This article on the site China-defense-mashup says that a war between Vietnam and China is inevitable.
The stake is the oil of the South China Sea.
The reserve are anywhere between 105 to 213 billion barrels of liquid gold deposited in the region—well-exceeding 80 percent of the entire Saudi kingdoms' reserves, according to Chinese estimates, says the author of the article.
One remembers that in 1979, China decided to invade Vietnam and ultimately got 'a bloody nose' (some 20,000 Chinese PLA soldiers died).
Strangely, the Sino-Vietnamese War started a month after the beginning of China's 'opening'.
On December 18, 1978 , Deng Xiaoping climbed the rostrum for the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China to declare an open policy.
This decision was to change the face of China forever.
But the question comes: why to start a War against its arch Communist enemy Vietnam at that particular time?
This has never been elucidated.
And why to attack Vietnam when Indian Foreign Minister Atal Bihari Vajpayee was on official tour in China (the first of a senior Indian official after 1962 Sino-Indian War).
I quote here from Vajpatee Statement in the Rajya Sabha on February 20:
May I recall to the House that after the reports of the massive attack by the Chinese troops across the Sino-Vietnamese border, the Prime Minister had, on February 18, issued a statement of our reactions to these developments? The Statement expressed our profound shock and distress at the outbreak of hostilities which could endanger international peace and security. It also made an earnest plea for the immediate restoration of peace and, as a first step towards cessation of hostilities, underlined the urgent need for the withdrawal of Chinese forces from the Vietnamese territory.
I myself heard of these developments late in the evening of February 17, when I was 29 in Hangchow, through a news agency report and the international radio network. As I was not near any of our diplomatic missions, I tried to gather as much firm information as possible. When reports confirmed these grave developments, I decided immediately to cancel the remaining programme of my stay in China and sought the help of the Chinese authorities to get to Hongkong and to return to India the same day.
Our serious concern at these developments was conveyed to the Chinese authorities in Peking through the Chinese Ambassador to India, who was accompanying our party on the tour in China early on February 18 before we left Hangchow.
The situation in Indo-China has been tense and inflamed for the last few months. This had caused set back to the process, which at one time looked hopeful of co-operative relations being developed in the South East Asian region. Being already a serious focus of tension, the situation in Indo-China figured at some length in my discussions with the Chinese leaders in Peking. The Chinese side, in explaining their viewpoint, had mentioned that there were provocations and threats along their border with Vietnam.
From my side, I had even then expressed our concern at the possibility of deterioration of the situation and its dangerous consequences. I sought to impress on the Chinese leaders that any escalation would be serious and urged that the problem should be solved peacefully through negotiations. I added that the aggravation of tensions in an already complex situation could be a setback to stability in South-East Asia and endanger international relations in general.
According to the Vietnam official statement conveyed to the Ambassadors of various countries in Hanoi on February 17, China had used troops, tanks, long range artillery and war planes for the attack along the entire length of the border. They had occupied border posts along the border in the Vietnamese provinces of Long Son, Hoang Lien Son, Lai Chau, and Quang Ninh.
In any case, as stated by the Prime Minister, we are distressed and shocked at these developments. The present aggravation of the situation is and must be a matter of grave concern to the entire international community. This escalation, with massive armed incursion across the Sino-Vietnamese frontier, must be arrested and reversed as soon as possible, lest there should be further widening of the conflict and danger to world peace.
I should like to add that India has long admired Vietnam for its heroic struggle against the heaviest possible odds for its national independence which culminated eventually in victory against imperialism and intervention. We had responded as generously as to any country and as quickly as any nonaligned nation, to take a hand in the gigantic task of economic rehabilitation and national reconstruction which faced the Socialist Republic of Vietnam. We remain as committed as ever to develop friendly relations with Vietnam.
