Background Briefing

South China Sea: China’s Oil
Rig and Political In-fighting in
Carlyle A. Thayer
July 16, 2014
[client name deleted]
We are preparing an assessment on the South China Sea dispute and seek your input
on how the political infighting inside the Vietnam Communist Party has prevented
Vietnam from taking legal action against China.
Q1 Infighting between pro-Chinese and pro-American fractions inside the Vietnam
Communist Party has constrained Vietnam from taking legal action against China
even before it moved the oil rig. Can you confirm this and how would you
substantiate your assessment?
ANSWER: Vietnam has been considering legal action against China for six years
according to Hanoi-based sources. As a result of the current oil rig crisis Vietnam
considered two separate approaches, one regarding sovereignty over the Paracels
and the other over the Spratlys. The fact that Vietnam did not initiate action against
China first nor support the Philippines are evidence that the legal option did not
secure a majority approval in the Politburo. It was also noticeable that Prime
Minister Nguyen Tan Dung spoke strongly in public about the legal action; he stated
that legal action would depend on timing. General Phung Quang Thanh said at the
Shangri-La Dialogue that the legal option was a last resort. State Counsellor Yang
Jiechi, during his recent visit, is reported to have warned Vietnam against taking legal
Q2. Now that China has moved the rig well ahead of its original mid-August deadline,
is it fair to say that the pro-Chinese faction has gained the upper hand? If, so why? If
not, why not?
ANSWER: China’s withdrawal of its oil rig will result in an immediate lowering of
tensions. China will also withdraw its armada of over one hundred ships and vessels.
This will set the stage for Vietnam to withdraw its Coast Guard and Fisheries
Surveillance Force ships. Thus the basis will be created for talks between China and
Vietnam to discuss how to get bilateral relations back on track. The so-called pro-
China camp, or accommodationists, will resist any actions that will exacerbate
relations with China. This means legal action and an upgrading of relations with the
United States are unlikely in the immediate future. Prime Minister Dung risks being
left out on a limb. A meeting of the party Central Committee is scheduled to review
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the pros and cons of taking legal action against China. This meeting will forward its
recommendations to the Politburo.
Q3. From the viewpoint of the pro-Chinese faction, what would be the ramifications
of getting too close to the United States? Also, from the viewpoint of the pro-
American fraction, how bad is it to continue to compromise with China, politically
and economically?
ANSWER: Getting too close to the US would result in negative pressures or even
sanctions by China. Getting too close to the US would entail some response on the
US requirement for demonstrable progress on human rights and US pressures for
greater military access to Vietnam, such as Cam Ranh Bay. Increase3d naval port
visits and joint military exercises.
The so-called pro-American faction would feel that accommodation with China
would constrain Vietnam’s freedom of action and put Vietnam into a position of
subordination and dependence on China. Ideological dependency would reduce the
prospects for economic reforms in Vietnam.
Q4. How would the removal of the oil rig affect the infighting between the two
factions? How could it end up?
ANSWER: The removal of the oil rig will result in reduced tensions and increase the
likelihood of high-level bilateral talks. This would favour those who want to
accommodate with China. Internal party in-fighting is likely to intensify over
disagreement over short term gains versus long term interests.
Q5. How would the pro-China vs pro-US dynamic shape the way Vietnam handles
future conflicts with China?
ANSWER: If Vietnam’s leadership continues to be divided along pro-China and pro-
American lines, it would mean that Vietnam would not be able to step up relations
with the United States in the defence and security sectors. Vietnam would proceed
cautiously and in fits and starts. As for future conflict with China, the
accommodationist group would self-censor itself. They would veto any policy likely
to arouse Chinese ire. They would in effect bandwagon with China, that is, avoid
criticism of China in the expectation that Vietnam would be rewarded economically
for its good behaviour. The problem is that sharing a common socialist ideology
would bind Vietnam hands and limit its ability to act in it national interest (loi ich dan
toc). In short, continued contestation between Vietnam’s pro-China and pro-US
factions would undermine Vietnam’s ability to pursue its national interests and stand
up to Chinese pressures.
Q6. Do you think the removal of the oil rig is connected to the passage of a
resolution by the US Senate last week critical of China and the telephone
conversation between Presidents Obama and Xi Jingping several days ago?
ANSWER: The removal of China’s oil rig was not directly related to the Senate
resolution and the phone conversation between President Obama and Xi because
decisions of this nature are not made on the spur of the moment. China had
probably decided to remove the oil rig because sufficient commercial data had been
gathered and nothing would be lost by concluding oil exploration activities early. No

doubt the impending Typhoon Rammasun impacted on the decision to withdraw
early. Finally, China also considered strategic policy. It moved to influence a
forthcoming pivotal meeting of the Central Committee of the Vietnam Communist
Party to decide on whether or not to take legal action against China and, possibly, to
seek closer relations with the United States.

Suggested citation: Carlyle A. Thayer, “South China Sea: China’s Oil Rig and Political
In-fighting in Hanoi,” Thayer Consultancy Background Brief, July 16, 2014. All
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