We Are Resolutely Determined To Protect Our Sovereignty On The Sea Because China Transgressed Into Our Area: Vietnam Ambassador Sanh Chau

India and Vietnam held the 17th meeting of their bilateral Joint Commission with EAM S. Jaishankar and Vietnam’s Deputy Prime Minister & Minister of Foreign Affairs Pham Binh Minh. What did they discuss under the India-Vietnam comprehensive strategic partnership? How important the meeting was?

Firstly, I want to emphasize on how the context is very important. 

We call this mechanism the Joint Commission Meeting. This is because participating at this talk at the Vice Minister's level of different ministries covering all of our bilateral relations is important. So I want to make clear of the importance of the level of this meeting. 

Additionally, this is the 17th meeting between our countries and we have established our relationship at the highest level of diplomacy, namely comprehensive strategic partnership. Vietnam at the moment enjoys only three important comprehensive strategic partnerships - with Russia, China & India.  So you see how important that relationship is for us. 

Also, I would like to mention, this meeting took place against the backdrop of preparation for the 50th Anniversary of the diplomatic relations between our countries, in 2022. We established our bilateral relations in 1972. 

These meetings took place in the context of instability prevailing in the region. Namely the tension and the complex development in South China Sea, especially over the past one year, we have seen so many complex situations develop. We also see the rising tension between India & China. So the moment is very crucial. In addition, we also are members of the United Nations Security Council. Vietnam served this year and will be servicing next year, whereas India will serve from next year to the following year. This also signifies the importance of this moment. 

Because in the past, we haven't had the current situation of border tension, South China Sea complex situation, we were not part of the UN Security Council, and Vietnam also assumed ASEAN chairmanship after nearly ten years. 

Secondly, I would like to discuss not just our bilateral relations but also how we coped with the covid-19 pandemic. Before 31st of July, we had no casualties, no deaths whatsoever and we had only 350 cases. Now we have more than 1,000 cases, which was brought in by the second wave. 

How did the pandemic affect the economy of Vietnam? Did it affect Vietnam significantly like it did India? Was a lockdown initiated in Vietnam as well? 

We try to keep the situation as good as we can, both in terms of controlling the pandemic and develop the economy. 

We still have 1.8% positive growth as compared India where it's -23.9%. 

One of the things we stressed, was the necessity for our two countries to break down all the technical barriers to trade as a result of the pandemic. So when we impose the lockdown, it disturbed the whole natural flow of trade. Let's say we have fifty-four containers that got stuck in Nepal. But when we can release them from Nepal, it has to pass through Kolkata, and now it's stuck in Kolkata. And then this issue continued to strain when the lockdown prolonged further. So these things affect us. 

And we are also affected by the tide and control of the Indian government on imported goods, when it comes to rule of origin. These are the things that were brought into discussion. 

Vietnam model is being talked about as the preferred destination of many foreign companies wanting to invest in Asia. What makes Vietnam so attractive? Can you tell me, what has Vietnam done so right in terms of attracting such an investment at large scale?

I also want to congratulate India for being able attract foreign investment. 

Vietnam is now one of the hottest destinations for investment. Direct Investment placed in Vietnam surpass $ 38 million dollars in 2019. I understand in India, it's a little more than that, around $ 56 million dollars in 2019. So we have a year-on-year increase of 7.2% and in the first 6 months of this year, we have got already $ 15+ million dollars. So this is also very important. 

Now I will share with you a number of elements which determine the fact that Vietnam has become an attractive investment destination. 

1. We have a very stable political system. The situation is stable everywhere in the country. We have good coordination between provinces. We don't have competitions between different provinces, because of political parties. I must say, our advantage is, in our country we have a one-party system, which is implemented across the country, since independence. So, we normally don't have competition between provinces. Of course, provinces will compete with each other in order to attract investment and business but the central government will coordinate and give the framework. For example, the tax system is implemented by the central government. On the basis of that tax system, every province can come with additional incentives. 

2. Our economy is consistently doing well. So even during the pandemic, we still register positive growth. On average, we registered around 6-7% growth over the past 30-40 years. So a positive and stable growth rate is also one of the very important elements, making Vietnam an attractive destination for investment. With that, we have a strong private economy sector. 

Our Private Sector drives the economy. Before, the reform, we were a centrally planned economy and now the private sector dominates the whole economy.

Vietnam opened its economy in 1986. The journey into global market…

Five years before India; India opened it in 1991 and we opened in 1986. 

