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Fear and Loathing in Vietnam


Fear and Loathing in Vietnam

Chinese President Xi Jinping (left) and Vietnamese Communist Party General Secretary Nguyen Phu Trong (right) wave as they leave the Presidential Palace for the Headquarters of the Vietnam Communist Party for official talks in Hanoi on November 5, 2015. Photo: Hoang Dinh Nam/Reuters

Chinese President Xi Jinping’s state visit to Vietnam this week, the first by a Chinese president in ten years, drew mixed reaction among the Vietnamese.  Beijing has come under criticism in recent months by Hanoi for its dredging of sand to create approximately 3,000 acres (1,200 hectares) of land on submerged reefs in the South China Sea over the last 18 months.  China’s island building and other efforts to assert its control over the disputed South China Sea—in the face of competing claims from Vietnam, as well as Brunei, Malaysia, the Philippines, and Taiwan—have resulted in Beijing coming under fire for perceived violations of international law, including the UN Convention on the Law of the Sea (UNCLOS) and a declaration of conduct reached in 2002 by members of the Association of Southeast Asian Nations (ASEAN).

Vietnam and other Southeast Asian nations not only challenge China’s claims of sovereignty, they fear the militarization of these islands, as Chinese companies busy themselves constructing airstrips, radar systems and other potential military facilities on the reclaimed islands.  The Chinese now control two airstrips on Fiery Cross Reef and Subi Reef and are reportedly constructing a third airstrip on Mischief Reef, all of which belong to the Spratly island chain of the South China Sea.

While the international press focus on the paranoia of the U.S. and many Southeast Asian countries over China’s island-building and aggressive actions in the disputed South China Sea, here in Vietnam the paranoia runs deeper. Prior to Xi’s visit, Vietnamese President Truong Tan Sang stated, “as Mr. Xi Jinping claims that the islands have belonged to China since ancient times, we would like to counter-argue that statement.  The Spratlys and Paracels have always belonged to Vietnam, and we have all historical and legal evidence to support our sovereignty.

Hanoi reacted angrily last month to news of a Chinese ceremony held to mark the completion of lighthouses constructed on Cuateron Reef and Johnson South Reef in the Spratly islands. Vietnamese Foreign Ministry spokesman Le Hai Binh said the construction of lighthouses “seriously violates Vietnam’s sovereignty … complicates the situation and escalates tensions.” Beijing claims the lighthouses were constructed to assist all seafaring nations with navigation while Hanoi believes the construction of lighthouses is merely an attempt to assert sovereignty.

Hanoi has also disputed Beijing’s adoption of a national marine zoning plan, as reported by Chinese media on August 21.  The 380,000 square kilometers zone includes the disputed maritime territories of the Paracel and Spratly archipelagos, and sets aside maritime zones for exploitation and development, while leaving aside some wholly-protected areas.  The prioritized zone for exploitation and development includes waters adjacent to the China’s Hainan Province and the Gulf of Tonkin near Vietnam.

Similarly, the paranoia over China’s claims of sovereignty have extended to the Vietnamese mainland.  According to recent issues of two English-language newspapers, Thanh Nien and Tuoi Tre, Chinese buyers are suspected of using locals to purchase prime waterfront properties in the central Vietnamese city of Da Nang.  According to the municipal authorities in Da Nang, 13 coastal land plots appear to have been sold to local Vietnamese-run businesses—with mostly Chinese suspected of providing the cash. A new Vietnamese housing law came into effect July 1, prohibiting the purchase of land by foreigners, and allowing only the lease of apartments or houses for a 50-year period.

While some of the land apparently has been used to build seaside hotels and restaurants catering to Chinese tourists, others fear an alternative agenda. At a recent meeting among the city’s leaders, department director Nguyen Dieu warned that the purchase of land by foreigners, mostly Chinese, “poses huge risks” while the secretary of the city’s Party Committee, Tran Tho, called the land purchases “very dangerous.” Le Cao, a local attorney, warned “we have to remain cautious as foreign ownership of coastal land plots can affect the national defense and security.” Authorities in Da Nang are now looking into the purchases in an effort to trace the origin of the cash.

The central coastal city of Da Nang is particularly sensitive to Chinese investment—last December two construction projects were suspended, and yet another has been refused to be licensed as their locations were deemed sensitive areas in terms of national defense. One of the suspended projects in Da Nang was for the cultivation of vegetables, another project was to offer tours of coral reefs in glass-bottomed submarines, while a third project involved the construction of a wharf complex for cruise boats and paragliding. In each case, Vietnam’s Command of Military Zone 5 rejected the investments, citing potential threats to national defense and security.

Vietnamese authorities certainly have the right to uphold their own sovereignty on the undisputed mainland, although these hidden purchases probably have more to do with economic and monetary considerations rather than covert military planning. Rather, the rejection of Chinese investment can be better understood as a reflection upon the deeply-ingrained paranoia the Vietnamese feel when it comes to the Chinese.  Vietnamese paranoia has grown and morphed in the wake of centuries of living under the suzerainty of Chinese dynasties, the 1974 clash over the Paracel Islands, the brief and bloody invasion of 1979 (Chinese leader Deng Xiaoping said he wanted to teach the Vietnamese “a lesson”), and finally, reflected in the angry protests of May 2014—triggered by the deployment of a Chinese oil rig into Vietnam’s economic exclusive zone.

While Chinese President Xi was welcomed to Hanoi on Thursday with a rare 21-gun salute and warm handshakes, outside the Chinese Embassy in Hanoi about 30 people protested briefly and a larger anti-China protest took place on the streets of Ho Chi Minh City. Despite the warm rhetoric between politicians, and the pledges of cooperation between Communist brothers, fear, paranoia and anger still linger.





Gary Sands

Gary Sands is a Senior Analyst at Wikistrat, a crowdsourced consultancy, and a Director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, U.S. News and World Report, Newsweek, Washington Times, The Diplomat, The National Interest, International Policy Digest, Asia Times, EurasiaNet, Eurasia Review, Indo-Pacific Review, the South China Morning Post, and the Global Times. He was previously employed in lending and advisory roles at Shell Capital, ABB Structured Finance, and the U.S. Overseas Private Investment Corporation. He earned his Masters of Business Administration in International Business from the George Washington University in Washington, D.C. and a Bachelor of Science in Finance at the University of Connecticut in Storrs, Connecticut. He spent six years in Shanghai from 2006-2012, four years in Rio de Janeiro, and is currently based in Ho Chi Minh City, Vietnam. Twitter@ForeignDevil666