China and Vietnam historically have been enemies, and their bilateral relations remain strained. Relations were especially tense during and after the brief but deadly 1979 war in which China invaded northern Vietnam in response to the Vietnamese intervention in Cambodia. Although relations have been normalized since 1991, China's increased maritime activities frequently have put the two countries at odds. As the value of maritime resources grows and as an increasing amount of trade is conducted by sea, maritime matters have become more important for both countries.
Chinese strategy calls for control over the South China Sea, putting Beijing in direct conflict with Hanoi's interests there. China, Vietnam and several other Southeast Asian countries disagree over ownership of the Spratly and Paracel islands in the South China Sea. In 1974 and 1988, China engaged in armed naval conflict with Vietnam, in both cases killing members of the Vietnamese military. Complicating Vietnam's efforts, Hanoi is not competing with just China for resources and influence, but with every country in the region, including the Philippines, Japan, Taiwan and Malaysia.
Vietnam thus needs a strong maritime force to leverage its strategic location in the South China Sea and to protect its economic interests there. The competition is stiff for resources such as oil and fish in the crowded waters east of Vietnam. A larger navy helps Hanoi ensure it is not muscled out of the region. Vietnam's long coastline also makes it vulnerable to attack from the sea, requiring at least a defense force.
To improve its defenses against China and to better position itself in ongoing maritime disputes in the South China Sea, Vietnam has partnered with other countries and greatly increased its defense budget. In the process, it has allocated significantly more money to its navy.
In many ways, Vietnam is mirroring China's anti-access/area denial strategy, albeit on a more limited basis. This strategy is not achieved by building a fleet of aircraft carriers, but rather with anti-ship missiles, submarines and fast-attack missile craft — weapons that will deter aggressors. Vietnam is not concerned about becoming a full blue-water navy, an ambition that does not match its needs and that its limited resources preclude. Instead, it is focusing on defending its maritime territorial claims.
The ongoing Vietnamese naval build-up has resulted in annual naval procurement budget increases of 150 percent since 2008, to $276 million in 2011. It is expected to grow to $400 million by 2015. Currently, Vietnam has six frigates, nine corvettes, 17 fast patrol craft and 30 patrol craft, but it is expanding quickly with Russian help.
For its defense procurement, Vietnam primarily has relied on the Russians, who are more willing to sell the advanced weaponry that Vietnam requires than other countries. Cost also is pushing Vietnam toward the Russians. Despite its growing naval budget, Vietnam is not a rich country, and so must shop for weapons carefully. Even if Russian weapons are not always the best on the market, they are often more cost-effective.
In addition to building a fleet of submarines for Vietnam, Russia also is providing training on operating the six improved Kilo-class submarines Vietnam has ordered. Including weapons and training, by 2018 Russia is to deliver the vessels for $3.2 billion. The Kilo-class submarine is a diesel-electric submarine, making it well-suited for patrolling Vietnam's noisy, shallow littoral. Since 2008, the Vietnamese navy also has taken delivery from Russia of two Gepard-class guided-missile stealth frigates and K-300P Bastion mobile coastal defense anti-ship missile systems.
A March 2013 visit to Vietnam by Russian Defense Minister Sergei Shoigu reaffirmed the strategic alliance between the two countries. In another matter of shared interest, Russian firms are updating and expanding the port of Cam Ranh Bay. The bay occupies a highly strategic location close to the sea-lanes of the South China Sea. Foreign navies have used it for more than 100 years as a deep-water port. Russia used Cam Ranh Bay as a naval base until 2002, when it withdrew for financial reasons. Moscow has since expressed a renewed interest in using the port.
The United States also has an increased interest in Vietnam and this strategic port at a time when the United States is gathering all the allies it can in Southeast Asia to counter China's power. For its part, Vietnam is using this renewed U.S. interest to play Washington and Beijing off each other. If China continues to exert its power in the South China Sea, Vietnam could threaten to make deals with the United States. And if the United States does not help Vietnam, Hanoi could block the United States from using Vietnamese ports.
While Vietnam's naval buildup will not eliminate the competition, it will improve Hanoi's position as it pursues its interests in the South China Sea.