Chinese – Vietnam Relations Sour over Territory Disputes

Recent antagonism between China and its southern neighbor Vietnam has severely hampered relations between the nations, inciting riots against in Vietnam and a plethora of rhetoric from Beijing. Earlier in May, an encounter between Vietnamese vessels and Chinese ships near an oil rig in disputed waters of the South China Sea ended with the sinking of a Vietnamese fishing boat. Denying claims of responsibility, a senior official in Beijing fired back in saying “Vietnam’s disruptions of the Chinese company’s normal activities have seriously violated China’s sovereignty, sovereignty rights and jurisdiction, gravely affected the normal order of production and operation and the safety of China’s rig, and caused unnecessary troubles for China-Vietnam relations.” The rig, owned by state-run China National Offshore Oil Company (CNOOC) Group is roughly 150 miles (240 km) off the Vietnamese coast and 206 miles (330 km) from China’s southern Hainan Island.

China is Vietnam’s largest trading partner and it would seem the Vietnamese dependence on Chinese exports cannot be ignored. According to government data, bilateral trade between the two countries rose 84% to $50.2 billion last year from $27.3 billion in 2010. Chinese raw materials are essential to Vietnam’s manufacturing sector, and as of now it seems that only the tourism sector has suffered due to this incident.

Talks regarding a settlement over this dispute have yielded limited results, however analysts believe that a strongly shared mutual desire for regional economic prosperity will quash this feud soon. The Economist recently pointed that despite rioting and looting by the Vietnamese, the government is focused on maintaining the country’s image as a reliable, low-risk investment destination.

      

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