The third element is that Vietnam has a very open economy, which is also the most populous open economy in the world - 200%. I understand that the economy of India is open 40-50% whereas for us, it is at 200%. This basically means our GDP is around $ 250 million dollars and our total trade two ways is $ 500 million dollars. Since, we have a very open economy, we have signed a lot of FTAs, and we have 13 FTAs in total. We have just signed our most important FTA which is the European Union FTA. This is second after CRTPP that we have signed. EU has signed FTAs with only 3 Asian countries - Republic of Korea, Singapore and Vietnam. 

I know that India is still in discussion with the European Union on this deal. I even asked the Minister Hardeep Singh Puri on how far India is on that matter. 

Another important FTA for Vietnam is the U.S.- Vietnam comprehensive partnership, which was worked out by America since President Trump came into power. Otherwise, I believe if President Clinton had won the election, then U.S would've stayed on the deal. This is very important. We call this the two-highways for the economy of Vietnam - one to the European Union and the other to the United States of America, Mexico and Japan. 

This year, we are going to sign the RCEP with 16 countries including Australia. I know India is not part of this, we backed India for this deal but finally India could not make it. But we still save a seat for India. We also have an agreement with Russia & Belarus. Our economy is very open.

The fourth element, on the macro-level, we keep trying to improve our investment environment. Business Environment Index of Vietnam keeps going up and up. We are ranked at 70 among 160 countries. So what do you mean by Business Environment? This means you try to streamline the procedures, you try to give more incentives in terms of tax, you try to give more skilled labour workers etc. So a lot of things combine in order to make sure that the environment is competitive. 

As you mentioned, I have to compare with India where issues like Ease of doing business, Red- tape & land acquisition are usually being highlighted by foreign investors. How are these issues being resolved in Vietnam? How did you work on?

I'll give you some examples so you can compare. 

1. We have a one-stop policy. Everything goes through with one-stop. Whereas in India's case, there are many stops. 

2. In terms of land acquisition, similar to India, we clear all the land and we put other things, so the investors don't have to put any other land clearances. 

Recently, we welcomed the recent move by the Indian government, by putting all the land together in Gujarat for investors. But in Vietnam's system, we provide infrastructure, power and houses for workers for investors. Now, when it comes to Red Tape. I have problems with my containers in Kolkata. I see how difficult it is. 

I will give you another example, which has less to do with business but like in India's system - the nomination of one honorary consulate. In India, we started the process in 2017. Now it is 2020. With that type of nomination, in Vietnam it takes only one month to finish. So this is very frustrating. Not just on this matter but on others as well. 

Sometimes, I wonder how you can rule with that type of Red Tape. I was told this was traditional India. But in traditional India, the bureaucracy is very strong. 

They have to set up a pillar, to make sure regardless of the political party in place, this functions smoothly in that way. So I have respect for that way. Because India is very big and very diverse in terms of religion, culture etc., so sometimes they have to balance, by buying time in order to check and supervise. But what I mean is that, with that in mind it is very difficult for India to compete with Vietnam. This is the case, because we are smaller and sometimes those are smaller they are quick and faster at such things. 

Sometimes I encourage my Vietnamese people to invest in India, but they come and they say that 'No, we cannot, not because of the market is not good, but because but Red Tape is too strong, and we have different culture of doing business,’ so that prevents our investors. 

Now we have somebody investing in Hyderabad and Bangalore, in the area of IT technology. But apart from that even if someone wants to invest in here, they still need aluminium, because you have mines, you have labour but procedure wise it’s not easy. 

Prime Minster Modi has a very close relation with Vietnam counterpart. He sees Vietnam as a closest partner. So what you have said is everything for India, which I also understand. 

Vietnam and India have excellent relationship, in last 2000 years we have never fought each other, we never had enmity. We always `supported each other. Even our prime minster said that relation with India and Vietnam is as clear as a blue sky without a single cloud, very beautifully termed.

Vietnam has welcomed Indian investors. As India is an energy deficient country, it’s a welcome move by Vietnam. What is your outlook on the Indian investment in the Oil and Gas in Vietnam? As Indian firm, ONGC Videsh has been exploring in Vietnam, what are the potential in this areas?

My message to this firm is that, Vietnam is a promising oil and gas market, that number 1. Number 2, India is the few company that we have selected. You know at the moment we have only 2 very strong presence- Russia Soviet union company, and ONGC Company, India. You came in 86', nearly 40 years and of the past 30 yrs. You have been bought back dividends, 100 million dividends in dollars back to India. 

