Fires in Vietnam could ultimately burn Beijing

The spilling of blood and burning of factories by anti-Chinese rioters sweeping across Vietnam reinforces Beijing's message to other countries claiming territory in the South China Sea: resistance is costly and ultimately futile.

But a region in which anti-Chinese sentiment grows and where sovereignty disputes disrupt trade and economic growth will burn Beijing as well. Over the long term, a commitment to peaceful dispute resolution in accordance with international law, including some concessions on historic claims, would serve China better than its current path.

China made the provocative first move in this latest incident by deploying a massive oil rig to the contested Paracel Islands. There was no doubt that Vietnam would respond, and China prepared by sending an armada of 80 ships - including seven naval vessels along with the rig. The two countries' maritime forces are now locked in a standoff with aggressive and dangerous maneuvers, water canons and collisions at sea.

Deploying the oil rig allows Beijing to show that Vietnam is in a lose-lose situation when faced with Chinese aggression. If Hanoi ignores the Chinese move, it allows "new facts on the water" that will bolster China's legal claims down the road. If it resists, its coast guard and navy will be dragged into a long and costly contest against a stronger force. And if the dispute continues to spark violent protests at home by angry Vietnamese nationalists, investment and international confidence gets disrupted for Vietnam - not China.

China does not want open conflict with its neighbors, but when it comes to territorial disputes, the Chinese government has decided it can play hardball with little risk. It can push just enough to advance its own claims, but avoid serious conflict or war by deescalating before things get out of hand.

Beyond the oil rig, Chinese actions in this vein include new construction on contested reefs and shoals occupied by China; patrols and ceremonies on islands claimed by other nations like Malaysia; unilateral fishing bans imposed on other nations while China tolerates illegal fishing and harvesting of coral by Chinese fishermen; and many more. At the same time, China continues to participate in negotiations on a Code of Conduct among the countries it bullies, intended to prevent conflict and prohibit exactly this kind of behavior.

For Chinese leaders committed to defending what they view to be Chinese territory, this aggressive path makes sense for two reasons. First, it teaches the smaller maritime nations of Southeast Asia that they're better off accommodating Chinese claims than resisting them. In essence, China is saying "we can do this the easy way or the hard way."

Second, China knows that its most important claims - like the nine-dash line covering most of the South China Sea - are not well-founded under contemporary international law. By taking aggressive steps now, Beijing can establish a track record of presence and activity that will position China better if it ever needs to clarify claims in accordance with international law, as called for by the United States and other nations.

But this strategy is bold, not wise. Beijing's actions carry significant risk, and mask a tension between China's short and long-term goals. Sailors or airmen in tense standoffs could miscalculate and spark an incident that demands military escalation. Countries like Vietnam could also decide to take a stand and choose to fight rather than give in to Chinese pressure. Yet that decision would be calamitous: the last time China and Vietnam went to war, in 1979, about 60,000 people were killed. China would not benefit from such conflict in Asia, especially if it took the blame for derailing Asia's long run of peace and progress.

Even if it avoids war, China can overplay this hand to such a degree that Southeast Asian nations defy history and join together to resist domination by a resurgent Middle Kingdom. The 10 members of the Association of Southeast Asian Nations (ASEAN) are far from forming an alliance and have no tradition of such banding together, but ASEAN has grown stronger and is welcoming a greater U.S. role in the region, in part because of China's assertiveness.

For now, Beijing's refrain seems to be from the Rolling Stones: "don't play with me 'cause you're playing with fire." Chinese leaders think the fire will only burn their rivals. They are wrong.

© (c) Copyright Thomson Reuters 2014.