THE PARACEL ISLANDS INCIDENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00353R000100010005-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 7
• Document Creation Date: December 14, 2016
• Document Release Date: July 10, 2003
• Sequence Number: 5
• Publication Date: January 21, 1974
• Content Type: MEMO

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21 JAN 1974
1. Our information on the sequence of events that
led to this weekend's clash between Chinese and South
Vietnamese forces in the Paracels is extremely sketchy.
The available record, however, suggests that it was
Saigon that took the key initiatives last week. Both
sides clearly have been motivated in large measure by
the growing importance of the islands in the South
China Sea as a potential source of oil.
BACKGROUND TO THE CLASH
2. The Paracels are a group of small coral islets,
reefs, and rocks--none more than one square mile in
area. Sovereignty over them, as well as over other
island groups in the waters bounded by China, Vietnam
and the Philippines, has been a subject of dispute
since early this century. Japan occupied all these
islands during the second World War. With the signing
of the 1951 peace treaty Tokyo renounced claims to'both
the Paracels and the Spratly Islands, which liesouth-
east of the Paracels; at that time Taipei claimed
sovereignty over the Spratlys and the Paracels, the
colonial government in Vietnam claimed the Paracels,
and the Philippines claimed the Spratlys. Shortly
thereafter Peking claimed the Paracels, the Spratlys,
and the Macclesfield bank, which lies between them.
The South Vietnamese have subsequently claimed that
France turned the Spratlys over to them. The Re-
public of"China maintained a small garrison of
islands of the Amphitrite subgroup, the northernmost
DIA and DOS review(s) completed.
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section of the Paracels, but withdrew its forces in
1950. Since 1955 Peking has garrisoned most of the
Amphitrite group, concentrating on Woody Island,
which it may intend to develop into a forward base
for its southern naval forces. In recent months the
Communist Chinese have also constructed. an oil rig on
Woody Island.
3. The present trouble dates from a South Vietnam-
ese statement issued in September, which reiterated a
claim to the Spratlys. Initially Peking chose to ig-
nore this claim, but on January 11 it responded with
a foreign ministry statement reaffirming the Chinese
claim to the Spratlys, the Paracels and the Maccles-
field Bank. For the first time Peking also formally
claimed the "natural resources in the sea around" the
islands. At about this time the Chinese also sent
some fishermen to the Crescent group, where according
to the South Vietnamese, they set up huts and raised
the Chinese flag. This apparently was a low-key
move designed to assert Peking's claim to the Crescent
group.
4. At this point Saigon switched its attention
from the Spratlys to the Paracels. Early last week it
sent a naval force to the Crescent group, with small
contingents of marines that landed on islands not
normally garrisoned by South Vietnam. These moves
apparently forced the withdrawal of the fishermen.
The Chinese were evidently prepared for this coi'tin-+
gency and may well have anticipated it. Following
South Vietnamese firing on Chinese fishermen on Dun-
can Island on January 16 they dispatched military
units south, intervening with sizable naval and ground
forces, as well as with air strikes. On January 18
the South Vietnamese were forced to pull out their
naval units, abandoning the marines (who were accom-
panied by a US citizen from the Defense Attache's
Office in Da Nang) on the islands.
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5. In large part the clash clearly is an outgrowth
of the gradually increasing importance of all these is-
land groups--an importance based largely on the possibility
that significant oil deposits may lie in the waters off
Indochina. Saigon granted its first exploratory conces-
sions last year for the seas near South Vietnam; Hanoi
has been dickering with the Japanese and the Italians on
the exploration of the Tonkin Gulf; the Chinese have
been moving on their own to get into the offshore oil
business. Exploration in disputed areas of the South
China Sea will obviously be held up as long as the
sovereignty issue is up in the air. All the parties had
been moving gingerly up to the last week, however. The
real question is which side, through calculation or
miscalculation, upset the delicate balance in the Para-
cels.
move of Chinese fishermen into the Crescent group.
6. The question is somewhat moot, since both
sides were becoming more assertive and both clearly were
ready to move. The key step in the escalation, however,
appears to have been Saigon's military response to the
Moreover, Saigon's military
activities have been accompanied from the start by a
heavy output of public commentary, whereas the Chinese
did not comment publicly at all until January 19.
7. If the key initiative was in fact Saigon's,
we can only speculate on South Vietnamese motives.
Saigon may simply have decided that even a civilian
presence in the Crescent group was intolerable and
that now was the time to make good its claim. It may
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 .Canton
t io HONG KONG
MACAO W ,K,)
(Port.)
MACCLESFIELD
BANK
SOUTH
PHILIPPINES
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The Paracel Islands in the South China Sea
CHINA
SEA
MALAYSIA /
(WEST) f
IN, E)014ESIA,
-`SUMATRA
INDONESIA
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(EAST)
,Taipei
ROPUBLIC
OF
CHINA
TAIWAN
>LUZON
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Paracel Islands
AMPHITRITE
GROUP
CRESCENT GROUP
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