Vietnam blinks again as China tightens grip

China’s growing military presence in the South China Sea is intimidating Vietnam and other claimants

Vietnam is increasingly opting for discretion over valour as it confronts the reality of China’s growing power in the South China Sea.

President Trump’s lack of focus on the maritime disputes during his visit to the region gave little reassurance to allies and partners that feel menaced by China’s ambitions.

Vietnam, acknowledging the new reality, appears to have backed off from a major gas project in disputed waters that was sure to infuriate Beijing.

Hanoi had indicated in the summer that it was prepared to give Exxon Mobil the go-ahead in November to begin work on the “Blue Whale” project off Danang.

In the event, the US energy giant said the decision was being postponed for another two years.

Isolated and vulnerable

It’s no surprise that President Xi Jinping was all smiles and bonhomie during the APEC summit in Danang and his later visit to Hanoi.

With President Trump utterly preoccupied with trade and North Korea, President Xi has seized the initiative in the South China Sea and left rival claimants feeling isolated and vulnerable.

Vietnam, which backed down in the summer after a reported military threat from China over another gas project further south, appears to be losing heart.

Analysts say the entire future of Vietnam’s offshore oil and gas industry in the South China Sea could be in question as China builds up its military position.

The situation is acutely sensitive politically for the communist leadership in Hanoi which is always vulnerable to accusations of selling out the national interest to the comrades in Beijing.

Safety in jeopardy

The Blue Whale project involves a multi-billion dollar gas field designed to supply clean fuel to new power plants central Vietnam.

The planned drilling operation falls well within Vietnam’s 200 nautical mile Exclusive Economic Zone. However, some of the gas in the field will be drained from an area that also falls within China’s hotly contested “9-dash line”, through which China claims “historic rights” to much of the South China Sea.

China has warned foreign oil companies that their workers’ safety could be in jeopardy if they work in areas it considers to be under dispute.

Beijing has moved quietly but relentlessly to strengthen its military position, seeking to convince Vietnam, the Philippines and other claimants, that resistance is useless.

China is continuing to expand military bases on three reclaimed islands in the Spratly chain, building radar installations, shelters for missile batteries and giant warehouses for supplies and ammunition.

China’s next step is expected to be the deployment of military aircraft in the Spratlys and on another base in the Paracels, which are also claimed by Vietnam.

By changing the strategic position on the ground, China is gaining the advantage in a way that none of the Southeast Asian countries can match.

The absence of a clear policy from the United States and any commitment to contain China’s ambitions has cleared the way for President Xi to stamp his authority on the region.