are archived at Scribd.com

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Chinese Navy Sails South Carlyle A. Thayer March 27, 2013

[client name deleted] As has just been reported, China has recently instigated a new incident in the South China Sea. We request your assessment of the following issues: 1) What are your comments on Chinas recent actions in the South China Sea, such as conducting military drills, sending ships to disputed areas, shooting at a Vietnamese fishing ship? ANSWER: China actions are a continuation of its long-term plan to assert sovereignty and naval control over the South China Sea. China is continually upgrading its naval base on Hainan Island. It has created a military garrison on Woody Island in the Paracels. The central authorities have confirmed the authority of Sansha City to exert jurisdiction in its Exclusive Economic Zone. These actions have given the Peoples Liberation Army Navy a greater role in safeguarding Chinas sovereignty in the South China Sea. Each of the recent incidents demonstrate that China has the naval power and the ability to reach out and enforce sovereignty anywhere in the South China Sea enclosed by its nine-dash line map. 2) What do you think about Chinas acceleration of its plan to control the South China Sea? ANSWER: The rise of the Chinese Navy and its civilian enforcement fleet is a trend that will continue. More and more Chinese ships will be deployed to the South Sea Fleet and sail into the South China Sea. China will take advantage of small opportunities to advance its claims. For example, when China learned that Filipino boats had to leave Scarborough Shoal, China promptly erected a barrier once they departed so they could not return. China has virtually annexed Scarborough Shoal by stationing its boats there on a permanent basis. In this way the Philippines has lost sovereignty over the shoal and its waters. 3) Are there any links between the above-mentioned actions and Chinas new leadership? ANSWER: Xi Jinping has been a party to all important decisions on the South China Sea even before he became party leader and state president. Recent incidents indicate that the Peoples Liberation Army is taking a more proactive role in asserting Chinas sovereignty. It is my assessment that the central leadership sets broad policy and that commanders on spot exercise their discretion. For example, high-level leaders would have approved the squadron that sailed to James Shoal near Malaysia

7 and it is likely that a local commander ordered his ship to fire flares at a Vietnamese fishing boat. 4) What further actions will China undertake in the South China Sea? ANSWER: China is putting behind-the-scenes pressure on ASEAN members to get them to lobby the Philippines to drop its claim for a UN Arbitral Tribunal in exchange for a resumption of negotiations on the Code of Conduct. As the weather improves, and the May-August period approaches when China imposes its unilateral fishing ban, the Chinese navy and its civilian enforcement vessels will become more proactive in asserting Chinese sovereignty. Their actions will be carefully calibrated to fall short of armed attack but strong enough to intimidate. As long as the Philippines pursues its UN claim, China will take steps to consolidate its presence in the South China Sea. If the Chairman of the International Tribunal for the Law of the Sea sets up an Arbitral Tribunal, China will apply continual pressure during its deliberations. The Philippines estimates it will take three to four years for a decision to be reached. During this time China will entrench itself further. Chinas demonstration of resolve is to test the new US Secretaries of State and Defense as well as the second Obama Administration. China will try to pressure the U.S. to cooperate on broad strategic interests in return for a less active U.S. military role in rebalancing towards the Asia-Pacific. 5) How are international scholars commenting on Chinas recent provocative actions? What do they say about the Philippines lawsuit against China? ANSWER: It is too early to make a thorough assessment. But it is clear that international scholars are most concerned about the Chinese naval squadron that sailed to James Shoal. This squadron comprised a large landing ship and modern destroyers. International scholars note that the squadron sailed close to Malaysia and Brunei and risked raising concerns in these states. International scholars are divided on the merits of the Philippines legal action against China. There are reports that the Singapore government is discouraging comments by legal specialists there. Most international scholars note that the Philippines action was unilateral and was not undertaken in consultation with ASEAN. These scholars are concerned about the negative impact on ASEAN unity and negotiations on a Code of Conduct. Other scholars note that the Philippines actions came after the failure of China to withdraw from Scarborough Shoal and negotiations between Manila and Beijing failed to yield positive results. These scholars note that the Philippines has been openly considering taking its case to the UN for several years and recourse to the UN was included among the key principles adopted by ASEAN foreign ministers in July last year. Suggested citation: Carlyle A. Thayer, South China Sea: Chinese Navy Sails South, Thayer Consultancy Background Brief, March 27, 2013. Thayer Consultancy Background Briefs are archived at Scribd.com

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: China-Russia Entente? Carlyle A. Thayer March 27, 2013

[client name deleted] Q1. We request your assessment of this latest development: http://www.thanhniennews.com/index/pages/20130324-vietnamese-fishing-boat- fired-by-chinese-in-national-waters.aspx ANSWER: It has now been clarified that it was a Chinese navy ship that fired flares at a Vietnamese fishing boat. This action was dangerous and a disproportionate response to the Vietnamese fishing boat. As long as the waters around the Paracel Islands remain in dispute China should treat Vietnamese fishermen humanely. The Vietnamese government was correct to issue a formal protest. This particular incident is worrying because it involved a naval ship. This is likely the consequence of establishing a military garrison in Sansha city and Hainans new regulations concerning illegal activities in its Exclusive Economic Zone. Q2. Also, Russia and China have clinched a new deal in which the former will sell 24 Su-24 jet fighters and four submarines to the latter. Russia's top weapons buyers also include Soviet-era clients and regional Asian heavyweight India, as well as Vietnam and other Southeast Asian nations wary of China's growing military might. Russia's strategy on weapon sales has pointed to the obvious: In realpolitik, there is neither permanent friend nor foe, only permanent interests. What is your assessment? ANSWER: Russia needs to promote arms sales. It gains from selling to both China and Vietnam. The lessons for Vietnam are that it cannot compete with China in an arms race. Second, Vietnam must make sure it maximizes its defence self-reliance and not become too dependent on Russia. In a time of crisis or conflict Russia can either supply more weapons and spare parts or it can refuse to do so. Vietnam must ensure that it has adequate stocks and sources of military equipment to defend itself. Q3. China National Offshore Oil Corporation (CNOOC) last June issued a tender inviting foreign companies to jointly develop nine blocks in the western part of the South China Sea. Vietnam has dismissed this move as illegal because the blocks lie within its 200-nautical mile exclusive economic zone and continental shelf in accordance with the 1982 United Nations Convention on the Law of the Sea.

9 Should Vietnam be legitimately concerned that Russian gas giant Gazprom might make a U-turn in its commitment to working with its Vietnamese counterpart in offshore areas wherw China is looking to open nine oil and gas lots for development to international bidders? If Gazprom does change its mind for its own benefit, what are the implications for the South China Sea dispute? ANSWER: Russia appears on the verge of opening a land pipeline to China to sell it gas. This provides a powerful means to influence China if it takes action against Gazproms interests in the South China Sea. Russian oil companies, like Gazprom, are looking to make a profit. At the moment Russias joint ventures with Vietnam are doing well and are expanding to joint development in Russia. Russia will make its decisions on oil and gas exploration with Vietnam on a profit and loss basis. Russian firms must also assess the risk. Russia would resist any Chinese interference in its commercial activities with third countries. Relations between Moscow and Beijing are going well and China is unlikely to take any action that would damage these relations. Also, since Russia sells weapons to China it has a means of leverage against China. Nevertheless, Gazprom and other Russian oil companies will act cautiously and try to have the best of both worlds continued arms sales and joint hydrocarbon development with China and Vietnam. Suggested citation: Carlyle A. Thayer, South China Sea: China-Russia Entente?, Thayer Consultancy Background Brief, March 27, 2013. Thayer Consultancy Background Briefs are archived at Scribd.com