The SW South China Sea preserves a propagating oceanic spreading centre and associated continent–ocean transition (COT) that characterizes the continental margin offshore SE Vietnam. We investigated the nature of strain accommodation in the region immediately in front of the propagating rift using a combination of 1- and 2-D backstripping subsidence reconstructions, coupled with forward modelling based on the measured upper crustal extensional faulting applied to a flexural cantilever model. Major normal faulting ceases after an inversion event at ca. 16 Ma, although moderate extension was also noted at 22–23 Ma, representing the end of an extensional phase that initiated around 28 Ma. 1-D subsidence models indicate rapid ‘syn-rift’ subsidence, possibly lasting until 10 Ma, despite the lack of observed extensional faulting. We show that depth-dependent extension is required to explain the great depth of the basins despite the modest observed upper crustal faulting. Brittle faulting could not have extended much deeper than 10 km, suggestive of weak crust in the presence of high heatflow. The regional topographic slope on the basement suggests very low mid-crustal viscosities of 1019–1020 Pa.s., consistent with the idea that flow in the ductile mid and lower crust was responsible for much of the subsidence prior to, and possibly after, seafloor spreading, which extended ca. 300 km from the tip of the mid ocean ridge. Flow is inferred to be dominant towards the spreading centre prior to 16 Ma. Extension in the COT postdates seafloor spreading and further supports the idea of this crust being very weak, albeit with more coherent, less extended crustal fragments, now forming banks offshore the Sunda continental shelf and surrounded by hyperextended crust of the COT.