A Step Back From the Brink in the South China Sea

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China's President Hu Jintao (L) and Vietnam's Communist Party General Secretary Nguyen Phu Trong walk past a guard of honour during a welcoming ceremony at the Great Hall of the People in Beijing, October 11, 2011. (Photo: China Daily / Reuters)

China and Vietnam, which traded accusations this summer over rival territorial claims in the South China Sea, signed an agreement Tuesday outlining basic measures to help settle their ongoing dispute. The agreement, reached during a visit to Beijing by Vietnamese leader Nguyen Phu Trong, calls for China and Vietnam to hold biannual meetings about border issues and set up a hotline to diffuse emergencies, China’s state-run Xinhua news service reported.

In May and June, Chinese vessels twice cut cables that were towing sonar array behind boats working for PetroVietnam, the country’s state-run oil and gas company, in waters that Vietnam says it holds exclusive economic rights under the 1982 U.N. Convention on the Law of the Sea. Those incidents touched off angry denunciations from the two sides and rare public protests in Vietnam. Both countries conducted naval drills, a sign that the dispute had the potential escalate further.

Tuesday’s agreement indicates both sides are prepared to ease the threat of armed conflict and consider ways to cooperate on searching for energy resources below the seabed. Vietnam and China agreed to consider interim measures “including research and negotiations on the joint development of the sea,” Xinhua reported. “Development” in this context usually refers to oil and natural gas exploration. While nationalist sentiments on all sides drive the dispute, the potential energy resources in the 1.4 million square mile sea is the most tangible sources of friction between the South China Sea claimants, which also include Malaysia, the Philippines, Brunei and Taiwan. It is not surprising that tensions escalated over the second half of 2010 and early 2011 as crude prices climbed to highs not seen since the start of the financial crisis in 2008. For China and Vietnam as well as the Philippines, which has also feuded with China over maritime claims in recent months, the prospect of vast oil and gas reserves close at hand makes it difficult to back down from South China Sea claims.

While the agreement between China and Vietnam, which fought a brief war along their shared land border in 1979 and clashed over the Spratly Islands in the South China Sea in 1988, represents a welcome d├ętente, it is far from a permanent solution. In 2002 the rival claimants to the South China Sea said they would not take steps that would inflame the situation, but have struggled with how to make that agreement binding. This summer China and ASEAN agreed to a set of guidelines to implement that 2002 declaration, but experts have discounted the significance of that latest accord. This week’s agreement between China and Vietnam is, at its most basic, an agreement to keep talking over the South China Sea. It’s not a breakthrough, but it’s better than not talking.

Austin Ramzy is Beijing correspondent for TIME. Find him on Twitter at @austinramzy. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.