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FOREIGN POLICY
The Week Donald Trump Lost the South China Sea
Vietnam's capitulation shows China's neighbors fear the U.S. no longer
has their backs.
Bill Hayton
Vietnam’s history is full of heroic tales of resistance to China.
But this month Hanoi bent the knee to Beijing,
humiliated in a contest over who controls the South China Sea,
the most disputed waterway in the world. Hanoi has been looking to
Washington for implicit backing to see off Beijing’s threats. At the
same time, the Trump administration demonstrated that it either does not
understand or sufficiently care about the interests of its friends and
potential partners in Southeast Asia to protect them against China.
Southeast Asian governments will conclude that the United States does
not have their backs. And while Washington eats itself over Russian
spies and health care debates, one of the world’s most crucial regions
is slipping into Beijing’s hands.
There’s no tenser set of waters in the world than the South China Sea.
For the last few years, China and its neighbors have been bluffing,
threatening, cajoling, and suing for control of its resources. In June,
Vietnam made an assertive move. After two and a half years of delay, it
finally granted Talisman Vietnam (a subsidiary of the Spanish energy
firm Repsol) permission to drill for gas at the very edge of Hanoi’s
exclusive economic zone (EEZ) in the South China Sea.
Under mainstream interpretations of the U.N. Convention on the Law of
the Sea (UNCLOS), Vietnam was well within its rights to do so. Under
China’s idiosyncratic interpretation, it was not. China has never even
put forward a clear claim to that piece of seabed. On July 25, Chinese
Foreign Ministry spokesman Lu Kang would only
urge “the relevant party to cease
the relevant unilateral infringing activities” — but without saying what
they actually were. In the absence of official clarity, Chinese lawyers
and official think tanks have suggested two main interpretations.
China may be claiming “historic rights” to this part of the sea on the
grounds that it has always been part of the Chinese domain (something
obviously contested by all the other South China Sea claimants, as well
as neutral historians). Alternatively, it may be claiming that the
Spratly Islands — the collection of islets, reefs, and rocks off the
coasts of Vietnam, Malaysia, Brunei, and the Philippines — are entitled
as a group to their own EEZ. An international arbitration tribunal in
The Hague, however, ruled these claims incompatible with UNCLOS a year
ago. China has refused to recognize both the tribunal and its ruling.
In mid-June, Talisman Vietnam set out to drill a deepwater “appraisal
well” in Block 136-03 on what insiders believe is a billion-dollar gas
field, only 50 miles from an existing Repsol operation. The Vietnamese
government knew there was a risk that China might try to interfere and
sent out coast guard ships and other apparently civilian vessels to
protect the drillship.
At first, China’s intervention was relatively diplomatic. The vice
chairman of the Central Military Commission, Gen. Fan Changlong, visited
Hanoi on June 18 and demanded an end to the drilling. When Vietnam
refused, he cancelled a joint meeting on border security (the 4th Border
Defense Friendly Exchange) and went home.
Reports from Hanoi (which have been confirmed by
similar reports, from different
sources, to the Australia-based analyst Carlyle Thayer) say that,
shortly afterward, the Vietnamese ambassador in Beijing was summoned to
the Chinese Foreign Ministry and told, bluntly, that unless the drilling
stopped and Vietnam promised never to drill in that part of the sea ever
again, China would take military action against Vietnamese bases in the
South China Sea.
This is a dramatic threat, but it is not unprecedented. While
researching my book on the South China Sea, I was told by a former BP
executive that China had made similar threats to that company when it
was operating off the coast of Vietnam in early 2007. Fu Ying, then the
Chinese ambassador in London, told BP’s CEO at the time, Tony Hayward,
that she could not guarantee the safety of BP employees if the company
did not abandon its operations in the South China Sea. BP immediately
agreed and over the following months withdrew from its offshore Vietnam
operations. I asked Fu about this at a dinner in Beijing in 2014, and
she replied, “I did what I did because I have great respect for BP and
did not want it to get into trouble.”
Vietnam occupies around 28 outposts in the Spratly Islands. Some are
established on natural islands, but many are isolated blockhouses on
remote reefs. According to Thayer, 15 are simply platforms on legs: more
like place markers than military installations. They would be all but
impossible to defend from a serious attack. China demonstrated this with
attacks on Vietnamese positions in the Paracel Islands in 1974 and in a
battle over Johnson South Reef in the Spratlys in 1988. Both incidents
ended with casualties for Vietnam and territorial gains for China. There
are rumors, entirely unconfirmed, that there was a shooting incident
near one of these platforms in June. If true, this may have been a more
serious warning from Beijing to Hanoi.
Meanwhile, the drillship Deepsea Metro I had found exactly what
Repsol was looking for: a handsome discovery — mainly gas but with some
oil. The company thought there could be more and kept on drilling. It
hoped to reach the designated total depth of the well by the end of
July.