This is a strong partnership India would win a lot from that investment and it’s the same for Russia, because we gave the best part of our oil and gas to our best friends, Russia and India.  

Now china is also interested but since we have a conflicting claim. USA also has ExxonMobil, so they are also interested. But India is now trying to get an extension, so we are looking into that, favourably, no issue. I came to see them twice and I continue to see them here again. So we continue to work with them. 

Now we have the new partner ESSAT. ESSAR group has just discovered gas in Vietnam, which is very commercially successful. So to create all the favourable conditions for ESSAR to come. 

We are working on the project of 11 billion US Dollars downstream, upstream gas, petrol, etc. This is a huge project and we are trying to do whatever we can in order to accommodate. I hoped that, this ESSAR and team of A&I from Italy, they are very good partners. This is gas not oil we are talking about, so this was successful too. 

So During my term I bring ESSAR to ONGC and I want to bring another company- HCL. They want to create biggest centre in Asia out of India. And my next target is for Reliance. So those are the very important sectors, and we give only out of comprehensive strategic trust. 

Our defence corporation is turning strategic; defence minister was here recently.  In the past, India has promised to deliver key equipment like BRAHMOS & AKASH to Vietnam, it did not happen so far. How Defence cooperation is unfolding?

We have agreed that defence constitute the pillar of our comprehensive partnership. And in that pillar of corporation and defence security, we had identified a list of things that need to be done. And out of that list we focus a lot on training- service personal training in different field and linguistics as well. We also discussed the purchase of equipment Therefore we have the 2 important credit lines, provided by the Indian government to Vietnam. First one is $100m Credit lines in order to produce Offshore Petrol Vessels (OPV), and second is $500m credit lines. $500m Credit is also very important in various areas of equipment, preparation and purchase things like that. So that is very important and it reflects the trust between two countries. We have frequent extensive visits at up- level, like General, chief of staff among other key visits.   It was very fruitful so the corporation is going on. 

India-Vietnam military exercise off Cam Ranh Bay in Vietnam 

On that matter, I can answer that any factor of pressure cannot threat our corporation in the field. It also depends on many other factors of our domestic situation and our ability to buy. 

What Vietnam is looking from from India and what kind of industrial/defence cooperation is required?

The persons involved in these sectors need to discuss. So they are discussing what is important to Vietnam, mainly for the defence system, and it also has to come to the ministry of Finance, who checks whether it’s appropriate, it’s within the financial macro requirement of Vietnam, as the new debts are mandated by the parliament under 60%. 

Let's talk on South China Sea. As per the reports, China's coast guard vessel keeps coming within Vietnam's 200 nautical mile EEZ. Recently, Chinese violated and came at Block 06.1, an oil & gas extraction. Along, China has deployed fighter jets & bomber to the disputed Paracels islands. I would like to know the perception of Vietnam on such trespassing by China. How does Vietnam plan to counter such aggression?

Let me start by saying that yesterday in the statement of our minster he also mentioned that over that past one year development in South China Sea has been complex. My first argument is, South China Sea is important, it is the main sea route for transport and second most important sea route of the world after the Mediterranean. And across the sea route, 50% pass through this route. So anything happening here will affect the whole world. Therefore we had to level up the security in South China Sea. It is not only the issue of the country in region but across the world including India. Because India has more than 55% ships that go through this sea route. 

This area is also rich for natural resources. Therefore many countries also pay attention to that. So for three elements trade route, natural resources and geo politics, three factors combined makes this region very important. As it is becoming very important therefore, there are many issues happening here. But we need to make a distinction here in the several issues. The first issue is overlapping claims. The second issue is the freedom of navigation, freedom of flight, peace and security.  In terms of the first issue, we have two categories- the claim between china and Vietnam on the Paracel Islands. 

Vietnam has a full historic and legal evidence for its claim over Paracel Island. Before 1956, Paracel Island was of Vietnam. In 1956 during our war against the French, Chinese sent its troops and took half of parcel islands in 1956. And the second half Chinese sent the troops and took it in 1974, when we were busy in fighting America. So china took it from us, so it’s clear the whole world knows. 

So we asked China to give it back to us, so this is the issue between China and Vietnam. We don’t need any other countries to do the arbitration. Now china has to give it back according to the law. 

The second issue is the Spratly Island, claimed by 6 parties but 5 countries. By 6 parties I mean- Vietnam, Philippines, Malaysia, Brunei, China and Taiwan. In terms of that claim, we believe that the 6 parties have to sit down and discuss. 

