The dispute between Beijing and Hanoi over China's placement of an oil rig in disputed waters has escalated over the May 26 sinking of a Vietnamese fishing boat.
Vietnam's version of the incident is that 40 Chinese vessels surrounded the Vietnamese boat in an area of the South China Sea claimed by both nations. Hanoi said one of the Chinese boats rammed and sank the Vietnamese vessel.
Other Vietnamese fishing boats in the general area responded to the sinking and rescued all 10 stranded fishermen from, according to Vietnam's coast guard.
Beijing, through its Xinhua news service, responded by accusing the Vietnamese vessel of "harassing and colliding with" a Chinese boat, sustaining damage in the incident and eventually sinking. It quoted Foreign Ministry spokesman Qin Gang of accusing Vietnam of culpability because of its "insistence on forcefully disrupting China's normal operations and its dangerous actions on the seas."
The incident occurred off the central coastal city of Da Nang near China's Haiyang Shiyou 981 oil rig.
Both China and Vietnam have established exclusive economic zones (EEZs) in waters off their coastlines along the South China Sea. China's, however, extends much farther into the sea, and the two zones overlap.
China historically has claimed about 90 percent of the South China Sea, despite competing claims from Brunei, Malaysia, the Philippines and Taiwan, as well as Vietnam. China says it will not cede to other countries what it considers its patrimony.
The incident wasn't the first in the neighborhood of the $1 billion rig, but it was the first time a ship had sunk. Vessels from both countries, including coast guard vessels, have gathered in the area despite several previous collisions this month sparked by Vietnam's protest of the rig's presence.
Beijing's territorial claims have become more assertive since Xi Jinping became China's president in 2012. His government has sent commercial, military and scientific vessels into disputed waters. And in early May it set up the Haiyang Shiyou oil rig, a move that has led to growing tensions between the two Asian neighbors.
Anti-China demonstrations in Vietnam degenerated into riots that left at least four people dead, prompting China to evacuate more than 3,000 of its citizens, as well as Taiwanese, from Vietnam.
Vietnamese Prime Minister Nguyen Tan Dung says his government is considering taking legal action to force China to scrap the rig.
In fact, China said on May 27 that the rig will be moving, but not out of the disputed waters. Its operator, China Oilfield Services Ltd (COSL), said the rig had completed its first round of drilling and would be moving to another site nearby. It said the drilling so far had obtained pertinent geological information, but gave no specifics.
Written by Andy Tully at Oilprice.com.