Vietnam shops for US arms in face of assertive China

HO CHI MINH CITY — Vietnam’s military is going shopping. Anxious about a more assertive China on its doorstep and frictions over territory in the South China Sea, officials in Hanoi recently hosted a group of foreign defence contractors looking to sell the Communist nation everything from radar systems to night-vision technology and aircraft.

The military’s top officers were not present because of the sensitivity of hobnobbing with American defence companies eight days before celebrations for the 40th anniversary of the defeat of the United States and its allies. But the meeting shows how Vietnam’s leaders are looking past ideology to practical realities.

“There are no permanent friends or enemies, only permanent interests,” said Mr Alexander Vuving, security analyst at the Asia-Pacific Centre for Security Studies in Hawaii.

Squeezed by slower US military spending, defence firms are looking to South-east Asian nations for new markets, capitalising on their concerns about China’s outlays on long-range planes, ships and submarines. The April roadshow, organised by the US Embassy, follows Washington’s easing of curbs on sales of non-lethal defence systems to Vietnam last October.

“In the coming months there will be more conversations, meetings and trips back and forth between American companies and their potential Vietnamese clients,” said Mr Vu Tu Thanh, chief Vietnam representative of the US-Association of South-east Asian Nations (ASEAN) Business Council, who attended the day-long symposium. “There is a surge of interest among American defence contractors.”

More than a dozen defence companies, including Boeing, BAE Systems, Lockheed Martin and Honeywell International were invited to the April 22 event. “The symposium sought to promote US firms in Vietnam,” US Embassy spokeswoman Lisa Wishman said in an email.

“Any defence-related sales to Vietnam will follow development of US government policy on Vietnam,” Boeing spokesman Jay Krishnan said in an email. “We believe Boeing has capabilities in mobility and intelligence surveillance and reconnaissance platforms that may meet Vietnam’s modernisation needs.”

Vietnam’s Foreign Affairs Ministry did not respond to emailed questions about the country’s interest in US defence systems.

“New markets only occasionally open up,” said Ms Karen Adams, director of international business development at Exelis, which provides night-vision technology. “There was obvious interest from both the US and Vietnamese side.”

Vietnam’s military will be eager to buy spare parts for US military aircraft left behind after the war, said Mr Tuong Vu, associate professor of political science at the University of Oregon. Vietnam will spend several years reviewing what the US has to offer and what fits with the country’s current systems, Mr Tuong said.

“They got the ban lifted and they have started shopping for weapons,” he said. “The military is especially happy about that.”

Vietnam’s military spending has risen 128 per cent since 2005, reflecting its territorial tensions with China, showed an April report by the Stockholm International Peace Research Institute (SIPRI). Its defence budget jumped 9.6 per cent in 2014 to US$4.3 billion (S$5.7 billion), it said.

The US is providing Vietnam with six patrol boats, part of a military aid package worth US$18 million.

Vietnam is expected to continue its pace of military spending, senior SIPRI researcher Siemon Wezeman said by phone. “Its economy is not in a crisis and there are security issues.”

China placed an oil rig in the South China Sea last May near the Paracel Islands claimed by both countries, triggering a diplomatic row. Its work to create artificial islands in the region, with satellite photos showing dredgers reclaiming land in seven areas, has drawn criticism from Vietnam and other countries.

Still, Vietnam, which has long relied on Russia for weapons, is unlikely to become a major US client, said Mr Collin Koh, associate research fellow at Singapore’s S Rajaratnam School of International Studies. Russia supplies Vietnam with planes and submarines — the third of six kilo-class submarines was delivered in January — and is helping build a nuclear power station.

“Russia has always been willing to get them whatever they required,” Mr Koh said. “Vietnam is not going to want to jeopardise that relationship.”

Vietnam is interested in US technology such as advanced surveillance systems, he said.

“The Vietnamese do have short-range surveillance systems on its coast,” Mr Koh said. “They may be able to spot a huge target, but they have no idea what it is. It could be an aircraft carrier or a large tanker.”

The US places conditions on weapons sales that could hinder efforts to sell systems to Vietnam, whose human-rights record has been criticised by US Congress members, Mr Wezeman said. More than 150 dissidents are detained in Vietnam, said Human Rights Watch.

Vietnam faces a steep learning curve on how to navigate the complex process of buying US military equipment, said Mr Murray Hiebert, Washington-based senior fellow at the Center for Strategic and International Studies, in an email.

The Hanoi symposium provided US companies with an understanding of Vietnam’s procurement process, Mr Thanh said. There were one-on-one huddles between company representatives and Defence Ministry officials, though no deals were announced, he added.

“It was very business-like,” he said. “The Americans were excited. One of the Americans stood up and asked, ‘Can you tell us the annual defence budget?’ The general at the podium said, ‘I know it, but I can’t tell you.’” BLOOMBERG