China miscalculates with Vietnam rig
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China miscalculates with Vietnam rig

Has Beijing overreached in the South China Sea? writes Asia Sentinel’s Bill Payton

What has China achieved by sending its deepwater drilling rig into the waters off the Paracel Islands?

In one single act it has managed to rupture relations with its brother communists in Vietnam, incensed Vietnamese popular opinion, generated gigabytes of critical international media coverage, revived the “China Threat” discourse in Southeast Asia and unified ASEAN behind a statement critical of its actions. At least 3,000 Chinese have been forced to flee Vietnam ahead of furious mobs who set fire to scores of factories, not discriminating between Taiwanese Chinese and Chinese Chinese. And for what?

There is always a chance that the rig might strike oil, but the chances are slim. It’s possible that CNOOC may have access to seismic surveys of the area but it seems more likely that the drill-site was chosen for geopolitical rather than geophysical reasons. No other oilfields have yet been discovered near the Paracels.

According to Yenling Song of Platts Energy in Singapore, industry estimates suggest CNOOC is paying US$328,000 a day to keep the rig on site. Although CNOOC is flush with cash it can’t leave the rig in position forever without making a find. The rig will eventually have to leave and, once it departs, the sea will be empty again. All of the trouble caused over the past two weeks days will have been for no economic reward.

If profit wasn’t the reason for CNOOC to drill off the Paracels then we have to assume that other factors influenced decision-makers in Beijing. However, as we look at each one in turn, it seems hard to see how the current stand-off will advance China’s overall interests. In fact, it seems more likely that they will be harmed.

It may be that Beijing thought that drilling for oil would be a clear assertion of sovereignty on China’s part: an act that would support the country’s territorial claim. Predictably, however, Vietnam has made an equally assertive response. An international tribunal won’t treat the current standoff as supporting either side’s claim to the islands and surrounding waters. If bolstering Beijing’s legal position was the reason for the operation, it has failed.

Splitting ASEAN?
The move may have been an attempt to split the Association of Asian Nations and isolate Vietnam. Perhaps Beijing was hoping to repeat its success at the ASEAN Foreign Ministers’ meeting in Phnom Penh in July 2012. That meeting followed China’s successful occupation of the Scarborough Shoal, a reef well within the Philippines’ Economic Exclusion Zone, and also an announcement by CNOOC offering for tender oil exploration blocks within Vietnam’s EEZ. (Those blocks were well to the south of the current dispute site.)

At the Phnom Penh meeting, the Philippines and Vietnam demanded a statement of support from their ASEAN colleagues. Their efforts were thwarted by the actions of the host, Cambodia, which vetoed any statement mentioning the incidents. Multiple reports at the time suggested it did so under the strong influence of Chinese foreign aid and diplomacy. ASEAN was left divided and wounded.

Perhaps China hoped to repeat its success this time by moving against Vietnam just days before the ASEAN summit. Perhaps its diplomats were confident that they could prevail upon Cambodia and perhaps Burma, Thailand or Laos to veto a joint statement, leaving Vietnam isolated and ASEAN split. It did not happen. ASEAN issued a special statement criticising events in the South China Sea.

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