Vietnam pressured to take China to court over maritime spat

But Vietnam's leaders risk economic fallout by taking maritime spat to UN

HANOI - Vietnam's leaders face growing pressure to challenge China in the world court, risking economic retaliation by its largest trading partner, after a Vietnamese fishing boat collided with a Chinese ship and sank on Monday.

Legal action is one of the few options Vietnamese leaders have to placate a population that expects the government to counter Beijing's increasingly aggressive moves in the South China Sea. Deadly anti-China protests erupted in Vietnam earlier this month, targeting businesses thought to be Chinese.

Vietnam said last week it was considering arbitration in a tussle with China over an oil rig placed near the contested Paracel Islands, after the Philippines recently took its own case to the United Nations over disputed shoals off its coast.

Vietnam's Prime Minister Nguyen Tan Dung had asked Ms Ameerah Haq, UN Undersecretary-General for field support, to convey the "seriousness of the situation" to Secretary-General Ban Ki Moon, so the world body "continues to have a voice and takes action" to ensure regional stability, according to a posting on the government's website.

Asia Report South China Sea microsite

But Chinese Foreign Ministry spokesman Qin Gang countered that Hanoi "has been forcefully disrupting the normal operation by the Chinese side", and this "will in the very end hurt the interests of the Vietnamese side".

Vietnam has been planning a legal case against China for some time, said Dr Ha Hoang Hop, visiting senior fellow at the Institute of Southeast Asian Studies in Singapore. "It will happen very soon," he added.

On Monday, skirmishes between a group of Vietnamese vessels and about 40 Chinese ships led to the sinking of one Vietnamese boat. The clash occurred around 17 nautical miles from a Chinese oil rig sited near the contested Paracel Islands, Hanoi said.

It was the latest clash after China's placement of the oil rig on May 2 spurred ongoing confrontations between coast guard vessels from both sides, leading to the use of water cannon at one point.

The Vietnamese government has said it protested against Monday's incident with a Chinese Embassy representative in Hanoi and demanded compensation for damages.

But any escalation of tensions, including legal action, carries economic risks, said Mr Adam Sitkoff, executive director of the American Chamber of Commerce in Vietnam.

"China has not been afraid to use its economic weight as a way to reinforce its policies," he said. "Both countries risk economic damage and uncertainty that neither can afford."

As Vietnam and China are important players in the global supply chain, "any ratcheting up of tensions that impede the flow of supplies and products between China and Vietnam will ripple across the global economy", Mr Sitkoff added.

China is Vietnam's largest trading partner, with two-way trade rising 22 per cent to US$50.2 billion (S$63 billion) last year from 2012, according to Vietnam's General Statistics Office.

BLOOMBERG