Vietnam's Trade With China Flourishes Despite South China Sea Tensions

Tensions between Vietnam and China resurfaced in July over disputed territory in the South China Sea. Despite the nationalist bickering, trade between the Asian neighbors continues to flourish. But unlike China, Vietnam has welcomed U.S. involvement in the dispute.

Despite nationalist tensions, business along the border of Vietnam and China is flourishing.

Officials in Lang Son Province say close to $3 billion in agricultural and electronic goods are traded every year with China.

"In the field of trading recently, as you know, it is happening normally, there are no obstacles," said Nguyen Van Chuong, director of the Tan Thanh customs office, who says trade is increasing annually by 20 percent. "Both sides create good conditions for the exchange of goods. You can see the trucks are passing very well now," he added.




Vietnam allowed a series of rare public protests against China in July after Beijing made deals for oil exploration in territory Vietnam disputes in the South China Sea.

The Hong Ji ship from China gets coal at a port of the Cua Ong Coal Preparation Company in Cam Pha town, in Vietnam's northeast Quang Ninh province, September 21, 2010.

Beijing then announced an administrative capital to govern the areas also claimed by Brunei, Malaysia, the Philippines, and Taiwan.

The tensions raised concerns among some traders, like Nguyen Viet Duc, that political problems could affect profits.

"My company’s relations with China are not so long," said Nguyen Viet Duc. "But since we've had relations, it's continuously developed. I hope, looking at the big picture, that the governments of both countries pay more attention to continue the traditional business relations and make better conditions for companies of both sides."

To temper China, Vietnam is welcoming U.S. involvement in the South China Sea -- including at its strategic Cam Ranh Bay, which houses an off-limits navy base.

U.S. Secretary of Defense Leon Panetta in June was the highest ranking American official to visit the bay, a former U.S. air base during the Vietnam War and later a Soviet base.

Vietnam re-opened the bay to service foreign navy ships in 2010 and Nguyen Ngoc Son, Vice Chairman of the Cam Ranh People's Committee, says its importance is growing.

"We can say that Cam Ranh bay is a place which has the potential to develop the economy, and, at the same time, to protect and to hold firmly our sovereignty in the sea and islands," said Nguyen.

Cam Ranh Bay opens toward the Paracel Islands, which China has controlled since clashes with Vietnam in 1974, as well as the Spratly Islands that both claim.

Officials say their focus is on developing a new port logistics service center to increase economic growth at the bay.

But, Vietnam also plans to station several Russian-built submarines there to improve its defensive capabilities, which could raise hackles from Beijing.