China Deploys Submarine Near Vietnam Oil Rig, 86 Vessels Now Present

Tyler Durden's picture


With the additional deployment of a submarine and a missile ship, there are now 86 Chinese vessels accompanying the oil rig's installation in Vietnam's Exclusive Economic Zone (EEZ). Local news reports that 3 Chinese military ships are surrounding a Vietnamese marine police vessel this morning and water cannon use continues against Vietnamese ships. We addressed the who, what, where, when and how of China’s HD-981 oil rig foray into Vietnamese waters here but, as we discuss below, the enduring question, as with many of China’s recently provocative actions in the Asia-Pacific, remains why?

Via The Diplomat,

Why Did China Set Up an Oil Rig Within Vietnamese Waters?

Why now and why Vietnam?

The enduring question, as with many of China’s provocative actions in the Asia-Pacific, remains why? The opacity of China’s internal decision-making processes makes it rather difficult to conclusively answer that question, but a good amount of evidence suggests that the oil rig crisis with Vietnam was manufactured to test the mettle of ASEAN states and the United States. It gives Beijing an opportunity to gauge the international response to China asserting its maritime territorial claims.

As Carl Thayer points out on this blog and M. Taylor Fravel said in an interview with The New York Times, the China National Offshore Oil Company’s decision to move oil rig HD-981 was a premeditated move of territorial assertion. CNOOC may be a state-owned enterprise but the decision to move this $1 billion asset into an area with questionable hydrocarbon reserves while also inciting a diplomatic crisis speaks to the planned, political nature of this move. The fact that approximately 80 PLAN and Chinese coast guard ships accompanied the rig reinforces the notion that China was making a strategic push to assert its territorial claims in the region.

The question of why China chose to escalate with Vietnam specifically is perhaps slightly easier to answer. Several analysts have already noted that China caught the world off-guard by choosing to escalate its territorial dispute with Vietnam given that relations between the two countries were improving as recently as fall 2013. Additionally, a certain degree of camaraderie exists between the Communist Party of Vietnam (CPV) and the Chinese Communist Party (CCP). For China to suddenly risk a relatively stable bilateral relationship through an underlying rivalry seemed brazen and irresponsible.

On the contrary, if China had to push any dispute in the South China Sea to test the mettle of the United States and ASEAN, Vietnam was perhaps the most fitting candidate. As Tuong Vu told the New York Times, a political debate exists within Vietnam about whether the country should remain close to China or pursue closer relations with the west, with the former faction wielding considerably more influence. With this in mind, China gambled with a good degree of confidence that despite the oil rig provocation, Vietnam would respond with rhetoric and restraint — not force.

To this end, only Chinese coast guard vessels rammed Vietnamese ships and hit them with water cannons — the PLAN remained in a support function, ensuring that whatever kinetic coercion was used was not explicitly originating from a military vessel (although Vietnam did not entirely buy this interpretation). Furthermore, before China can begin trying its luck with U.S. allies in the region, such the Philippines, which recently signed a ten-year defense facility sharing deal with the United States, it must see if the United States is willing to defend its self-stated interests in the region.

Whereas with the Philippines, South Korea, and Japan the United States is treaty-bound to take action, in the case of other disputes in the South China Sea, particularly the Paracel Islands dispute between Vietnam and China, all the United States has to do is demonstrate that it is willing to stand up for the interests it has identified in the past, including freedom of navigation, the peaceful resolution of all conflicts, and the non-use of coercion and intimidation in disputes. With HD-981, China has challenged the United States on all three. Additionally, given ExxonMobil’s interests in the waters, HD-981 is also impeding U.S. commercial interests in the region. So far, the United States’ response — a statement calling China’s behavior “provocative” — is insufficiently costly to China to deter such behavior in the future.

Finally, China timed this coercive move as U.S. President Barack Obama left Asia and just prior to the meeting of ASEAN Heads of Government/State in Naypyidaw, Myanmar this past weekend. In doing so, China was taking a risk: the move would doubtless draw massive international attention and condemnation. However, as the ASEAN Summit statement demonstrates, China still has an assurance that regional leaders are insufficiently united to put forth a joint front against Chinese coercion in the South China Sea. While it is significant that ASEAN Foreign Ministers issued a separate statement, the “internationalization” of disputes that China dreads has not yet come to pass (and likely will not anytime soon).

