Identifier
Created
Classification
Origin
05HANOI1143
2005-05-17 08:07:00
CONFIDENTIAL
Embassy Hanoi
Cable title:  

VIETNAM AND CHINA: COMING AROUND WARILY

Tags:  CH MOPS PGOV PREL SENV TW VM CVR 
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This record is a partial extract of the original cable. The full text of the original cable is not available.


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C O N F I D E N T I A L HANOI 001143 

SIPDIS


E.O. 12958: DECL: 05/16/2015
TAGS: CH MOPS PGOV PREL SENV TW VM CVR
SUBJECT: VIETNAM AND CHINA: COMING AROUND WARILY

REF: A. HANOI 247 B. 04 HANOI 2745 C. IIR 6 950 0016
05 D. IIR 6 950 0027 05

Classified By: Charge D'Affaires John Boardman. Reason: 1.4 (D).

C O N F I D E N T I A L HANOI 001143

SIPDIS


E.O. 12958: DECL: 05/16/2015
TAGS: CH MOPS PGOV PREL SENV TW VM CVR
SUBJECT: VIETNAM AND CHINA: COMING AROUND WARILY

REF: A. HANOI 247 B. 04 HANOI 2745 C. IIR 6 950 0016
05 D. IIR 6 950 0027 05

Classified By: Charge D'Affaires John Boardman. Reason: 1.4 (D).


1. (C) Summary: After a rocky six months (ref A),China and
Vietnam are knitting relations back together. An exchange of
leader visits is in the works, the GVN is looking forward to
a China-hosted conference on the Mekong and the Chinese
Minister of State Security recently visited Vietnam for talks
on sensitive security issues. Scholarly and ideological
exchanges have carried on throughout, focusing on the
challenges for continued regime maintenance on both sides;
the pros and cons of economic liberalization and development;
and, the inescapable fact of American dominance on the world
stage. Positive steps are tempered, however, by suspicion:
Vietnam's decision to participate in the joint seismological
survey in the South China Sea was made reluctantly, and some
in the Ministry of National Defense are concerned that China
may be planning military moves in the Spratlys, including
attacking a Taiwan-held island. End Summary.

HIGH LEVEL VISITS
--------------


2. (SBU) Various sources in the GVN, including the Ministry
of Foreign Affairs (MFA) China Desk, confirmed that Vietnam
and China are actively planning to exchange leadership-level
visits beginning in the second half of 2005. After being
frustrated in their efforts to nail down a visit by Chinese
President Hu Jintao during the October visit of PM Wen Jiabao
(ref B),in late 2004 Vietnam persuaded China to commit to a
Hu visit in March of 2005, according to the Japanese Embassy
in Hanoi. Following the January 8 incident in the Gulf of
Tonkin when Chinese maritime police clashed with Vietnamese
fishermen, killing eight (ref C),the Chinese reportedly told
the GVN the Hu visit would have to be rescheduled. (Note:
GVN officials would not confirm this version of events, or
even that a Hu visit had been scheduled at all for March.
End note.) Hu's new date is not set, but Chinese and
Vietnamese officials said it would occur in the "second half

of 2005." A visit by Vietnamese State President Tran Duc
Luong may happen in the next three months (Institute for
Chinese Studies),or it may happen in early 2006 (MFA China
Desk).


3. (SBU) Dr. Do Tien Sam, head of the Chinese Studies Center,
told Poloff that in June or July the Chinese PM will host a
Greater Mekong Subregion conference in Yunnan Province to
discuss problems related to the Mekong River. All of the
Prime Ministers of the downstream countries will be invited
to the conference, Dr. Sam said. "The meeting was requested
by the downstream countries," Dr. Sam observed, "and China's
decision to hold the meeting demonstrates China's willingness
to address the concerns of downstream countries. The
province of Yunnan has plans to build hydroelectric dams on
the Mekong, with potentially serious effects for us. But
downstream countries recognize that no solution is workable
without Chinese participation."

