Vietnam will continue to make strides in strengthening its ties with the West, particularly with the US. Vietnamese-US diplomatic ties have been bolstered by high-level exchanges in recent years, and the economic relationship between the two countries has developed rapidly. Military links have also become dramatically closer, as highlighted by joint military exercises in the South China Sea in August 2010. Despite these positive trends, US concerns over human rights and religious freedom in Vietnam will remain a source of bilateral tensions. However, such stress will not cause anything more serious than the occasional diplomatic spat. The US views Vietnam as an important ally in Asia, while Vietnam has both an economic and a security interest in maintaining close ties with the US. Although keen to become closer to the US, the current leadership in Vietnam will also seek to maintain strong relations with China. However, the two foreign policy objectives could prove difficult to balance.

The most significant unresolved issue between Vietnam and China concerns competing claims to the Spratly and Paracel islands in the South China Sea, particularly in view of China's increasingly assertive approach to matters of sovereignty. In addition to claims by Vietnam and China of full sovereignty over the islands, the Philippines, Brunei, Malaysia and Taiwan have also made full or partial claims. The dispute is unlikely to be resolved within the next five years, but all the claimants have signed the Declaration on the Code of Conduct in the East (South China) Sea, which was initiated by the Association of South-East Asian Nations (ASEAN) and commits signatories to "resolving all disputes through peaceful negotiations in accordance with international laws and practices". However, the disputed area is becoming increasingly important strategically, as it is believed to contain oil and gas deposits and is also an important shipping route. During its chairmanship of the ten-member ASEAN last year, Vietnam was successful in bringing the topic of the South China Sea to the top of the group's agenda and Indonesia, which currently holds the chairmanship, has said that it would take up Vietnam's goal of establishing multilateral talks on the issue. The US government has been pushing for a multilateral solution to maritime border disputes in the area, and this has angered China. With the support of the US, smaller nations, such as Vietnam (where mistrust of Chinese motives runs deep), could be encouraged to band together to resist China's overtures and its rapidly growing military might.