UNCLAS SECTION 01 OF 04 HANOI 000366

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PREL ETRD PBTS CH VM ARF CVR ASEAN
SUBJECT: NSC Senior Director Michael Green Discusses China
with Senior Foreign Relations and Think Tank Officials

Reftels: A. Hanoi 247 B. 04 Hanoi 2795


1. (SBU) Summary: The complicated Vietnam-China relationship
is at a relatively weak point, with the traditional
friendship of the two ruling Communist Parties tested by
bilateral incidents and rising distrust of China's motives
in Asia, according to Vietnamese think tank and foreign
policy officials. Some members of the GVN and Communist
Party of Vietnam (CPV) believe that China wants peace and
stability in the short term to advance its economic
development goals, but has not done enough to prove its good
intentions, and others believe that Vietnam has more to gain
from a close relationship with the United States than with
China. End Summary.


2. (SBU) Visiting NSC Senior Director for Asian Affairs Dr.
Michael J. Green had lunch February 4 at the Ambassador's
residence with Mr. Bui The Giang, Director, Department of
People to People Relations, External Relations Commission,
Communist Party of Vietnam (CPV); Dr. Do Tien Sam, Director,
China Studies Institute; Mr. Nguyen Vinh Quang, Director,
China and North East Asia Department, Commission for
External Relations, CPV; Dr. Nguyen Thiet Son, Director,
Center for North America Studies; and, Ambassador Trinh
Quang Thanh, General Director, Institute for International
Relations, Ministry of Foreign Affairs (MFA). The
Ambassador, Poloff and A/PAO also attended. The lunch
covered a range of strategic issues but focused most heavily
on China and U.S.-Vietnam relations.

Communist Parties are Close; People, not so Close
-------------- --------------


3. (SBU) The China Institute's Dr. Sam started with a
description of Vietnam's long and tangled history with
China, and noted that the Chinese Communist Party (CCP) has
"long and deep" relations with the CPV. The Vietnamese
people have a somewhat more complicated relationship with
China, Sam said. "In the past, when we were in a different
situation, China and Vietnam provided mutual assistance.

Later, we were in a period when relations did not proceed as
normal, and that period reached its peak with a war. Today,
we are again developing towards mutual cooperation."


4. (SBU) The most important factor in the Vietnam-China
relationship, Sam said, is China's astounding economic
growth. That growth is attractive to the Vietnamese people,
especially to young people. The CPV's Giang, interjecting,
noted that there are no surveys of public opinion of China
that disaggregate data by generation, so it is difficult to
prove that assertion. The CPV's Quang said he believes
there is a range of views on China, but that attitudes are
determined by subjective prejudice and the kind of
information the people receive about China. Young
Vietnamese people and old Vietnamese people harbor
"prejudice and negative feelings" in equal amounts, Quang
stated. Whatever the generational attitudes, Sam
stipulated, the important factor is economic growth and
development. "China and Vietnam are carrying out a
simultaneous economic reform and development agenda," he
said, "and we both need a peaceful and stable environment to
carry that out." Since the 16th CCP Congress, China has
been more actively engaged internationally, Sam noted.
There has been a change in priorities in favor of what Sam
called "neighbor countries," which do not necessarily share
a border with China. The main characteristics of neighbor
countries, Sam explained, are that they are politically
reliable, provide a market for Chinese goods and participate
in "shared security." The purpose of this policy is for
China to "break through the blockade," Sam said, a desire
that also motivated China's proposal to create a China-ASEAN
free trade area.

