The way forward

The anti-China riots abated after China exerted pressure on the Vietnamese Government. At sea, however, Viet Nam continues to harass the Chinese company by forcefully intruding the warning area around the Chinese oil rig. While Chinese and Vietnamese ships continue to clash as Viet Nam seeks to assert its self-perceived "sovereignty," chances for the conflicts to escalate again are slim. This is because Viet Nam will not able to win this asymmetric "battle," nor can it afford to prolong it.

The deterioration of China-Viet Nam relations and open conflicts between them are detrimental to both countries. The anti-China riots jeopardized Viet Nam's international credibility and image as an investment destination. The Vietnamese Government's failure to protect foreign investors will prompt prospective investors to reassess Viet Nam's investment climate and social stability, posing a challenge to the country's efforts to attract further foreign investment. The riots also dealt a blow to Viet Nam's ailing economy as 60,000 workers lost their jobs in Binh Duong Province in the aftermath. Also, they brought to light strategic disagreements among the Vietnamese leadership, pushing the Vietnamese Government to the brink of a public relations crisis.

The riots had disastrous consequences for China as well. They inflicted losses of life and property on Chinese companies, thus dampening their confidence in investing in Viet Nam. They also set a negative precedent for other countries involved in disputes over the South China Sea. The Philippines, for instance, sent a complicated message when it openly expressed concerns that the Filipinos may follow in the footsteps of the Vietnamese.

The door to diplomatic negotiations between China and Viet Nam remains open. The problem is whether Viet Nam is willing to return to the negotiating table. Viet Nam knows that it has little room for maneuvering in negotiations. On May 22, Dung proposed to resolve disputes over territorial waters with China by legal means for the first time. He said that Viet Nam was considering various "defense options" against China, including legal actions. If Viet Nam turns to international law, the already strained bilateral ties will become even tenser. The bilateral trade relationship will also suffer.

China's position on maritime disputes is clear. It will never waver in its efforts to protect national interests in the East China Sea and the South China Sea. At the same time, it is committed to resolving disputes through negotiations. In the face of unilateral provocations, it will not be daunted, but will react reasonably, effectively and with self-restraint to defend its interests. It will also take measures to prevent tensions from spinning out of control, preserve existing consensus and safeguard regional stability and order.

The economies of China and Viet Nam have yet to become highly integrated as their trade and economic cooperation are still at the low end of the value chain. Moreover, despite frequent youth exchanges and close cultural cooperation, the two countries have yet to forge a special relationship culturally. Viet Nam not only allows anti-China rhetoric to prevail in society but also deliberately portrays China as an aggressive power that lords itself over weak countries. As a result, young people in Viet Nam hardly identify with China.

In a nutshell, economic and cultural ties between China and Viet Nam are not strong enough to convince them that negotiations are the premium option to settle disputes. Against this backdrop, China needs to improve dispute settlement mechanisms while making bilateral agreements more binding and workable. In the long term, however, enhancing economic interdependence and building cultural rapport provide the most viable solution.

The author is an assistant researcher with the Institute of Southeast Asian Studies, Guangxi Academy of Social Sciences

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