We want to eventually see peace and stability made secure so that nations in their independence can resume economic cooperation in the region. India had no ulterior interest in South East Asia, but as in the case of the Indian sub-continent, we would like to see the chapter of outside competitive involvement come to an end.Today, a War can certainly be avoided; if all parties decides so; in any case, it is far from certain that China would win so easily.
Another interesting 'coincidence', Deng Xiaoping had called Gyalo Thondup to Beijing in February to find out a way to sort out the Tibetan issue.
When I asked Gyalo Thondu: "When you met Deng Xiaoping in 1979, did you know that Vajpayee was there about the same time? It was the first visit of an Indian minister after 1962 war?", the Dalai Lama's brother remembered:
Yes, Mr Vajpayee visited China and at the same time, a war between Vietnam and China started and the Indian Foreign Minister cut his trip short. I was supposed to proceed to China with the permission of His Holiness the Dalai Lama and because Mr Deng Xiaoping had asked me. Some of my friends in Hong Kong told me: “Don’t go, China and Vietnam are fighting a war. It would be very dangerous.” I told my friend: “No matter how much danger, I will not cancel my trip because I already promised Mr Deng Xiaoping. I had the permission of His Holiness and I had told Mr Deng Xiaoping that I was coming, so I went”.
I waited for him because he was not in Beijing. He had gone to Guangzhou to be operated and he directed the war from there. So, I had to wait in Beijing for one month. I had a very good time, I visited all the places, though I am quite familiar with Beijing in 1946/47 I was there for a long time.Since this fateful month, no progress has been recorded in the relations between the Dalai Lama and the leaders of China.
The "Open Policy' was economic only.
Why A War Between China And Vietnam Is Inevitable
August 2, 2011
Now Much to China's dismay, the South China Sea dispute has become an open-house party: the US is invited by many to host the show, and even China's arch rival India will tag along. The biggest allure for the party is oil, anywhere between 105 to 213 billion barrels of liquid gold deposited in the region—well-exceeding 80 percent of the entire Saudi kingdoms' reserves, according to Chinese estimates.
The regional mess proves Beijing's policy of "shelving disputes and developing jointly" is a total failure. In Territorial Disputes, sovereignty is a fiat currency solely backed by the economic and military might. Otherwise it's simply bluff. Diplomacy and Economic ties alone will never win China the south China sea.
To solve the territorial dispute, Sino-Vietnamese war seems inevitable. It's also the most cost-effective way for China to sort out the mess once and for all. The only thing that matters right now is the timing and how the US will factor in this event. We are going to look into the dynamics how this volcano is going to erupt:
The fragile Vietnamese economy hugely depends on the South China Sea oil production, which accounts for 30% of its GDP. Vietnamese economy will collapse if it loses its oil assets in the region. Vietnam is in dire straits: The inflation is running rampant while the consumer price index rose 20.82 percent in June from a year ago, the fastest pace since November 2008; The bank system is teetering with bad loans amid tight monetary conditions and busting economic bubbles; the widening trade deficit has eroded the country's foreign-exchange reserves—estimated at $12.2 billion at the end of 2010, down 53% from the peak of $25.8 billion reached February 2008, which will deter foreign investment, worsen liquidity and increase systemic insolvency. All this will seriously aggravate social unrest and threaten the communist regime. Therefore, Stoking tension with China will be a good way for Hanoi to direct national grievance away from its domestic mismanagement and vindicate its legitimacy of rule with patriotism and even war. To Hanoi, the South China Sea is worth shedding blood for.