Key Issue: Territorial Competition
--------------


5. (SBU) Although Vietnam is definitely included in China's
list of "neighbor countries," some bilateral issues remain,
Sam continued. Competition between China and Vietnam in
certain areas is fierce. Territorial issues are the most
visible of these, with "considerable" problems remaining
that are "not easy to engage on." Many of these issues are
also driven by China's economic growth, which has created a
massive demand for energy resources. "Sixty percent of
China's energy needs are currently supplied from the Middle
East," Sam said, "which is something the Chinese do not
like. They need to diversify their energy sources and they
believe the East Sea (South China Sea) is a major potential
source of oil and gas." This in turn creates tensions with
Vietnam, which considers the Spratly Islands region of the
South China Sea to be Vietnamese territory. Vietnam is
conflicted about how to handle energy exploration in the
South China Sea in the absence of an agreement on who owns
the resources, Sam said. China and the Philippines
announced an "open agreement" on oil and gas exploration in
the South China Sea and invited Vietnam to participate, an
invitation that is "under consideration" by relevant line
agencies in the GVN.


6. (SBU) Fishing in the Tonkin Gulf and elsewhere in the
South China Sea also creates problems, Sam continued. The
recent incident between Chinese Maritime Police and
Vietnamese fishermen that resulted in nine deaths (Ref. A)
was "regrettable" and should not be used to provoke
hostility against China. Sam acknowledged the difficult
history between China and Vietnam, noting that in the 2,200-
year history of China-Vietnam relations, 1,200 of those
years have been spent at war. Of 17 wars in the history of
Vietnam, 12 were with China, "in which Vietnam was defeated
twice." The result of those defeats was what the Vietnamese
still refer to as "the 1,000-year domination." The point is
that it is very dangerous to "provoke nationalist hostility"
between China and Vietnam, Sam concluded.


7. (SBU) Giang noted sourly that Vietnam has fishing
disputes with four other countries (the Philippines,
Thailand, Malaysia and Indonesia), all of which were worked
out peacefully without the deaths of Vietnamese fishermen.
Admittedly, three of the Vietnamese boats were "doing things
inappropriately," but the Chinese reaction was still
excessive. Giang blamed the exacerbation of Vietnamese
public hostility on overseas Vietnamese who had made a point
of demanding publicly that the Vietnamese Government react
to the incident and force the Chinese Government to
compensate the families of the fishermen who died in the
clash. "We could be working fairly and squarely with the
Chinese," Giang said, "but the Viet Kieu (overseas
Vietnamese) make it very difficult." The reality is that
Vietnam can always increase its number of international
partners, but it cannot increase its number of neighbors.
Vietnam is stuck with China and had to find a way to live
with China peacefully. China, Giang noted, claims it is
"rising peacefully" but has not yet "earned that privilege
through responsible action." The Institute for
International Relations' Ambassador Thanh agreed, saying
that China needs a peaceful environment in which to conduct
its economic development and so should be willing to
contribute to that environment.

Regional Architecture
--------------


8. (SBU) Regional architecture systems in Asia have until
recently been based around ASEAN, Thanh observed, but China
wants to change things so that "ASEAN is not driving." Dr.
Green observed that if APEC is strong, then the East Asia
Summit (EAS) will become a complementary process. Giang
said this is a possibility that drives GVN thinking, as
well.


9. (SBU) China plays an important role as the economic rival
of Southeast Asian countries, the Ambassador observed. To
avoid being overwhelmed by "the world's manufacturing
platform," the countries of ASEAN should become more nimble
than China, increasing intellectual property rights
protection, reducing barriers to trade and improving the
investment environment. In this way, ASEAN could become a
place "where investment is easy." Giang noted that the
consensus-driven decisionmaking process in ASEAN means that
cooperation is easiest "where we have commonalities." Dr.
Green noted that ASEAN's internal differences and consensus
structure are weaknesses that China does not share. Giang
responded that other consensus organizations, such as the
Asia-Europe Meeting (ASEM) are able to accomplish a great
deal. ASEM's approach to Burma's participation in the Hanoi
summit last year (Ref. B) was the best example, he said.
"It was a problem, but it was surmountable."

