Vietnam to spend billions on islands amid China dispute

Japan protests to Beijing over chasing in East China Sea
Tokyo (AFP) May 4, 2010 - Japan on Tuesday protested to Beijing after an inspection ship chased down a Japanese ocean surveying vessel in the East China Sea, the coastguard said. The incident took place on Monday in the East China Sea, about 320 kilometres (198 miles) northwest of Japan's southern Amami Oshima island, he said. "The Chinese ship Haijian 51 approached the Japanese surveying vessel, the Shoyo, and chased it down for hours while demanding it leave Chinese waters," said the Japanese official who asked not to be named. "It was the first time that a Chinese ship has demanded Japan's survey vessel stop its work in its EEZ (exclusive economic zone)," he said, adding that the Japanese ship was conducting its oceanographic survey. "The Japanese Foreign Ministry on Tuesday lodged a protest against Beijing over the incident," he added.

The Haijian 51, which says "China Marine Surveillance" on its side, is believed to be the Chinese government's inspection ship. Ties between Tokyo and Beijing have been strained over territorial disputes in the East China Sea. There are four controversial Chinese gas fields in the East China Sea that Japan says extend into its own EEZ. The two countries are also disputing sovereignty of the Senkaku islands, known as the Diaoyu islands in Chinese, which lie between Japan and Taiwan.

The incident followed China's helicopter fly-bys near Japan's Okinawa island last month when Japanese naval ships spotted and followed the largest Chinese flotilla of warships so far to sail between Japanese islands. The Chinese ships did not pass through Japan's territorial waters but their voyage was seen as provocative by many in Japan, which has watched with unease its Asian rival's build-up of military muscle. Tokyo has lodged a protest with Beijing after a Chinese naval helicopter flew within 90 metres (300 feet) of one of its naval ships on April 23 in the second such incident last month, Japan's defence ministry said earlier.

Oil lower in Asian trade, hovers above 85 dollars
Singapore (AFP) May 4, 2010 - Oil eased in Asian trade Tuesday after touching its highest level in 19 months, but analysts said prices remained strong on concerns over a giant oil slick in the Gulf of Mexico. The announcement of a massive financial bailout for debt-stricken Greece as well as news of an improved manufacturing outlook and an increase in consumer spending in the United States are also expected to support oil prices. New York's main contract, light sweet crude for June, shed 42 cents to 85.77 dollars and Brent North Sea crude for June delivery was down 44 cents at 88.50 dollars a barrel. The New York contract had touched 87.15 dollars, the highest level since October 2008, on Monday in New York.

"Technically speaking, 87.10-87.15 (dollars) could be the new resistance level," Clarence Chu, a Singapore-based oil trader with Hudson Capital Energy, told AFP. "The previous high was 87.09 and after that the market just dropped and we saw the same thing when the market went up to 87.15 dollars (Monday) before going back down." But he said a multi-billion-euro bailout for Greece and concerns that a giant oil slick off the southern US coast could block supply delivery buoyed prices. "The oil slick is attracting more and more attention because now it is very likely that the slick will somehow block the Houston shipping channel, which could potentially affect imports to the US," said Chu. The economic health of the giant US economy is closely monitored by the oil market because the United States is the world's biggest energy consuming nation.

by Staff Writers
Hanoi (AFP) May 4, 2010
Vietnam has announced an 8.5-billion-dollar economic and defence development plan for a string of islands along its resource-rich coastline, as a broader sovereignty dispute simmers with China.

A copy of the plan, dated April 28, was obtained by AFP on Tuesday.

It calls for development over a 10-year period of a string of islands stretching from Phu Quoc near Cambodia in the southwest to Cat Ba off Haiphong in the north near China.

The document says authorities aim to boost seafood, tourism, agro-forestry and other sectors under the plan, which will require an estimated investment of 162.5 trillion dong (8.5 billion dollars) over 10 years to 2020.

"That's a significant wad of cash for Vietnam to be spending," said Ian Storey, a fellow at the Institute of Southeast Asian Studies in Singapore.

The plan also calls for increased investment in the islands' defences.

"It is essential to pay attention to security and defence tasks during arrangements for economic and civil projects on islands," the document says, calling for them to become an "outer defence stronghold".

The stronghold would include the Spratlys, the document says, although the South China Sea archipelago is not among the islands listed for the economic development initiative.

Vietnam and China are engaged in a long-running dispute over sovereignty of the Spratlys and another archipelago to the north, the Paracels, which China occupies.

The archipelagos are considered strategic outposts with potentially vast oil and gas reserves and rich fishing grounds.

Taiwan also claims the Paracels, while the Spratlys are claimed in full or in part by China and Vietnam as well as the Philippines, Malaysia, Brunei and Taiwan.

Over the past year Vietnam has reported cases of fishing boats and equipment being seized by China.

In the latest incident, reported by the state Vietnam News on Monday, China released 23 Vietnamese fishermen but allegedly kept one of their boats and gear worth 500 million dong. The men were arrested while fishing off the Paracels.

Among the islands included in Vietnam's development plan are Phu Quy and Con Dao, off southern Vietnam, where the country already produces oil and gas.

Last year a US State Department official said Beijing told US and other foreign oil companies to halt work with Vietnamese partners in the South China Sea or face consequences.

While Vietnam's island initiative appears to be about economic development, "another factor would be the need to protect these offshore oil and gas deposits" as well as fishing stocks, Storey said.

In December, Vietnam reached a major arms deal with Russia that was reported to involve the purchase of six submarines. Analysts said the deal aimed to bolster Vietnam's maritime claims against China.

The islands contribute about 0.2 percent of Vietnam's economy but this would more than double to 0.5 percent under the development plan, the government document said.

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Oil mixed, sticks around 86 dollars
Singapore (AFP) May 3, 2010
Oil was mixed in Asian trade Monday, shedding initial gains made after Europe's endorsement of a massive aid deal for Greece and expectations of a US supply drop caused by a giant oil slick, analysts said. New York's main contract, light sweet crude for June, edged down six cents to 86.12 dollars per barrel. Brent North Sea crude for June delivery was up nine cents to 87.53 dollars a bar ... read more

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