Now let's look at this from Washington's perspective: the diminishing American economic influence in Asia-pacific will force the US to sustain its engagement with the region in alternative capacities, for example, maintaining military power balance. China now serves as the hub for the region's global supply chain, gobble up components, commodities and capital goods and is coming into its own as a vital pillar of support for the region's economies, particularly at a time Western demand is lagging. "According to ASEAN statistics, China's trade with ASEAN has jumped six-fold since 2000 to US$193 billion in 2009, surpassing that of the US. China's share of Southeast Asia's total commerce has increased to 11.3 percent from 4 percent in that time, whereas the US's portion of trade with the bloc fell to 10.6 percent from 15 percent. During that time, ASEAN's trade plus with China widened by five times to US$21.6 billion. The bloc reported a US$21.2 billion trade surplus with the US in 2009, down 12 percent from 2000." China is also a very important source of investment and the largest source of foreign tourists in the region. Meanwhile, Asia today is the region with the highest increase in defense spending in the world, and that combined with China's skirmishes over territory disputes with Japan, Vietnam and Philippine, etc. present the US Military–industrial complex with a grave challenge and perfect opportunity. The South China Sea dispute offers the US a golden opportunity to come back to Asia, talk about friendship, energy deals and arms sales.
Now let's look into the stakes for Beijing: the energy-intensive nature of Chinese Economy will underwrite the assertiveness of China's south China sea stance and naval force buildup. " China's oil reserves have shrunk almost 40 percent since 2001 as the economy expanded 10.5 percent a year on average, according to data compiled by Bloomberg." "Currently China depends on foreign imports for over fifty percent of the oil it consumes, and half of this imported oil is from the Middle East." However, the Arab Spring and stand off between the US and Iran have intensified the volatility of the region to the extent that China must diversity its energy supply. China's rapid economic development, expanding middle class population, motorization, and urbanization will aggravate its thirst for energy even further: IEA has predicted that China's dependence on foreign energy will increase to over 60-70 percent of its total consumption in 2015. The fragile state of its energy security will leave China with few options but securing its oil supply more and more from the South China Sea. Failure to do so will not only threaten China's status as World Factory but also its future survival. Furthermore, any concession on the sovereignty will seriously undermine CCP's legitimacy of rule while it faces serious calls for democracy and freedom of speech. It is well known that China suffered a lot of humiliation, territory loss and slaughters in past wars with foreign countries. Nationalist sentiments are abundant for the government or the anti-government to tap into when necessary. CCP can't afford to lose such a powerful initiative when it can tip the balance of. power.
All these variables will play out until we smell the blood and gun powder rippling across the South China sea.
Yes, It's true that Vietnam has tried really hard recently to make the South China Sea dispute an open-house party as crowded as possible. It's crying out loud for the US's interference, flirting with India against China and ganging up with the rest of ASEAN to beef up the offensive. Even so, no matter how fancily Hanoi plays the game, the deciding factor is still the substance of American support.
To Washington, it is of course very important to contain China's burgeoning influence. However, it won't be in the US's strategic interest to include as many players as possible and exclude China from its coordinated alliance, because nobody knows for certain how far the US can come near Asia in 50 years, but it is certain that China will be a huge player in Asia for a thousand years. Without China's cooperation, the US will sooner rather than later lose its strategic relevance in Asia. Let's have no doubt about that
Moreover, Vietnam shouldn't expect too much of the US. Washington at best can act as a buffer, deterrent and arms dealer between waring parties. It won't directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1. and no.2 economy the fallen giants. The world can be effectively dominated by the Sino-American alliance if the two countries establish the mutual trust to cooperate. Nevertheless, if that window of opportunity passes in a war, the US and China will both be destroyed and at best become the also-runs just like Russian, Germany and France.
Washington's most urgent task is to tackle the fiscal deficit, trade deficit and unemployment. As the US's biggest trading partner and financier, China will play the biggest role in American renaissance. As the world's biggest creditor for dollar liabilities, China will be pivotal to sustain the dollar's status as world reserve currency. The pillar of the US superpower lies on the dollar's world reserve currency status, because the operation cost of a superpower can't be sustained by fiscal policy, which is often comprised by partisan politics while most emergent. That's when you can count on the monetary relief of the fed. Without dollar's world currency status, such relief won't exist. In such a scenario, the importance of China is self-enforcing.