 Paracel Islands, Vietnam, South China Sea 

Why 6 parties are claiming that, historically what is the reality? What has history taught us about Spratly Island? 

We have historical and judicial evidence to show that this belongs to us, but see every country claims the same. We have 200 cases across the world according to the statistics of the tribunal. This is not the only case. In many cases there, they dispute and they bring to court, and the ruling of the court if followed. So in that matter we believe there is no issue, we consider we discuss, that is the first set of issue of sovereignty. 

Now second set of issue is peace and security. We need to make sure that peace and security are respected. And freedom of over fly and navigation is respected. The reason why our people are worried about this is because some country number one they try to make artificial islands and after having the islands, they claim the islands. 

Number 2: They militarize the islands. They put equipment there. There are of 7 such artificial Islands they claim. You have created it, you put artillery, arm and ammunition, and you practice military exercise. There also put fighter jets, and then they draw in other players as well. Here it becomes battle filed for quick power rivalries. So the tension keeps increasing so it’s another set of concern. But before that China claimed 9 Dash line, it goes through different places, different sovereign countries, that 9 dash Line is then taken by tribunal is rejected by international tribunal in July 2016.

Over the past 1 year, china keeps sending vessels in our water they send them because this is the claim that it is in 9 dash line. And not only Vietnam they went to Malaysia, Indonesia, saying that it’s a fishing ship and things like that. So it’s those movements by our friends, which is our comprehensive partner, I had to stress on this occasion that we have very good relation with china. This is the remaining issue. Unlike India, we have been able to revamp the boundaries with North China. For Land boundaries 20 - 30 years ago, we were able to re- map. We normalized our relations 30 years ago. We have 4 billion visitors every year from China. China is also our biggest trade partner. 

We have provinces and their relations with China is by & large fair and good, except this part - I have to put it in a context, otherwise you will see Vietnam & China as only one issue. That is why Vietnam termed China as a 'comprehensive strategic partnership.' 

So, the trade relation is not affected at all? It is separate from this? 

No. We are only trying to do separate things differently. We have a very strong party-to-party system. We have a very strong trade systems. We have very strong trading & tourism. 

Having said that, China sometimes does attack the Vietnamese boats, very openly - disregarding this close relationship. How do you look at all this?

The issue is that it comes back to the claim of Spratly and Paracel. Because Paracel is a part of Vietnam. Our people go there and fish. And they say that this is their island, so they chase them away. So, that sort of thing - happens only there. 

One has to keep an objective assessment of the situation. It cannot be generalized. 

Whatever is good in our bilateral relations, we need to promote & treasure. What remains a problem for us, we need to address. 

The same is for India. I think the two have very good relations. You have summit in Wuhan, Chennai, you have beautiful pictures and the two leaders speak many times. This is a good, positive development. 

Chinese Boat collides in South China Sea 

But we have finally now corrected our trade relations with border situations. Our Foreign Minister has very clearly said - we have to have a very good relation, while we do trade. It will not go vice-versa. So, it is an evolving Indian foreign policy. For Vietnam?

Correct. We heard about that policy. But, for us, we think that these two things are separate. 

Because, otherwise we don't want to spoil our relation with China. It is very traditional, very good. But we don't let the South China Sea affect the overall relationship with Vietnam. 

So, two things - we treasure our relationship with China but on the other hand, we are resolutely determined to protect our sovereignty on the sea because China transgressed into our area-deep down as you said around Block 06.1 within Vietnam's 200 nautical mile exclusive economic zone

Recently, in July, we called the diplomatic battle in New York. Pompeo came up with the note verbale.  Then Australia said they reject all claim of China. 

Then Philippines, Malaysia, Vietnam, and Indonesia - all share. What we now focus on is that - you need to respect international law.

In the same context, now, you take the chairmanship from ASEAN. But I see ASEAN focusing more on the trading part and less on such issues. Do you think such disputes with China will be resolved through ASEAN? 

Of course they can and they should. Because they are a very successful regional grouping. ASEAN is not only a trade-block. It is a charter. It means we are the whole community. 

So, we have three pillars - political security pillar, economic pillar, and social pillar. In terms of social - we try to become one family. In economic - we try to develop one block (free trade); in security, we are very successful, because we are the only regional grouping that can bring all the major power on the table. No single organization in the world can do that. Everyone wants to become their partner of AEASN. During our chairmanship, we tried to manage yesterday. We talked about security matters - that ranged from many things. But one of the most dominant topic is our South China Sea.

