Vietnam Defence & Security Report Q4 2013 - New Report Available

Alongside the Philippines, Vietnam has the most serious dispute with China concerning territories in the South China Sea. However, while relations between Manila and Beijing have all but broken down, Hanoi has done a better job of maintaining a good working relationship with the Chinese. Managing ties with China is only part of Vietnam's approach to protecting its interests, however.

The Vietnamese defence budget has reached a record high of U$3.7bn for 2013 - still very low for a country of Vietnam's size, but enough to enable some new systems to be procured. On that front, Hanoi is pursuing a dual approach. The first part of the strategy has been to deepen a long-standing defence partnership with Russia. A U$600mn order for 12 additional Sukhoi Su-30 fighter aircraft was placed in August, increasing the size of the Vietnamese Su-30 fleet to 36. The navy is awaiting the delivery of its first two Kilo-class submarines in November and the Russians are working with Vietnam on a range of other defence programmes, including UAV development.

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However, the Vietnamese are also beginning to diversify their supply of military equipment, in particular encouraging ties with the US and Europe. In August, Dutch shipbuilder DSNS confirmed a EUR500mn order from Vietnam for two SIGMA-class corvettes, while France, Israel, Italy and the UK have also been in discussions with Hanoi about defence industry collaboration.

Improving relations with the US could ultimately prove the most significant, though. President Truong Tan Sang visited the White House in July 2013 and signed a new comprehensive agreement with President Barack Obama. While no details of materiel transfers have yet come to light, the US government is understood to be contemplating the sale of second-hand P-3C Orion maritime patrol aircraft to Vietnam.

With both the US and Vietnam wary of China, their strategic interests have suddenly aligned, and Washington is likely to be supportive of capability requests that relate to maritime patrols. Vietnam announced important developments in this area in Q2-Q3, setting up a new Vietnam Coast Guard which will begin operations in October, and consolidating its aerial patrol assets in a newly formed joint air forcenaval brigade tasked with maritime surveillance and search and rescue.

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