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Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

South China Sea: Will Vanguard
Bank Ignite Vietnamese
Carlyle A. Thayer
August 4, 2019

We are writing a report on Vietnam and the South China Sea. We request your
assessment of the following issues:
Q1. Why do you think Vietnam stood up to Chinese aggression this time around,
compared to 2017 and 2018 when it backed down?
ANSWER: It is unclear if “stood up to Chinese aggression” best characterizes Vietnam’s
response to events at Vanguard Bank. The Vietnam Coast Guard on station at
Vanguard Bank appear to have been ordered to stand their ground while Vietnam
made numerous diplomatic protests to China.
In July 2017, a senior Chinese general visiting Hanoi demanded Vietnam stop oil
exploration in Vanguard Bank. When he received a verbal pushback by Vietnam’s
prime minister, he abruptly left Hanoi and terminated China’s participation in the
annual bilateral “friendly border exchange activities.” China also reportedly
threatened force. Vietnam complied and ceased operations. In March 2018, after
China exerted more political-diplomatic pressure, Vietnam suspended operations at
nearby Red Emperor block.
This year Vietnam appears to have learned from experience. According to a
backgrounder prepared by Vietnam’s Ministry of Foreign Affairs (MOFA), Vietnam
utilised four separate channels – diplomatic, security, defense services and the Central
Party Commission for External Relations – to lodge dozens of protests to the Chinese
Embassy in Hanoi, China’s Foreign Ministry in Beijing and “other relevant authorities.”
Vietnam demanded, among other things, that China “immediately end violation [sic],
and withdraw all Chinese survey and escorting vessels from the Vietnamese waters.”
At the same time, “Vietnamese maritime law enforcement authorities continue to
employ a range of appropriate measures to exercise Viet Nam’s sovereignty, sovereign
rights and jurisdiction in a peaceful and lawful manner…” A MOFA spokesperson called
for support from the international community.
The MOFA backgrounder states that on 4 July the Haiyang Dizhi 8 was escorted into
Vietnam’s exclusive economic zone by an unspecified number of China Coast Guard
ships and fishing vessels.
Vietnam Coast Guard ships were subject to assault by high-powered water cannons
and were subject to China Coast Guard ships cutting across their bows “in attempts to

coerce the Vietnamese vessels.” The number of Chinese vessels grew to 35 at its peak
during this confrontation according to the MOFA backgrounder. On 3 August a
Vietnamese source reported. privavely that the total number of Chinese vessels of all
types reached around 80.
Q2. Is there any indication of anti-China sentiment is growing within the Vietnam
Commuist. Party (VCP)? Some National Assembly delegates have spoken in favour of
curbing Chinese investment, and the recent South China Sea dispute is likely to lead
to calls for more nationalism in the party.
ANSWER: Anti-China sentiment is already at a high pitch within the VCP. The ongoing
standoff at Vanguard Bank will only reinforce this sentiment. Vietnamese, however,
are steeped in their history with China and even though they can recite the number of
times China invaded Vietnam they are also aware of the positive aspects of relations.
The bottom line is that Vietnam’s interests are not served by making China a
permanent enemy. The draft Law on Special Administrative and Economic Zones has
been taken off the agenda for this year’s National Assembly because of pervasive anti-
China sentiment in society and among deputies.
On 30 July, the Vietnam Fisheries Society issued a statement calling on the
government to protest “more strongly” about China’s actions in the South China Sea.
Q3. It's been suggested that, as preparations are now underway for VCP Congress in
2021, and as none of the frontrunners for General Secretary fill all the expectations of
a General Secretary, that the current General Secretary Nguyen Phu Trong and his
clique might face new opposition from more liberal delegates. Any thoughts on
whether challengers might use anti-China nationalism to thwart Trong's nominees,
given it is his biggest weakness in the party?
ANSWER: Vietnam’s leaders are considering loosening up the requirements for
mandatory retirement at age 65. VCP rules allow for exceptions in “exceptional cases.”
More stringent health standards will be applied. This move would give advantage to
Trong’s supporters.
They key question relating to Nguyen Phu Trong’s retirement is whether the posts of
party Secretary General and state President will continue to be combined or
separated. If they are left combined it will be difficult for any senior leader in
contention for a higher post to meet the requirements, particularly government
service. Most likely contenders have extensive party experience.
The issue of Vietnam’s relations with China will come to a head around October when
President/Secretary General Trong makes a visit to Washington to meet President
Trump in The White House. One important issue is whether to raise bilateral relations
from a comprehensive to a strategic partnership. This is obviously inter-connected
with Vietnam’s relations with China. The China factor will loom large as long as China
keeps its survey ship in Vietnam’s Exclusive Economic Zone with a large number of
escort ships, vessels and boats. Any ramming incident would likely set off anti-China
As leadership selection for the thirteenth party congress proceeds, it is likely that the
focus will turn on how the next VCP Secretary General will handle relations with China.
Differences among Vietnam’s top leaders emerged during the 2014 Hai Yang Shi You

981 crisis and they are likely to re-emerge. In 2014, when China learned of a move to
convene a special meeting of the VCP Central Committee to consider exiting China’s
orbit (thoát Trung) and move closer to the United States, China removed the HYSY
981. The VCP Secretary General sent a special envoy to China to repair bilateral
Nineteen persons were elected to the Politburo in 2016 at the twelfth party congress.
Three senior leaders have had serious health problems. Tran Dai Quang died in office,
Dinh The Huynh is effectively on medical leave, and Trong. If there is a push for a
younger leader it will likely come from within the Central Committee.

Media Identification: The University of New South Wales, Canberra or The University
of New South Wales at the Australian Defence Force Academy, Canberra.
Suggested citation: Carlyle A. Thayer, “South China Sea: Will Vanguard Bank Ignite
Vietnamese Nationalism?” Thayer Consultancy Background Brief, August 4, 2019. All
background briefs are posted on (search for Thayer). To remove yourself
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.