Similarly, as the United States grows old, weary and underfunded as the global policeman, this oil rig debacle sits in the same category of global crises as Syria and Ukraine — just without the same sort of political urgency. By avoiding a U.S. treaty ally or major partner, China seeks to paint the U.S. as unable to assert its interests in the region. A negative consequence of this is that other states engaged in territorial disputes with China will seek to unilaterally militarize to offset their reliance on U.S. security guarantees, potentially creating a headache for China later in the future.

The decision to move oil rig HD-981 into disputed waters matches China’s decision to impose an air defense identification zone (ADIZ) over the East China Sea in terms of signaling China’s appetite to unilaterally pursue its maritime territorial claims. China has said that the oil rig will remain in these waters until August this year. What ultimately sets this episode apart from any other is that it is the first time China has placed an asset this expensive within the exclusive economic zone (EEZ) of another state. And Vietnam isn’t a pushover of a state either — it has a more-than-modest maritime capacity that could result in an armed altercation with China. Overall, in the past six months, we’ve seen China more assertive than ever in pursuing its claims and, for the moment, it is succeeding.

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Tue, 05/13/2014 - 21:51 | 4757467 RafterManFMJ
RafterManFMJ's picture

Sigh. It's the Dip-lomat.

Tue, 05/13/2014 - 22:09 | 4757516 NoDebt
NoDebt's picture

Agreed.  Anytime I see 'The Diplomat' I throw up in the back of my mouth a little.  They should just change the name and call it 'The Elitist'.   

These fucking pud-yankers would just be called "food" if they had to live anywhere outside their Ivory Tower.

Hey, Diplomat:  the world ain't fair and it doesn't follow (western) legal constructs.  It's run by the only real rule there has ever been:  If you can take it and hold it, it's yours.  


Tue, 05/13/2014 - 22:52 | 4757593 Thanatos
Thanatos's picture

The "Diplomat" is an Information Operation, otherwise known as IO.

Information Operations

to influence, disrupt, corrupt or usurp adversarial human and automated decision making while protecting our own.

Information Operations (IO) are actions taken to affect adversary information and information systems while defending one's own information and information systems.
or rumors deliberately spread widely to influence opinions

It's a subset of Psy Ops.

Read all about it:

Tue, 05/13/2014 - 23:00 | 4757675 Mistress Raindrop
Mistress Raindrop's picture

Maybe the Japs could teach the Chinese how to be polite.  Bastards.

Tue, 05/13/2014 - 23:17 | 4757720 markmotive
Wed, 05/14/2014 - 03:57 | 4758045 intric8
intric8's picture

The u.s.'s Illegal meddling and provocations in ukraine has emboldened the chinese to also act in the interests of THEIR sovereignty. Its no different in principle from americas presence in ukraine. Its even MORE justifiable for the chinese because those waters are disputed!

Who gives a crap about defending the vietnamese anyways? Not the u.s., because they have little to offer us. Do they have a gas pipeline running through their country that supplies all of europe? Do they have a board position to offer bidens son? Do they have jews with billions in vietnam who need regime support to protect their money? Is that country a candidate for the IMF to leverage it to the hilt with loans that will take centuries to pay off? No no and no.

Anything goes now, boys! Were back to pre ww1! We'll all be cannon fodder at this rate!

Wed, 05/14/2014 - 09:21 | 4758451 old naughty
old naughty's picture

Salvage mission perhaps?

Wed, 05/14/2014 - 10:09 | 4758735 BigJim
BigJim's picture

Central planners are stupid. I see no reason why Chinese central -planners should be any different.

China's choice to bully a country that is not aligned with the US is likely to push its neighbours to deepen ties with the US. For all the US' 'weariness' it still has the most capable military in the world... sure, the US can't invade and hold territory very well. But wiping out another country's conventional forces? No problem. And what will the US' price for this protection be? Why, continue taking payments in USD, obviously. Or maybe allowing the NYFRB hold your gold in custody for 'safe-keeping'.

Traditional Chinese culture was destroyed by a lifetime of idiotic communism. Now they seem to be a nation of junk-producing Statist automatons. All this business about the Chinese thinking in terms of generations/centuries is just bullshit. Try using a typical 'Made in China' product for any length of time you'll see they've become very short-sighted indeed.

Wed, 05/14/2014 - 10:35 | 4758855 intric8
intric8's picture

Militarily, they have no worthy foes in the south china sea. The koreas wont give a rip. That leaves japan, malaysia, philippines, thailand, vietnam, sinapore and indonesia to side with the u.s. What the fuck does america have to offer these countries that will trump their economic dependence on china? Can we replace chinas cheap exports? We will go broke defending the entire region in a drawn out cold war with china, as if things arent worse enough in ukraine with russia.

