For Chinese neighbours, caution is the byword and trade the catchword - part two

Early in 1979, around 120,000 troops of the Chinese People's Liberation Army crossed into northern Vietnam for a short-lived but bloody battle with the Vietnamese. The PLA went back home after reaching 30 miles inside Vietnam. That incursion has left strong negative memories in Vietnam.

Occasional skirmishes continued over the border during the 1980s and relations between the two neighbours were only improved in the early 1990s. The war also caused a forced migration of Vietnam's ethnic Chinese, who were discriminated against. They fled as “boat people”.

The legacy of the war is lasting, especially in Vietnam. Today Vietnam maintains one of the world's largest armies, which some attribute almost entirely to fear of China. Occasional skirmishes continued over the border during the 1980s, with over 1,000 people being killed. Relations between the two neighbours were only improved in the early 1990s.

In the People's Republic of China, the war has largely been forgotten. It is rarely mentioned in official circles and most history textbooks do not give it much prominence.

Islands of dispute

China is patient, as is shown by its policies bent on making real its claims to the diverse islands strategically and economically situated in the adjoining seas and which are also claimed by other nations. China seems intent on picking off each in turn, just as its took the Paracels from a divided Vietnam in the mid-70s, and used force against a diplomatically isolated Vietnam in 1979 and 1988 to curtail its presence in the Spratlys.

However, a much more friendly tone was notable in a similar Sino-Russian territorial concession of October 2004, when Russian President Vladimir Putin and Chinese President Hu Jintao jointly witnessed the signing of agreement defining the two countries' 4,300km border for the first time, including a few islands in the Amur, Ussuri and Argun rivers, which make up China's north-west border with Russia.

Nansha (Spratlys), Dongsha (Pratas), Xisha (Paracels) and another group of small islands - Zhongsha - are archipelagos in the South China Sea, all occupied by the Japanese navy during World War II.

Xisha is contested by PRC and Vietnam. Nansha is contested by PRC, Vietnam, Taiwan, Malaysia (partially) and the Philippines (partially) and comprises 104 islands, reefs, cays and banks. Xisha is about equidistant from Hainan Island and the coast of Vietnam.

But Dongsha - currently with ROC sea patrols - is closer to the mainland than to Taiwan. It is about 160km from Hong Kong but 240km from Kaohsiung.

China stands firm against Japan on the disputed Diaoyu-Senkaku Islands, and may even be encouraging South Korea to do likewise over the disputed Dokdo-Takeshima Islands.

Textiles - a hot topic

China has a number of other ill-defined boundaries; not just its border countries: these days everyone is a neighbour of everyone, and China, due to its size, affects the entire world. This can be seen in relation to its textiles industry.

Bangladesh is affected, a country far from China. And so is Mexico - both countries rely on cheap labour but that is not enough in today’s market. Both countries are in trading competition with China and both produce at the lower end of the market.