As tensions rise over competing territorial claims and potential energy resources in the South China Sea, littoral countries such as Vietnam and the Philippines are working to secure their strategic interests against the threat of Chinese naval expansion and encroachment. The South China Sea is Vietnam's economic lifeline, with Hanoi estimating that maritime activity accounts for more than half of the country's gross domestic product (GDP). For Vietnam, the demands of a growing economy will only increase the sea's importance and raise the risk and frequency of conflict with China.
The Importance of the South China Sea
After the end of France's occupation of North Vietnam in 1945, the border with China — early Vietnam's first strategic concern — gradually ceased to be a pressing issue. In the modern era, the sea more than the land determined Vietnam's strategy — namely maintaining a unified, sovereign nation. Vietnam is thin, with distinct population clusters centered on the Red and Mekong rivers at either end. Uniting these clusters under one flag requires securing the middle trunk that connects them — Vietnam's geographic weak point. To the west, Laos provides an inland buffer for the trunk, while the long coast to the east is largely open, loosely bracketed only by two sets of islands, the Paracels and the Spratlys.
Vietnam has had maritime involvement with these islands since at least 1974, when South Vietnamese forces attacked a Chinese fleet in the Paracel Islands. Fearing that Chinese control of the Paracels would both substantiate Beijing's wider territorial claims in the South China Sea and better position the Chinese navy to invade Vietnam at its weak center, South Vietnam made a pre-emptive strike. It lost, and Saigon fell within a year. But its position was soon adopted by North Vietnam, which aggressively captured the majority of the islets in the Spratly chain as a counter to China's success in the Paracels.
The importance of the islands in substantiating territorial claims is compounded by the possible presence of underwater energy resources. While far-offshore exploration in disputed waters has so far been limited by political disputes, most countries in the South China Sea region already rely heavily on near-shore oil reserves for revenue, Vietnam included. Currently, crude oil is Vietnam's single-most important export (worth roughly $5 billion in 2010) and pays for virtually all of Vietnam's refined oil imports. The centrality of crude exports from the South China Sea is augmented by the growing importance of offshore fisheries, especially after Hanoi's push in the late-1990s to limit inland fishing. In 2010, Vietnam exported roughly $3.6 billion worth of seafood, more than half of which was shrimp from the South China Sea; altogether, the fishing industry employs between 4 million and 5 million people.
Needs and Constraints
Vietnam has long been one of the most vocal opponents of Chinese territorial claims in the South China Sea as well as the most capable and willing to risk open confrontation over those claims. History helps explain Vietnam's modern-day boldness. But Hanoi's increasingly visible and multilateral moves also reflect a pressing need to develop new energy sources and to protect its fisheries.
The Bach Ho offshore oil and natural gas field in Cuu Long Bay has been Vietnam's primary source of hydrocarbons since its discovery in 1975. But the field is now entering terminal decline, and unless Vietnam is able to explore further afield in the South China Sea, it will become a net oil importer in three years. Vietnamese companies are surveying deeper into the sea, but any efforts to comprehensively explore it have been severely curtailed by Chinese naval activity in the region.
This is a serious concern for Hanoi. Terminal depletion of oil resources will put significant constraints on the government's ability to maintain high growth rates. And as a non-elected Communist Party, the Vietnamese government — like the Chinese — has relied in large part on the promise of economic prosperity for its political legitimacy. Therefore, energy resources (and, as Vietnam's refining capacity grows, the prospect of genuine energy independence) are essential for revenue and political stability.
While not comparably critical to national security, the fishing industry plays an important role in disputes. The fluidity of fishing zones and mobility of boats repeatedly put the industry at the heart of territorial disputes and in doing so serve as a testing ground for countries' competing claims.
On both fronts — energy and fishing — the Chinese have been a constant obstacle to Vietnam securing its interest. Tensions with China have been a constant in Vietnamese maritime life, but since early 2011 the cycles of rising and subsiding confrontation have tightened and grown more extreme.
Vietnam is one the most militarily capable and economically and politically invested opponents of China's growing involvement in the South China Sea. But its ability to actually engage the Chinese in naval combat (especially if protracted) is severely hampered by limited finances and a comparatively smaller and less capable force than China's South Sea Fleet.
Though growing fast, the Vietnamese economy is still the size of a small, poor Chinese province. Veitnam's GDP ($122 billion in 2011) is less than that of Chongqing municipality in southwest China, and less than half of that of Beijing or Shanghai — even though its population roughly equals that of all three combined. Given that defining and defending its claims in the maritime sphere will become increasingly important to Vietnam's domestic political and economic imperatives, and also that Vietnam alone is incapable of doing so in the case of a protracted confrontation, Hanoi must work to build external alliances that provide a virtual buffer against the Chinese.
Chief among these are deepening political and military and defense ties to the United States. During U.S. Defense Secretary Leon Panetta's visit to Vietnam on June 3, Vietnamese Defense Minister Gen. Phuong Quang Thanh called on the United States to lift a ban on lethal weapons sales to the country so it could modernize and overhaul its military. These are just some of the security benefits that Vietnam sees from a closer relationship with the United States, and luckily for Vietnam the United States is increasingly willing to engage it. The United States not only sees Vietnam as a key partner in the Asia-Pacific region but also has expressed deep interest in securing U.S. naval ship access into Cam Ranh Bay, a strategically located deep-water port.
While Hanoi views an enhanced U.S. presence in the region as an important check on Chinese aggression in the South China Sea, it will nonetheless work to limit U.S. influence over its own foreign policy by building and maintaining strong defense ties with other countries — namely Russia, India and the Association of Southeast Asian Nations member states. Overlapping relationships with larger, more influential powers provide a multilayered buffer against China, allowing Vietnam to play a more active role in shaping the region's political dynamic. Whether or not any of Vietnam's individual partners is actively concerned with containing China does not matter; Hanoi's goal is to be at the center of intersecting global interests in the sea. Doing so allows Vietnam to play a far larger role than if it were to act alone.
The Vietnamese have long had a strong defense relationship with the Russians; most of Vietnam's modern military equipment comes from Moscow. (This includes anti-ship cruise missiles, Su-30MK2V multirole fighters and six Improved Kilo class submarines ordered in 2009 and scheduled for delivery next year.) Meanwhile, the Vietnamese have also enhanced their relationship with the Indian military, conducting numerous joint naval and jungle warfare exercises. As recently as September 2011, the Indians reportedly agreed to help train the Vietnamese in submarine operations and underwater operations. Given that the Vietnamese have no prior experience with underwater warfare — aside from a couple of midget submarines — Indian help would significantly enhance Vietnam's ability to operate its new Improved Kilos in the South China Sea.
While Vietnam will benefit from leveraging its military relations with a number of countries in case of conflict with the Chinese military, it remains constrained by its limited economic ability and the hesitation of foreign countries to get too involved in a serious dispute with China.