I think that ASEAN has a central role. Secondly, the situation of the whole South China Sea affects the whole ASEAN group. Thirdly, it’s a matter of peace and stability in the region. ASEAN needs to come forward with that. Because they are the most successful regional grouping. They are the only one that can bring all the major power at one table. If you cannot address that, who can? 

But in ASEAN, we have another mechanism which is 'consensus building'. We don't want South China Sea which affects more coastal countries, to be seen by the continental countries as something which has less to do with them, as something important. 

But this is not the question of sovereignty. It is the question of peace and security in the region. Therefore, all the continental countries also associate with that. Hence, they should show solidarity. When it comes to the interest of certain countries, the whole group should support. It’s obvious. 

India has of course great relations with all ASEAN countries. But how does Vietnam look at the ASEAN’s outlook on various Indo-Pacific Strategy unfolding, like the QUAD to achieve security & growth in the region? Will Vietnam be keen to be part of The Quad grouping? 

There are two set of questions, we need to address in your question. The first set of question is - Indo Pacific. We call it ASEAN Outlook on Indo-Pacific, which came out last year. It is a fundamental paper, which defined the position of ASEAN in the Indo Pacific. 

We wanted to make sure that ASEAN‘s centrality is respected. We don't want our country to jump into our region. 

We also want international law including UNCLOWS be respected. On that basis, we welcomed Indian initiative on Indo Pacific - not to merge the two but to complement each other - with the final objective of having peace & security in the region. Thus, the first issue of Indo Pacific. 

Therefore, we understand the Indian position as communicated by PM Modi. It’s very close. We are almost the same. 

Now, when it comes to QUAD. QUAD is basically 4 major countries - U.S., Australia, Japan and India. 

We are following the situation of QUAD very closely. We are of the view that any idea or movement that contributes to the peace and stability in the region, that contributes to international law and that contributes to the peaceful settlement of dispute through dialogue - should be welcomed. 

So, in the future, Vietnam would be keen to be an observer or contributor in the QUAD - as an equal partner? 

We are talking about QUAD's involvement in supply change. Their involvement in addressing conventional, traditional security challenges. Let’s say 'if' - I put the question back to you. If the four countries of QUAD ask Vietnam to join in a fight against climate change, would Vietnam refuse? So, it very much depends on what you are working on, in order to invite Vietnam. Or if QUAD asks Vietnam for the supply of cotton, since Vietnam is a major textile producer and exporter. Should Vietnam refuse when it needs to import more cotton? Therefore, you cannot generalize that QUAD is something threatening to somebody. 

In our perception - what is termed as Indo-Asia Pacific? So, it should be open & inclusive to everyone. We should include everyone. It is not exclusive. That is our interest. Our interest is anyone who contributes to peace & stability, anyone who has respect for international law is welcome. In terms of our defense policy, we have our paper work (white paper) - which came out every 10 years. 

But we were forced to. Now, when it comes to military, industry development - we also have something that is reserved.

That explains why it takes Vietnam so long to come to the decisions on sending its force to the peace keeping of the UN. Because we have gone through so many devastating wars, we have suffered a lot. So, we don't want to suffer more. 

Are you disappointed with India not joining RCEP for reason that we have a huge trade deficient with China, and also with ASEAN countries? What is your perspective on this?

Number 1: The decision taken by the Indian government is a sovereign decision. We respect that. If a sovereign government can make a sovereign decision, that decision is to be based on the best interest of the people and country. That's number one. We cannot complain. 

Number 2: We understand that there are issues behind that decision. We are not deaf, no? We understand. We are sensitive. 

Your opposition, your reservation, India is a big country, it has many elements that need to be brought into consideration & understanding. 

The third point is that Vietnam as the Chair, we have been negotiating with India bilaterally and in the context of reason with other 11 countries - we have created all the favourable conditions. We facilitated the whole process. 

6-7 years back, India decided to join. Once, you decided to join, you negotiate. And during the negotiation, you give concession back and forth - on both sides. 

Lastly, you said you cannot join. Of course you still know how strongly we felt about that. I don't use any objective to describe how we felt. Having worked together for 7 years, giving so many concessions back & forth and now you say that you cannot join. Then I'd say that, either countries have expressed themselves.

The fourth point - that why we may not be happy - we may not feel very accomplished, as something is missing. 

We can try to find arrangement, because India should have been there. And the place is still there. 

Will it pass through? Will it see the day of light this year?

Certainly. `