SECURITY COOPERATION
--------------


4. (C) The recent marquee event in Sino-Vietnamese relations
was the visit to Vietnam of Minister for State Security (MSS)
Xu Yongyao, the first time a Chinese Minister of State
Security has visited Vietnam. Vietnamese Ministry of Public
Security (MPS) official Tran Van Trinh told Poloff that the
visit, which was reciprocating a visit to China in 2003 by
Vietnamese Minister of Public Security Le Hong Anh, was
positive and that the two sides had signed "an agreement
highlighting our very good cooperation." Trinh said the
agreement covered "the security side" and complemented
"another subagreement" with China signed last year covering
the police sector. Together, the two agreements commit both
sides to close cooperation on crime prevention,
counterterrorism, counternarcotics and anti-trafficking in
persons. Both sides have also committed to "cooperate in
protecting social order and security in border areas," Trinh
said. He further described the agreements as "a general
framework containing a commitment to cooperate on
transnational crime issues and for China to provide
assistance to Vietnam on capacity building." The only
specifics in the agreement, he said, were in the section
identifying communications channels between the two
Ministries. (Note: Neither Trinh nor any of our contacts in
the Chinese Embassy would provide a copy of these "sensitive"
agreements. End note.)


5. (C) A Chinese national source added that the Chinese were
unpleasantly surprised by the GVN's decision to announce in
the press what was supposed to be a secret visit. Xu's
delegation included the director of MSS's Bureau of
Intelligence, the director of MSS's Bureau of International
Cooperation, and the Security Bureau directors of Guangxi and
Yunnan provinces, the source said. The agreement Xu signed
is the fourth security-related agreement China has signed
with Vietnam, following agreements signed with the Chinese
Ministry of Defense (MOD),Ministry of Foreign Affairs (MFA)
and Ministry of Public Security (MPS),he explained. The
agreement covered intelligence exchange; a regular exchange
of visits "at the leadership and scholar levels;" "security
equipment" Vietnam wanted to purchase such as recording
equipment, typing equipment, reconnaissance equipment, and
"general equipment;" and, a commitment to cooperate in the
fight against transnational crime. In all, the source
assessed, it was a successful visit.

DEFENSE COOPERATION
--------------


6. (C) Bilateral defense cooperation remains cool and
measured, resting entirely on the framework of the October
2003 Memorandum of Cooperation (signed by the MND in 2004)
spelling out the mechanism for interaction between China and
Vietnam's Ministries of Defense. In April 2005, the PAVN's
Deputy Chief of General Staff visited his counterpart in the
PLA (ref D). We have no details on any outcomes of this
visit, which the Vietnamese MND characterized only as
"maintaining the relationship." In the last year, there have
been no bilateral defense-related contacts other than those
specifically cited in the 2003 Memorandum.

IDEOLOGICAL COOPERATION/SCHOLARLY EXCHANGE
--------------


7. (SBU) As both China and Vietnam grapple with the
contradictions inherent in attempting to maintain a
traditional communist political system while encouraging
free-market-driven economic growth, ideological cooperation
and scholarly exchange remain an enduring bright spot in
bilateral relations. The Presidents of China and Vietnam
will have the "important task" of addressing basic
ideological issues, Dr. Sam said. "We have no choice," he
said, "bilateral cooperation has to become more
comprehensive in light of problems of market openness and
economic development." It falls to the State Presidents, he
continued, to address the question of whether it is possible
to combine socialism and a market economy.


8. (SBU) Vietnamese and Chinese scholars and government
officials, as well as Party officials, frequently exchange
ideas on these subjects, Dr. Sam said. Regardless of the
state of bilateral relations, the ideological conversations
continue. "Vietnam and China learn from each other. Vietnam
in particular looks to China to learn how certain economic or
political initiatives will affect society." Dr. Sam provided
illuminating detail on the topics of conversation between
Chinese and Vietnamese scholars and government-supported
thinkers.

