On June 26th–a month after the first of the recent incidents –Vietnam and China announced that they have agreed to hold talks on resolving the sovereignty conflict. It is too soon to tell which direction these talks might take, whether they can be considered a success of China’s attempts to resolve the dispute bilaterally or whether this overture might just be the beginning of a wider process, which might subsequently include other countries.

The U.S. will continue to try inserting itself into the negotiations, but the prospects of success in achieving this goal or of resolving the actual conflict are slim given China’s fervent opposition to outside intervention.

While a comprehensive solution to the dispute is likely to remain elusive in the short-term, the risk of the worst-case scenario playing out – larger-scale conflict – remains high, as the Global Observatory reported previously. A political process could defuse this risk. However, this would require exploring arbitration mechanisms and corresponding legal frameworks, addressing the regulation of oil and gas exploration activities head-on, and giving equal status to the issue of fish stocks in the negotiations, given the economic significance of this issue for large parts of the affected populations.

While seeking U.S. support is a tempting option, ASEAN states could gain more from consolidating their positions, working out differences between them, and presenting a unified position to China.