Did China Blink in the South China Sea?

"A deep dive into this question will not only shed light on China’s resolve, but also explore valuable lessons for how to cope with Beijing’s aggressiveness."

For seventy-five days starting from May 2, China unilaterally deployed its US$1 billion oil rig HYSY-981 to drill in waters lying within Vietnam’s exclusive economic zone (EEZ). The platform was originally scheduled to stay until August 15, but on July 15, China announced that the rig had completed its work and would be relocated to Hainan Island. The removal of the drilling rig is as unilateral and unexpected as its deployment. When the platform was parked in the contested area, it sparked the worst crisis since 1988 in Sino-Vietnamese relations.

As with other crises of its kind, this standoff was also a battle of wills. If power is a key to winning international conflict, resolve is equally important. The party with more resolve may win even if it is the less powerful party. With their respective sovereignties at stake, the two states tested each other’s resolve to see who would blink first.

Against this background, China’s withdrawal of the oil rig a month before schedule did not serve to show its resolve. So, did China blink? A deep dive into this question will not only shed light on China’s resolve, but also explore valuable lessons for how to cope with Beijing’s aggressiveness. Out of the numerous possible explanations, let’s examine the three most plausible.

Nature’s Blow

The most simple, and at first glance, most compelling reason for China’s removal of the oil rig is bad weather. The day before the drilling platform’s withdrawal, the weather at its location was getting stormy, forewarning of the coming typhoon Rammasun. Classified as a “super typhoon,” Rammasun was expected to make landfall on the nearby island of Hainan in three days, on July 18. Although the Paracel southwest, where the drilling rig was parked, was forecast to be not directly on Rammasun’s path, nobody could guarantee that the severe storm would not cause damage to structures, ships and people at that place. Although the 981 is said to be able to withstand powerful typhoons, it would be too risky to keep it and the escorting vessels in the middle of the ocean during bad weather.

China faced two choices. One choice was to move the rig farther south to get out of the typhoon’s path. This would have moved the rig deeper into Vietnam’s EEZ, and would have put the protective armada at a larger logistic risk while escalating the conflict with Vietnam. The other choice was to move the platform closer to China’s shore and out of the waters claimed by Vietnam. This would have allowed the rig to be anchored at a shallower place, while not requiring a large number of vessels to protect it from the Vietnamese. China chose the second option, which was less risky, and announced that the rig had completed its work. This announcement was also the better choice for China. Declaring a temporary withdrawal of the drilling platform would have necessitated an immediate return after the storm. This return would have been challenged by a large flotilla of Vietnamese vessels, and China would have risked losing face by not being able to install the rig at its previous site.

The “bad weather” explanation, however, makes at least one related event puzzling. On July 15, the same day as the oil rig started to move back, China released all the thirteen Vietnamese fishermen it arrested during the oil rig crisis. Was this the result of a quiet bargain with Vietnam or a realization by China that the crisis had reached its limits?

A Tacit Bargain

We do not know whether or not a secret deal was struck, but what we do know might indicate a tacit bargain took place. While Chinese and Vietnamese ships played cat and mouse near the controversial oil rig, Hanoi’s leaders sought to negotiate with Beijing, which replied with four preconditions for talks. The first was that Vietnam must stop harassing China’s oil rig and vessels. Second, Vietnam must not dispute China’s ownership of the Paracel Islands. The third condition was that Vietnam must not pursue legal proceedings against China’s claims and actions in the South China Sea. And finally, Vietnam must not involve third parties, particularly the United States and the West, in this bilateral issue.

The first two conditions were politically impossible for any government in Hanoi to meet. But Hanoi made two decisions that signaled its bow to the other two. Despite a large campaign in the state-owned media and strong calls from several corners for taking Beijing to court, Vietnam’s collective leadership decided not to file legal actions against China. They also postponed a trip by Foreign Minister Pham Binh Minh to the United States, which was initially approved and scheduled for June after Minh’s May 21 phone call with his U.S. counterpart John Kerry. China’s removal of the drilling rig and its release of the Vietnamese fishermen can be interpreted as a reciprocal act of deescalation.