Private sector development vs. encouraging SOEs
-------------- --


9. (SBU) Both China and Vietnam agree that the State sector
plays a key role in the economy, Dr. Sam said. China has
"taken many measures" to develop the private sector and plans
that in 5-10 years the private sector will contribute 60
percent of GDP. In formal papers, Chinese scholars write
that the State sector is key; in reality, the Chinese
government actively encourages the private sector, he noted.
Vietnam also says officially that the State sector plays a
key role, but in reality encourages the private sector.
Increasingly, in both countries, the private sector complains
about the uneven playing field with State-owned enterprises
(SOEs).


10. (SBU) This issue is a major subject for exchange and
discussion between Vietnamese and Chinese experts, Dr. Sam
said. "Should we keep this idea of saying the State plays
the key role? That implies the official prioritization of
SOEs in economic development. We need a breakthrough in our
ideological thinking. In a market economy, all players
should be equal. The challenge that (Chinese and Vietnamese
thinkers) face is how to express these ideas with a proper
socialist orientation."

Rule of law
--------------


11. (SBU) The second major subject of dialogue and exchange
among Chinese and Vietnamese intellectuals and Party members
is rule of law, Dr. Sam continued. "Both countries say
explicitly they are trying to build rule of law. But there
are contradictions. Rule of law implies a nation of a
constitution and laws. But we are one-party states, so how
can we say we recognize rule of law? In China people say
rule of the Party is higher than the rule of law or the
rights of people. All branches of government are controlled
by the Party. In the United States, the branches are
independent and the supreme power is the Constitution.
Regardless of the party the President comes from, he must
work under the Constitution."


12. (SBU) "In Vietnam and China," Dr. Sam observed, "the
branches are not independent and must coordinate in
accordance with a mechanism controlled by the party. It
isn't even an effective coordination system. To move towards
a market economy, we need to strive for rule of law, but what
a rule of law country is remains unclear to us. These are
issues Vietnam and China are exploring together."

Social consequences of economic development
--------------


13. (SBU) For the past 20 years, Vietnam and China have
focused on building their economies, with success in
promoting economic development but with some problems as
well, Dr. Sam said. In China, problems have fallen heavily
on rural areas as rapid urbanization has caused farmers to
lose land; in 2004 more than 40 million Chinese farmers lost
land and were compensated at "low rates," he explained.
Worse, as much as 15 percent of the limited compensation
farmers did get was siphoned off by "local and state agents."
The Chinese people criticize their government, Dr. Sam said,
because "the farmers don't have fields, the workers don't
have jobs, and the people don't have social security." The
same issues are beginning to confront Vietnam, Dr. Sam said,
"and, if we ignore them, dangerous instability will follow."


14. (SBU) "Farmers represent 80 percent of our population,"
Dr. Sam continued. "Fifty percent of those are subsistence
farmers who produce no surplus. They have nothing with which
to participate in the market and do not benefit from
market-based reforms. All these people see is an increasing
gap between what they have and what the rich have."
Addressing this potential threat to social stability and to
the people's confidence in the regime is a very important
topic of discussion between Vietnam and China, he noted.


15. (SBU) "Our other common interest is corruption, which has
reached the level of a national disaster here and in China,"
he continued.

The international situation
--------------


16. (SBU) Chinese and Vietnamese scholars and thinkers spend
a great deal of time analyzing global trends and politics, in
particular the role of the United States, Dr. Sam said. Both
countries agree that "multipolarization" is both desirable
and difficult. Practically, Vietnam and China have to
acknowledge that there is only one pole - the United States.
"The United States has an economic, political,
technical/scientific and military advantage," Dr. Sam
explained. "Acknowledging this is a new aspect of bilateral
relations between Vietnam and China. Before we only
acknowledged the economic, technical and military advantage
of the United States. Now we acknowledge cultural and
political dominance as well." Chinese scholars and
government officials admit that the U.S. political system is
"optimal," Dr. Sam said, "and for the next 25 years no one
will be able to counterbalance that advantage. We agree with
that assessment."

