This post summarizes one of nine case studies included in CSIS’s new report, Countering Coercion in Maritime Asia: The Theory and Practice of Gray Zone Deterrence. The full case study is also available for download here. (Principal case study researcher: Jake Douglas)

On May 1, 2014, Vietnam detected the Haiyang Shiyou 981 (HYSY 981) oil rig and three Chinese oil and gas service ships heading south from China’s Hainan Province. When the China National Offshore Oil Corporation (CNOOC) first launched this $1 billion deep-water drilling rig in 2012, the company’s chairman had lauded its virtues as a “strategic weapon” for Beijing in the South China Sea. This was the first time, however, that the HYSY 981 had actually moved into Vietnamese-claimed waters. One diplomat told reporters that this prospect had “been one of [Hanoi’s] worst fears” since the rig’s maiden voyage, even if “the timing caught us by surprise.”

The small flotilla was spotted near Triton Island in the Paracel Islands, which Beijing occupies but Hanoi and Taipei also claim. By the afternoon of May 2, it settled 17 nautical miles south of Triton. The CNOOC rig straddled two hydrocarbon blocks that Hanoi had previously demarcated but not yet developed. China’s Maritime Safety Administration (MSA) announced that the platform would conduct exploratory drilling in the area until August 15. Foreign vessels were prohibited from venturing within one nautical mile of the rig.

HYSY 981 was situated 120 nautical miles east of Vietnam’s Ly Son Island and 180 nautical miles south of Hainan. Because of cramped local geography, the rig thus fell within the maximum hypothetical entitlements of both China and Vietnam under the 1982 United Nations Convention on the Law of the Sea. Beijing and Hanoi still have not deconflicted their overlapping rights to exploit the region’s seabed and fishery resources.

The CNOOC rig was on the Vietnamese side of a median line drawn between mainland Vietnam and China—a common option for delimiting maritime boundaries (indicated by the horizontal white line above). Yet any settlement would also need to consider whether some of the Paracel Islands merit their own independent rights to a continental shelf. It is doubtful that Hanoi or an international court would award these tiny features equal weight (as depicted in red) to major coastlines when calculating a new median line. On the other hand, the 25 and 50 percent formulas used in the 2000 Sino-Vietnamese Tonkin Gulf Agreement might put the oil rig back in China’s zone. This would also require Vietnam to recognize Chinese sovereignty over the Paracels, which is an entirely separate territorial dispute. Given this complex legal situation, observers noted that China’s rig was in disputed waters.

Vietnamese Coast Guard and Fisheries Resources Surveillance (VFRS) forces were immediately dispatched to intercept HYSY 981. Their mission, in the words of a navy official, was to make a “show of force” to prevent the oil rig from “establishing a fixed position.” China faced six Vietnamese vessels attempting to disrupt the operation of the rig the following day. Afterwards, the number of Chinese escorts jumped quickly to 40 ships, including China Coast Guard (CCG), civilian fishing, and probably Chinese navy ships.

China arrayed its forces in protective rings to head off the hostile ships, a tactic it had used in clashes with Hanoi since at least 2007. Violent collisions occurred almost immediately. Beijing claimed the Vietnamese deliberately rammed Chinese vessels, with video showing a VFRS cutter striking two CCG ships. Hanoi charged Beijing with similar aggression that in one case ruptured a Vietnamese vessel’s hull. China expanded its defensive perimeter from one to three nautical miles on May 4 to better shield the oil rig.

The United States waded into the crisis on May 6. The State Department singled out Beijing’s “unilateral” action as particularly “provocative and unhelpful.” Senior U.S. officials then held “extensive discussions” with Vietnamese leaders. They appeared to publicly encourage Hanoi to pursue international arbitration. Vietnam won further diplomatic support from the Association of Southeast Asian Nations and other regional and global powers. At the same time, Washington indicated that direct U.S. military intervention was not on the table.

Meanwhile, standoffs and collisions continued. Hanoi reported the presence of 60 Chinese vessels as well as “dozens of aircraft” overhead by May 7. Vietnam itself had 29 armed naval and law enforcement ships deployed. Damaged vessels were repaired at sea so they could remain engaged. China soon enlarged its security cordon around the rig—which had lowered its drilling equipment—to 5 nautical miles and then once more to 10-15 nautical miles.