China-Vietnam-United States Triangle
--------------


10. (SBU) Dr. Green observed that there is a "feeling in
Washington" that Vietnam resists developing strategic
relations with the United States "out of concern for China's
reaction." Not so, Giang replied quickly. "Vietnam must
conduct a balancing act," he explained. "We are cautious
not out of fear of destabilizing relationships, but out of
fear of being misinterpreted." The Ambassador noted that
the number of U.S. Navy ship visits to Vietnam is kept
artificially low "out of concern for China" and said that
the United States would like to do more. Dr. Son explained
that bilateral relationships with China and the United
States are very important to Vietnam, and the relationship
between the United States and China is also of great
interest. "In Vietnam we have a saying," Dr. Son intoned,
"when your friends go out together, stay back and study, and
you will get better grades than either of them." The North
America Studies Center's Dr. Son said he believes that China
is highly motivated to maintain peaceful relations with the
United States at a time when it is trying to modernize and
increase development. "In our war with the French," Dr. Son
said, "we were forced at one point in 1946 to accept an
agreement. We signed that to give us time to increase our
strength and later fought back and won." Dr. Son believes
that China is doing the same with the United States,
maintaining good relations no matter what during a period of
relative weakness. "When the United States fired rockets at
the Chinese Embassy in Serbia," Dr. Son explained, "I told
my friends that there would be a strong reaction from China
but that relations would improve again quickly."

Vietnam's Impression of U.S.-China Relations
--------------


11. (SBU) Dr. Son also believes that the United States has a
reasonable and moderate policy towards China. "The United
States helps China to modernize. You supported China's
accession to the WTO. You provide good support to China's
war on terrorism and praise China's willingness to cooperate
on terrorism. You speak more softly to China about human
rights and religious freedom than you do to Vietnam, and you
do not let Taiwan interfere in U.S.-China relations," he
observed. Vietnam should learn lessons from this, Dr. Son
said. "ASEAN is a good organization, but it is not
monolithic and even if it were, all the resources and
strengths combined do not equal the United States or China.
Working within APEC is slow, despite the leadership role of
the United States." Vietnam should try to cooperate more
with countries who are in a position to help Vietnam to
develop, something China cannot do. "China does not have
the technology or level of development to help Vietnam," Son
said. "Only the United States does. Vietnam highly
appreciates this, as well as the fact that 25 percent of
Vietnamese trade turnover is with the United States. If the
United States can focus its future cooperation on economic,
social and security issues, it would be good," he said.


12. (SBU) After noting that the United States does not
"speak more softly" to China than Vietnam about human rights
and religious freedom, Dr. Green said that development
changes countries and that the United States expects that
China, too, will change. During that change process, the
United States is committed to maintaining positive relations
with China and keeping Asia strong so that China will join
with Asia and not the other way around. (Note: The
assembled Vietnamese guests were nodding at this point,
though they did not interject. End Note.) The response to
the tsunami disaster was revealing about China, Dr. Green
said. The paltry Chinese offer of assistance, a mere USD
2.5 million, was a small fraction of what the Chinese could
afford, but it represented the maximum amount for which the
Chinese government could obtain internal consensus.
"China," Green observed, "has a very large presence in Asia,
but a limited amount of flexibility." Agreeing vehemently,
Giang added, "China is not just one, but many countries if
you consider the inconsistencies in its internal
development." Green continued, "China has internal concerns
about which it is very insecure, such as Tibet and Taiwan.
The lesson of history is that the region needs China; but
now, China truly needs the region and for that reason,
Vietnam can and should approach China with confidence." To
a chorus of agreement from the Vietnamese guests, Dr. Green
concluded: "Despite the concerns in the Central Highlands,
Vietnam's territorial integrity is quite solid. But I do
not know if China can have the same confidence."


13. (SBU) Comment: Dr. Green tapped into a vein of distrust
of China that was unusual both for its vehemence and for the
fact that it was shared openly with Americans in front of
other ranking Vietnamese officials. It appears that recent
bilateral incidents have had an effect on Vietnamese
attitudes. End Comment.


14. (U) Dr. Green cleared this message.

MARINE