Back in Hanoi, the Politburo met to discuss
what to do. Low oil prices and declining production from the country’s
existing offshore fields were hurting the government budget. The country
needed cheap energy to fuel its economic growth and keep the Communist
Party in power — but, at the same time, it was deeply dependent on trade
with China.
It is all but impossible to know for sure how big decisions are made in
Vietnam, but the version apparently told to Repsol was that the
Politburo was deeply split. Of its 19 members, 17 favored calling
China’s bluff. Only two disagreed, but they were the most influential
figures at the table: the general secretary of the party, Nguyen Phu
Trong, and Defense Minister Ngo Xuan Lich. After two acrimonious meetings in mid-July, the decision was made: Vietnam would kowtow to Beijing and end the drilling. According to the same sources, the winning argument was that the Trump administration could not be relied upon to come to Hanoi’s assistance in the event of a confrontation with China. Reportedly, the mood was rueful. If Hillary Clinton had been sitting in the White House, Repsol executives were apparently told, she would have understood the stakes and everything would have been different.
The faith in Clinton isn’t surprising. Her interventions on behalf of
the Southeast Asian claimant states, starting in Hanoi at the
July 2010 meeting of the ASEAN
Regional Forum, are well remembered in the region. The Barack Obama
administration’s focus on the regional rules-based order was
welcomed by governments fearful of
domination by either the United States or China.
That said, some U.S. observers are skeptical that any other
administration would have been more forthcoming. Bonnie Glaser, the
director of the China Power Project at the Center for Strategic and
International Studies, questions this apparent contrast: “What would the
U.S. have done differently [under Obama]? I find it unlikely that the
U.S. would militarily defend Vietnam against China. Vietnam isn’t an
ally.”
Yet it wouldn’t have taken much: a statement or two about the
rules-based order and the importance of abiding by UNCLOS, some
coincidental naval exercises during the weeks of the drilling, perhaps
even some gunnery practice in the region of Block 136-03 and a few quiet
words between Washington and Beijing. “Forward-deployed diplomacy,” as
it used to be called. The Obama administration warned
Beijing off the Scarborough Shoal in April 2016 this way. Has Donald
Trump’s Washington forgotten the dark art of deterrence?
The implications of China’s victory are obvious. Regardless of
international law, China is going to set the rules in the South China
Sea. It is going to apply its own version of history, its own version of
“shared” ownership, and it will dictate who can exploit which resources.
If Vietnam, which has at least the beginnings of a credible naval
deterrent, can be intimidated, then so can every other country in the
region, not least the Philippines.
This month, Manila
announced its intention to drill
for the potentially huge gas field that lies under the Reed Bank in the
South China Sea. The desire to exploit those reserves (before the
country’s main gas field at Malampaya runs out in a few years’ time) was
the main reason for the Philippines to initiate the arbitration
proceedings in The Hague. The Philippines won a near total legal victory
in that case, but since taking office just over a year ago, President
Rodrigo Duterte has downplayed its importance. He appears to have been
intimidated: preferring to appeal to China for financial aid rather than
assert his country’s maritime claims.
In May, Duterte
told an audience in Manila that
Chinese President Xi Jinping had warned him there would be war if the
Philippines tried to exploit the gas reserves that the Hague tribunal
had ruled belonged to his country. Last week, Chinese Foreign Minister
Wang Yi was in the Philippine capital to discuss “joint
development” of those energy resources.
Where Duterte and the Vietnamese leadership go, others will follow.
Southeast Asian governments have reached one major conclusion from
President Trump’s first six months: The United States is not prepared to
put skin in the game.
What is the point of all those freedom of navigation operations to maintain UNCLOS if, when push comes to shove, Washington does not support the countries that are on the receiving end of Chinese pressure?
Why has Washington been so inept? Secretary of State Rex Tillerson knows the stakes well. His former company ExxonMobil is also investigating a massive gas prospect in disputed waters. The “Blue Whale” field lies in Block 118, farther north and closer to Vietnam’s coast than Repsol’s discovery — but also contested by China. Like so much else, it’s a mystery whether this is a deliberate choice by the Trump White House not to get involved in the details of the disputes or if it is a reflection of the decimation of the State Department’s capabilities, with so many senior posts vacant and so many middle-ranking staff leaving.
The most worrying possibility would be that Tillerson failed to act out of the desire to see his former commercial rival, Repsol, fail so that his former employer, ExxonMobil, could obtain greater leverage in the Vietnamese energy market. But what government would ever trust Tillerson again?
Repsol is currently plugging its highly successful appraisal well with
cement and preparing to sail away from a total investment of more than
$300 million. Reports from the region say a Chinese seismic survey
vessel, the HYSY760, protected by a small flotilla, is on its way
to the same area to examine the prospects for itself. UNCLOS has been
upended, and the rules-based order has been diminished. This wasn’t
inevitable nor a fait accompli. If Hanoi thought Washington had
its back, China could have been deterred — and the credibility of the
United States in the region strengthened. Instead, Trump has left the
region drifting in the direction of Beijing. |