China’s recent movements on the East Sea clearly show the Chinese leaders’ intention to take control of most of the East Sea. China demarcates its claims of the East Sea within the 9-dash line, also known as U-shape line or nine-dotted line, which takes over 90% of the waters. China’s exploration, patrol, and policing in the East Sea has encountered disapproval from other countries. On 2nd May 2014, China National Offshore Oil Corporation moved its Haiyang Shiyou 981 oil platform into the Vietnamese continental shelf, which is also Vietnam’s exclusive economic zone (EEZ). After this “provocative” and “destabilizing the region” activity (said by the US and Japan), the incident was not resolved and limited within the sea as suggested by previous encounters. Facing determined efforts of Vietnam to prevent the platform from fixing its position, China responded with a series of actions which has been perceived by many Vietnamese experts’ as a ‘warning’ from Chinese leaders. The Vietnamese leaders neither compromise about the territorial issue nor accept the proposal of “setting aside disputes and jointly developing” put forward by Deng Xiaoping and promoted by generations of Chinese leadership. Although the relation between Vietnam and China continued improving over the years, the rise of China in terms of economic power and aggression in the East Sea make a strong case that raises doubts and precautions among Vietnamese.
This paper will discuss the impacts of the tension on the East Sea on the Vietnamese economy and put forward policy recommendations which can help alleviate the issues.