UPDATE 2-Top China diplomat to visit Vietnam in possible thaw over oil rig

Tue Jun 17, 2014 6:06am EDT

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BEIJING, June 17 (Reuters) - China's top diplomat will visit Vietnam on Wednesday in a sign the two countries want to ease tensions over China's deployment of an oil rig in the disputed South China Sea, but experts said there were many obstacles to healing the ruptured relationship.

The visit by State Councilor Yang Jiechi, who outranks the foreign minister, will be the highest level direct contact between Beijing and Hanoi since a Chinese state oil company parked the rig in waters claimed by both countries on May 2.

Yang would attend an annual meeting on bilateral cooperation, Chinese Foreign Ministry spokeswoman Hua Chunying told a regular briefing. Vietnamese officials said Yang would meet Prime Minister Nguyen Tan Dung as well as the head of the country's ruling communist party.

"We hope that Vietnam keeps its eye on the broader picture, meets China halfway and appropriately resolves the present situation," Hua said, without directly mentioning the rig.

Vietnam's Foreign Ministry spokesman Le Hai Binh said the rig would be discussed.

Ties between the two neighbours have been largely frozen since early May, with both sides constantly accusing the other of inflaming the situation. Dozens of Vietnamese and Chinese coastguard and fishing vessels have repeatedly squared off around the rig, resulting in a number of collisions.

Ni Lexiong, a naval expert at the Shanghai University of Political Science and Law, said he believed China was extending an olive branch to Vietnam.

"Of course our country wants to avoid conflict, but can this visit really solve all of the issues?" Ni said. "It's difficult to say to what extent there will be resolutions."

"Vietnam in this case went too far. It's up to them to choose not to incite conflict," he added.

The Haiyang Shiyou 981 rig is drilling between the Paracel Islands, which are occupied by China, and the Vietnamese coast.

Vietnam has said the rig is in its 200-nautical mile exclusive economic zone and on its continental shelf, while China says it is operating within its waters.

The rig's deployment triggered anti-Chinese riots in Vietnam last month in which four people were killed during a rampage of destruction and looting of factories believed to be owned by Chinese companies. Many of the factories were Taiwanese-owned.

China has demanded Vietnam provide compensation for damage caused in the riots and punish those responsible.

Vietnam detained several hundred people in the aftermath of the violence. Around a dozen people have been tried and given jail terms of up to three years.

Prime Minister Dung last month said his government was considering taking legal action against China following deployment of the rig. That drew an angry response from Beijing.

China has said the rig will explore in the area until mid-August.

Beijing claims about 90 percent of the South China Sea, but parts of the potentially energy-rich waters are also subject to claims by the Philippines, Vietnam, Malaysia, Brunei and Taiwan. (Reporting by Ben Blanchard. Additional reporting by Ho Binh Minh in HANOI; Writing by Megha Rajagopalan; Editing by Dean Yates)

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