Reagan outspent russia till they went broke and folded. Russia and china can now do the same to us.

Wed, 05/14/2014 - 11:10 | 4759014 0b1knob
0b1knob's picture

Why now and why Vietnam?

Vietnam has some history with the US.  The US would probably be inclined to help its little brother the Phillipines.  Vietnam?  Karma's a bitch.  And why now?  Because the US has a doofus as president that's why.

Wed, 05/14/2014 - 09:50 | 4758623 Citxmech
Citxmech's picture

The Oil War has been going on since before WWII - which was one battle.  What's coming is the final stages of that war - the desperate part.

Wed, 05/14/2014 - 09:46 | 4758569 HardAssets
HardAssets's picture

'Polite' like the Anglo-Americans have been in the Middle East since WW 1 ?

But no, that was for 'our' strategic interests.


And as for 'Jap' politeness regarding China . . . . you really don't know anything about history, do you ?   

Wed, 05/14/2014 - 07:23 | 4758184 lakecity55
lakecity55's picture

I just scanned down here to see if that is who it was. I am going to go back up and read it anyway.

Tue, 05/13/2014 - 21:52 | 4757469 smlbizman
smlbizman's picture

the diplomat.....check please..

Tue, 05/13/2014 - 22:06 | 4757502 CrashisOptimistic
CrashisOptimistic's picture

Yup, fast approaching as the source of the most pretentiously banal articles on ZH.

Tue, 05/13/2014 - 22:15 | 4757526 CrashisOptimistic
CrashisOptimistic's picture

They're just so monumentally full of themselves.

The damn thing cost between 500million and a billion dollars.  Why do you deploy it?  Anywhere?

To find oil, you fucking morons.  China imports 6 million bpd. Jesus.

Tue, 05/13/2014 - 22:44 | 4757618 Bindar Dundat
Bindar Dundat's picture

Why are we even worried about this. Aren't both countries our enemies?  

As we say in Canada == let em do each other in....

Wed, 05/14/2014 - 00:56 | 4757888 jaxville
jaxville's picture

Both countries are enemies to each other since Vietnam kicked over the Kmer Rouge in Cambodia some years back. Chinese troops invaded but were driven back with heavy losses by the Vietnamese Army.

  China, as are most Western nations; is on the brink of a total collapse of the credit based money system. Great privation is coming. War gets peoples minds off that privation and focuses blame on the enemy.

  We live in very dangerous times.

Wed, 05/14/2014 - 07:29 | 4758196 lakecity55
lakecity55's picture

That is exactly what I was thinking.

Haha, let the 2 go at each other. They did quite a few years back, too.

Tue, 05/13/2014 - 21:53 | 4757471 nmewn
nmewn's picture

Wi Ni Dat

Wed, 05/14/2014 - 03:53 | 4758043 Serenity Now
Serenity Now's picture


Wed, 05/14/2014 - 04:42 | 4758065 Mark Urbo
Mark Urbo's picture

Good one !


Vietnam needs to get its warships out there and threaten the oil rig - they need to grow a set...

Wed, 05/14/2014 - 07:31 | 4758197 lakecity55
lakecity55's picture

Yeah, the mighty Phan-Tom boats used in the Tonkin Incident.

Wed, 05/14/2014 - 10:00 | 4758671 youngman
youngman's picture

Its just a good thing they did not set up the rig in the Gulf of Tonkin....that could start something..

Tue, 05/13/2014 - 21:53 | 4757472 Hulk
Hulk's picture

Hmm, one gets the impression that Oil is very important to China..

Tue, 05/13/2014 - 21:58 | 4757484 nmewn
nmewn's picture

Crony communist chinese, the world is upside down  ;-)

Tue, 05/13/2014 - 22:13 | 4757522 Hulk
Hulk's picture

As someone has already stated months past, we are no longer fighting over political ideals, but real, tangible things like oil and reserve currency status...

Tue, 05/13/2014 - 22:22 | 4757551 CrashisOptimistic
CrashisOptimistic's picture


Scroll down the dropdown to China.  Look at that black line.

Do it for India too, while it's handy.

Tue, 05/13/2014 - 22:28 | 4757563 Hulk
Hulk's picture

explains much. coal imports to china are up huge. Thanks !

Tue, 05/13/2014 - 22:47 | 4757638 CrashisOptimistic
CrashisOptimistic's picture


China is the number 1 coal producer in the world.

