In China's perspective, Vietnam has greater strength and will to face challenges compared to other South East Asia countries. Although China and Vietnam have close trade relations, conflict is also rapidly increasing. One of the major issues is South China Sea dispute - problems surrounding sovereignty in the South China Sea, oil and gas resources exploitation, fisheries and so forth. How to rationally analyze the relationship between China and Vietnam? What is the strategic approach to deal with Vietnam? All these factors will affect China's relation with other South East Asia countries as well as the settlement of South China Sea dispute.