Summary: A Spanish owned Vietnamese energy firm subsidiary was ordered to stop drilling by the Vietnamese government after China threatened military action. The area the drilling was occurring was within the vast ‘Nine-dash line’ sphere of influence claimed by China in the South China Sea. It is believed this could lead to further threats to similar operations in the South China Sea. Currently 71.2 percent of discovered reserves are not yet economically viable to exploit.

Analysis: There was always a risk this could happen as a result of the garrisoning of troops on man-made islands throughout the SCS. Incidents have occurred in the past over fishing rights and freedom of navigation, as well as claims over disputed islands. Securing this sphere of influence has likely always been about long-term resource gathering in the form of fisheries and petroleum exploitation. China requires these resources to attempt to shore up and renew the decades long high growth trends in the Chinese economy, which began to slow in late 2014, a trend that has continued in recent years. By extending military force projection in the region through their man-made island bases, China has hopes of securing the gas deposits that are currently viable, and sitting on the others until they are. The first step is to replicate the success as they have had in this case.