So Vietnam will be left to its own devices in the war cause the US's priority lies somewhere else. It's good to see the last two outstanding communist regimes fight against each other. In the end whoever owns the South China Sea will need the superior expertise and technology of American oil companies. It's good to be America when there's no losing scenario.
For China, it is very important to defeat Vietnam. It will serve as a wake-up call to Philippine among other contenders and remind them of the false hope for unrealistic American engagement. Furthermore, unlike Philippine, Vietnam shares land borders with China. So China's attack against Vietnam won't be restricted by sea. It also can utilize its superior land force to invade Vietnam. Chinese army has plenty of ground warfare experience against Vietnam in previous two wars. It can destroy Vietnamese infrastructures and facilities to sustain the war and economic growth, and bring about the regime change or a civil war in Vietnam. That's the only cost-effective objectives for the army but not the costly occupation. Leave the chaotic Vietnam to Vietnamese themselves. A dissolved Vietnam will need another 50 years to muster enough strength to strike China.
Once the dust settles, China and the US can jointly exploit the rich oil and gas resources in the South China Sea. ExxonMobil, Chevron and Shell will be all over Spratly Islands.
3.The Winner & Loser Scenario
Some people say China will lost the war. But it doesn't really matter.
It doesn't need to win a war to win.
I call this a limited invasion: destroy Vietnamese infrastructures and facilities to sustain the war and economic growth, and bring about the regime change or a civil war in Vietnam.
Vietnam's communist regime is standing on the edge while the economy is melting down and people are thinking of unrest and democracy.
China should never consider occupation as an objective. Once the damage is inflicted enough to deprive Vietnam of the ability to sustain a war with China and bring about Vietnam's economic collapse and domestic chaos, the PPL should withdraw. The Vietnamese communist regime will fall on its own sword and too busy with internal turmoil to wage a war against China.
I also call this a Scalpel Invasion. Once the objective is achieved, the army should retreat like Scalpel needs not to stay in the body after the operation is performed.
This will be the difference between the Chinese and American Vietnam war.
The mentality of modern war should be changed. A loser in the war can still be a winner in the overall game. Sometime it shouldn't be about simply inflicting military damage and casualties. It could be about destroying the enemy's economic growth, energy supply and production, food supply and production, and water supply. The ensuing famine, chaos and economic collapse will decapitate the adversary ruling structure, causing political and social earthquake, and even civil war and many other internal turmoils. The repercussion of such strategy far outstrips the performance any conventional war ideology can deliver, especially in the upcoming Chinese Vietnam War. It's good enough to render the enemy paralysed in the economic, societal and governmental meltdown. This is what I call limited surgical warfare with permanent damage.
The "win or lose" should not be about military honor. It is only about the bigger game.
4.The Irony, American Interest and where to bet your money
If the war does break out, the money will flee Asia, not to embattled Europe but to the US. Without increasing interest rate, the US will enjoy abundance of capital inflow as a safe haven. The Treasury will drop the Yield and still sell like a breeze. The gold price will shoot through the roof. However, the oil price will be confusing and go both ways because the global production will scale back when the world manufacturing powerhouses in Asia are swallowed by war and chaos. Those companies whose profits and growth hugely depend on Asia will jump the shark. However, the good news is many factories will be relocated to the US, which will greatly improve the employment in the US. Not to mention the US can sell billions of dollars worth of weapons to waring parties in the meantime. It's a good day to be America by simply watching Asia burn.
As a lecturer in Economics at the Beijing Royal School, Dee Woo first gained international attention by writing a personal letter to Barack Obama in October 2010, attempting to dissuade the US from initiating a trade war with China. As a result, he was featured in much of the Mainland Chinese media, as well as in Hong Kong, Singapore, Macao, Malaysia, Canada and the US, including by the Wall Street Journal. He has gone on to publish numerous commentaries in many influential newspaper and magazines in Mainland China, Singapore, Taiwan and the US, and is a regular columnist for Forbes China and CIO&CEO. He can be reached at http://about.me/deewoo and http://twitter.com/dee8woo
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