JOINT EXPLORATION IN THE SPRATLYS
--------------


17. (SBU) Vietnam's announcement earlier this year that it
would join an announced China-Philippines joint seismological
survey expedition in the South China Sea came as a surprise
to some within the GVN. Dr. Sam characterized it as a
"positive development," but acknowledged that the GVN had
stalled as long as possible before finally agreeing to
participate, having given up on the possibility that the
expedition would not go forward. "If Vietnam does not
participate, China will continue to exploit these oil
resources with other bilateral partners, and Vietnam's stocks
of oil will be depleted by China's straw in our teapot," Dr.
Sam said.


18. (C) A Chinese Embassy source explained to Poloff, "once
we got the Philippines to agree, Vietnam had no choice.
Refusing to participate would weaken their claims over
economic resources. Joining us is an admission that we have
the right to be there. When they realized they could not
prevent the expedition, they decided it was better to join
it."

VIETNAMESE NAVY SEES POSSIBLE CHINA-TAIWAN SPRATLYS CLASH
-------------- --------------


19. (C) An SRV Navy officer working in the Ministry of
National Defense explained that Vietnam knows "from long
experience" that China balances positive and peaceful actions
and statements with aggressive or confrontational moves, a
dialectic the Vietnamese call the "look East, hit West"
policy. In the current environment, the Vietnamese Navy's
assessment, according to this officer, is that China will as
a "next step" follow up the tripartite seismological
expedition with an attack on Taiwan forces occupying the
"Peace" island (aka Itu Aba island, located at 114 degrees 22
minutes E longitude and 10 degrees 23 minutes N latitude).
In addition to "advancing Chinese control over the Spratlys,"
this action would "provide China with valuable information
about the nature and extent of U.S.-Taiwan military
cooperation and coordination without a significant risk of
U.S.-China conflict," the officer said, because "the United
States would not involve itself in Spratlys disputes." The
next step after that, he continued, would be the occupation
of Vietnamese-held islands. (Note: We have not been able to
corroborate this officer's statement, and we note that
defending Vietnam's claims over the South China Sea is a
substantial part of the Navy's reason to exist. Assessments
of potential Chinese naval action in the South China Sea
would support the Vietnamese Navy's requests for resources
and position within the military hierarchy. These factors
could affect the Navy's conclusions about China's intentions;
additionally it is possible that this officer was expressing
his own opinion and characterizing it as that of the Navy.
The comment is useful mainly to illustrate the level of
mistrust of China that exists in the Vietnamese military.
End Note.)

COMMENT
--------------


20. (C) Broadly and generally speaking, the attitude of the
Vietnamese power structure towards China is split. On one
side are self-proclaimed nationalists, often connected with
the military, who see China as a threat to Vietnam's
sovereignty and territorial integrity. On the other side are
those who see close relations with China as the best way to
guarantee continued economic development and the maintenance
of CPV power. These two sides balance each other: the
military remains vigilant against encroachment on Vietnamese
territory, and the Party actively pursues closer ties and
dialogue. While we do not see a momentous or enduring shift
in GVN-Chinese relations, things have definitely improved
since the glacial conditions that prevailed after the fishing
boat shooting incident in January 2005. This has been a
result of conscious effort by the GVN, which strives to
maintain stable and friendly relations with China and the
United States simultaneously.


21. (C) Comment continued: Dr. Sam's description of recent
ideological and scholarly exchanges between China and Vietnam
is interesting because of the acknowledgement of corruption
as an internal threat to both the CPV's and CCP's hold on
power, and the assessment of the power and "optimal
character" of the political system and culture of the United
States. The last time we asked about China-Vietnam
ideological exchange (in February 2004),our Vietnamese
interlocutors would admit only to discussing issues that fall
comfortably within the boundaries of orthodox
socialist/Communist Party doctrine, such as resolving social
inequalities and recruiting high-quality cadres. Our more
recent conversation indicates that the China-Vietnam dialog
has matured considerably and become more realistic. End
Comment.
Boardman


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