Tensions have been running high between China and Vietnam over China’s installation of an oil rig in disputed waters, with anti-China riots erupting in Vietnam in May. In an email interview, Carlyle Thayer, professor emeritus at the University of New South Wales, explained how the maritime dispute threatens the otherwise booming China-Vietnam relationship.
WPR: What is the extent and recent trajectory of Vietnam-China trade and investment ties, and what are the major sectors involved?
Carlyle Thayer: Since Vietnam and China normalized relations in late 1991, bilateral trade has grown significantly. China is now Vietnam’s largest trading partner, with two-way turnover reaching $50.2 billion in 2013. Nevertheless, the direction of trade is skewed in China’s favor. In 2013, for example, Vietnam’s trade deficit with China reached an all-time high of $23.7 billion.