In fact, number 2 is the US and number 3 is India, and if you add India and the US together, China's production is over 2X more than that sum.

And despite this, they import.  That's what all that population does.

Wed, 05/14/2014 - 09:53 | 4758620 HardAssets
HardAssets's picture

It was never about 'political ideas'

That's just bullshit to fool the 18 yr old cannon fodder.

(18 year olds have been brainwashed to be impressed by waving flags. They also think the new uniform will wow the girls and get them laid - since now they are 'men'.)

Tue, 05/13/2014 - 21:55 | 4757477 Rusty Shorts
Rusty Shorts's picture
We Are Going To Kill The Dollar

Tue, 05/13/2014 - 21:56 | 4757478 I Write Code
I Write Code's picture

Wau, wot a target-rich environment!  I think it's a challenge: wipe out all 86 in a time-on-target attack of less than three seconds.  For extra credit blind all unfriendly terrestrial and space views of the proceedings.  For double-secret extra credit use a neuralyzer so nobody remembers the 86 ships were ever there.

Tue, 05/13/2014 - 22:22 | 4757549 EverythingEviL
EverythingEviL's picture

Hilarious :) Neuralizer lol

Wed, 05/14/2014 - 00:28 | 4757849 TheReplacement
TheReplacement's picture

Did you use yours on yourself, again?  Yeah, everybody's got one.

Tue, 05/13/2014 - 21:56 | 4757481 RacerX
RacerX's picture

I wonder if Vietnam's Dong is having shrinkage problems now.

Tue, 05/13/2014 - 23:52 | 4757784 Harry Dong
Harry Dong's picture

Wobust as ever

Wed, 05/14/2014 - 03:39 | 4758038 intric8
intric8's picture

Oopsie. I entertained the idea that a few vietnamese could improvise a bunch of old landmines, cast off in a boat disguised as fishermen and blow the rig to smithereens.

I doubt they would get within ten miles of the rig before that dinghy full of gooks gets blown sky high out of the water. Back up plan?

Wed, 05/14/2014 - 07:49 | 4758222 Winston Churchill
Winston Churchill's picture

Flogmen with rimpet mines.

Tue, 05/13/2014 - 21:59 | 4757489 JJdog
JJdog's picture

The US is not stupid enough to send troops to Vietnam again, oh but we have a clueless clown for president, he will send the ObamaCare website crew to Vietnam soon as the website is working. :)

Tue, 05/13/2014 - 22:48 | 4757643 ObamaDepression
ObamaDepression's picture

Maybe his wife will start abother Twitter campaign?

Tue, 05/13/2014 - 22:04 | 4757499 thamnosma
thamnosma's picture

There are clearly some major global geo-political changes occurring.  The West's years of debt, overspending, welfare-warfare economy and a corrupted financial system was inevitably going to lead to changes.  However, it is also unfortunate that such a weak narcissist is running the nation during the transition.  The situation becomes more open to a major mistake with a regime like we have in DC now.

Tue, 05/13/2014 - 22:21 | 4757545 Debeachesand Je...
Debeachesand Jerseyshores's picture

A very dangerous situation thamnosma,that's for sure.


Tue, 05/13/2014 - 22:07 | 4757510 suteibu
suteibu's picture

It's a game between Putin and Xi to see who can make Obama look more like a mom's-jeans-wearing pussy.  The first one to incite a public temper tantrum wins.

Tue, 05/13/2014 - 22:08 | 4757512 Jugdish
Jugdish's picture

Send John Kerry to sort it out. He served in Vietnam.

Tue, 05/13/2014 - 22:23 | 4757552 Tanz der Lemminge
Tanz der Lemminge's picture

Got purple hearts too.


If you forget, he'll be more than glad to remind you.

Tue, 05/13/2014 - 22:53 | 4757659 sodbuster
sodbuster's picture

If you want to see shit get really interesting, send Joe "the Clown" Biden.

Tue, 05/13/2014 - 23:19 | 4757732 Terminus C
Terminus C's picture

Nah, his son's already busy.

Wed, 05/14/2014 - 00:16 | 4757825 Dexter Morgan
Dexter Morgan's picture

Yes, and send Pelosi and Reid with him.  That should scare the hell out of 'em.

Tue, 05/13/2014 - 22:10 | 4757517 mendigo
mendigo's picture

It this point what could obama really say in response to a blatant disregard for the rights of another sovereign nation. Basically its time for the big boys to simply agree on how to divide up the world. I suspect that obama was advised of intent to proceed and he did not object too strenuously. 

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