Vietnamese citizens also began taking to the streets. Large rallies were held on May 10 and 11. Hundreds marched outside the Chinese embassy in Hanoi plus a thousand in Ho Chi Minh City. Public demonstrations of such size are highly unusual in Vietnam; the security services frequently repress anti-China agitation. In this case, plainclothes officers reportedly handed out signage and state television covered the protests heavily.

Popular unrest spiraled out of state authorities’ control on May 13. Across Vietnam, rioters “spontaneously” vandalized hundreds of foreign-owned factories thought to belong to Chinese companies (many other foreign firms were also targeted accidentally). At least six Chinese citizens were killed. Beijing angrily accused Hanoi of encouraging the riots, issued travel warnings, and evacuated many of its nationals as Vietnamese police struggled to restore order.

The situation also escalated at sea. China claimed that Vietnam had deployed 60 ships around HYSY 981 and had instigated 500 rammings by May 17. Hanoi likewise observed as many as 130 Chinese government vessels. Most of these had far greater tonnage than Vietnam’s ships. This made a sinking much more likely for Hanoi during collisions, as in fact occurred when a Vietnamese fishing vessel sank. Rumors also circulated about Chinese troop mobilizations in nearby Guangxi and Yunnan Provinces along the countries’ land border.

Nevertheless, on May 27 Chinese tugboats pulled HYSY 981 to a new location northeast of Triton Island. The MSA explained that a second phase of oil and gas exploration was commencing. But after a high-level visit by Chinese state councilor Yang Jiechi to Hanoi on June 18, several Chinese vessels departed and the remaining force became less assertive. The oil rig’s drilling equipment was also visibly retracted.

On July 15, CNOOC announced the rig’s withdrawal a full month ahead of schedule. Beijing publicly asserted that the operation was concluded “in accordance with relevant company’s plan” and had “nothing to do with any external factor.” Vietnamese leaders hailed the apparent Chinese retreat as a victory and thanked the international community for its support. HYSY 981 has returned to the northwestern portion of the South China Sea several times since 2014, but has not yet again crossed over to Vietnam’s side of the disputed median line.

The China-Vietnam oil rig standoff is perhaps the clearest case of a major coercive failure for Beijing, so several observations are in order:

  • First, Vietnam’s response may have been a surprise, but Chinese leaders still accepted substantial risk in deploying a large fleet of coast guard, civilian, and naval vessels for several weeks. Yet, Hanoi continued to demonstrate substantial resolve by pushing back so forcefully and accepting a high level of risk for a sustained period.
  • Second, despite Chinese forces escalating repeatedly, outnumbering and outgunning those from Vietnam—and facing little threat of U.S. military intervention—Beijing ultimately appeared to back down and moderate its subsequent behavior.

Timeline

For more articles in this series, please visit our Countering Coercion in Maritime Asia Report page.

About Michael Green

Michael Jonathan Green is senior vice president for Asia and Japan Chair at CSIS and an associate professor at the Edmund A. Walsh School of Foreign Service at Georgetown University. He served on the staff of the National Security Council (NSC) from 2001 through 2005, first as director for Asian affairs, and then as special assistant to the president for national security affairs and senior director for Asia.

About Kathleen Hicks

Kathleen Hicks is senior vice president, Henry A. Kissinger Chair, and director of the International Security Program at the Center for Strategic and International Studies.

About Zack Cooper

Zack Cooper is a senior fellow for Asian security at the Center for Strategic and International Studies. He previously served on staff at the National Security Council and in the Office of the Secretary of Defense. He received a B.A. from Stanford University and an M.P.A., M.A., and Ph.D. from Princeton University.

About John Schaus

John Schaus is a fellow in the CSIS International Security Program, where he focuses on defense industry and Asia security challenges. His research areas include Asia-Pacific security issues and U.S. defense policy and industry. Prior to rejoining CSIS in July 2014, he worked in the Office of Asian and Pacific Security Affairs within the Office of the Secretary of Defense.

About Jake Douglas

Jake Douglas is a masters candidate at the Josef Korbel School of International Studies at the University of Denver. Previously, he was a research assistant with the Japan Chair at the Center for Strategic and International Studies.