By TREFOR MOSS And VU TRONG KHANH
Flames billow from a factory in Vietnam's Binh Duong province on Wednesday.
As Vietnam seeks to force China to remove a large oil platform it has parked in disputed waters, it must balance rising anger at China at home with the need to protect an economy heavily reliant on Chinese imports—and stay out of a military conflict it can't win.
On Wednesday, serious anti-Chinese protests targeting Chinese-owned as well as Taiwanese factories near Ho Chi Minh City illustrated anger over the oil rig among ordinary Vietnamese and the pressure on Hanoi to retaliate.
Hundreds of people were arrested in Binh Duong province, a hub for garment and footwear production, where local officials said 15 factories were burned and several others damaged.
Taiwan's representative in Vietnam said at least 200 plants had been looted or burned down.
China's Foreign ministry called in the Vietnamese ambassador to relay Beijing's displeasure over the riots and renewed its criticism that Vietnam is provoking the current tensions.
"The one who is shouting the loudest is not necessarily the one in the right," said Foreign Ministry spokeswoman Hua Chunying.
The targeting of Taiwanese factories highlight Taiwan's incidental role in the dispute—a standoff that doesn't involve Taipei, which hasn't actively pressed longstanding claims in the South China Sea for years.
Chen Bor-show, the director-general of the Taipei Economic and Cultural Office in Ho Chi Minh City, said more than 1,000 Taiwanese businesses operate in the Binh Duong area.
"We have no way to assess the damage now because none of the factory owners dare to return to the plants." he said.
"We kept telling the rioters that we are Taiwanese, not Chinese, but they wouldn't listen," said Tsai Wan-chen, the head of the Taiwanese Business Association in Binh Duong, in an interview on Taiwan news station CtiTV.
She said hundreds of businesspeople and their families had gone to nearby hotels andother places for safety.
Vietnamese officials expressed worry about the rioting.
"I am deeply concerned about this because it may hurt the image of the province as an attractive destination for foreign investors," said Tran Van Nam, deputy chairman of Binh Duong province.
He said up to 16,000 workers in industrial parks in the province had joined a protest on Tuesday against the Chinese deployment of the oil rig.
Compared with Japan and the Philippines—also embroiled in territorial disputes with Beijing—Vietnam faces a dearth of options when it comes to handling Chinese assertiveness.
It has no allies to help it in a conflict with China, while both Japan and the Philippines received reassurances on their long-standing defense treaties with the U.S. on President Barack Obama's swing through Asia last month.
The Philippines engages in relatively little trade with China, while Vietnam is heavily dependent on Chinese trade—especially on imported materials which it uses to produce its own manufactured goods.
Roughly a quarter of all Vietnamese imports come from China.
Japan also relies heavily on trade with China, but the dependence is mutual: The sheer volume of Sino-Japanese commerce means China would also suffer along with Japan should their exchange of goods ever be interrupted by conflict.
By contrast, China could sever trade ties with Vietnam without significantly harming its own economy.
Hanoi has embarked on a military buildup to better push back territorial challenges; still, any maritime struggle against China is likely to be hopelessly uneven.
The two countries are bound together by a shared history and strong cultural and economic ties, and relations had appeared healthy when Chinese Premier Li Keqiangvisited Hanoi last October, said Carlyle Thayer, an emeritus professor at the University of New South Wales in Australia.
However, those ties didn't prevent China from challenging Vietnam through the oil-rig deployment, Mr. Thayer said.
Vietnam doesn't have the same luxury of being able to challenge the relationship.
"Vietnam's guiding strategic concepts are to cooperate and to struggle with China," said Mr. Thayer.
That could leave the countries' relationship on hold until Aug. 15, when China has said its drilling operation will cease and the rig may leave the waters off Vietnam.
In the meantime, the standoff is likely to follow the now-established pattern of civilian Vietnamese ships making a show of challenging the Chinese flotilla around the rig, but without any real prospect of their dislodging it.
Old links with the Communist Party of China might provide important back channels that Vietnam can work to prevent further escalation, suggested Renato Cruz De Castro, a professor of international studies at De La Salle University in Manila.
"Vietnam can rely to some extent on those party-to-party contacts," he suggested.
However, this sense of solidarity would count for little if Vietnam felt that it was being targeted by the Chinese, Mr. De Castro said.
From the Vietnamese perspective, capitulation to China is particularly unthinkable.
Once a vassal state of the Chinese emperor, Vietnam has based its modern identity, at least in part, on a history of armed resistance to China and other foreign powers.
In the course of that resistance, it has notched up some proud military victories against superior enemies, not least when it repelled a Chinese invasion in 1979.
But at the same time, Vietnam is reluctant to pick a fight with China that it knows would most likely end in a humiliating defeat.
Vietnam possesses a huge land army of some 412,000 troops, according to the International Institute for Strategic Studies, a London-based think tank, but has relativelyweak air and naval forces.
It has recently ramped up investment in modern equipment, such as Russian submarines, new ships and antiship missiles, but these aren't yet in place.
As a result, the Vietnamese navy has played no part in confronting the Chinese flotilla protecting the oil rig—only civilian Coast Guard ships have been deployed, even though Vietnam says the Chinese contingent includes several military vessels, something China has disputed.
"Vietnam has no military options," said Mr. Thayer.
"The Vietnamese military are very concerned not to get involved. Whatever scenario you choose, the billions of dollars they've been spending on new toys could disappear tomorrow" in a potentially crushing Chinese response, he predicted.
Faced with these harsh realities, Mr. Thayer said there is little Hanoi can do.
"They are stuck with having to suffer this until China agrees to high-level talks."