Vietnam, explained.
Vietnam's Prime Minister Le Minh Hung, right, with Laos' then prime minister Sonexay Siphandone in Hanoi, 7 June 2026 (Nhac Nguyen/AFP via Getty Images)
A Chinese facility and a reshuffle in Vientiane are testing old loyalties – Hanoi must now compete on economics, not history.
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Money, not China’s new base, is Vietnam’s real worry in LaosMoney, not China’s new base, is Vietnam’s real worry in Laos
A key question to arise from a new Chinese military presence in Laos is how Vietnam will see the development. The Lowy Institute’s Hunter Marston noted last week that “Vietnam already fears encirclement as China fortifies artificial islands and bases in the South China Sea.”
So when Vietnamese Prime Minister Le Minh Hung met his newly appointed Lao counterpart Saleumxay Kommasith on 8 October (Opens in new window), it was a notable meeting. The language was familiar, reaffirming a special relationship. But its significance was the timing, just over a week after China’s Ministry of National Defence announced the opening of a joint military support and training centre at Ban Keun airport (Opens in new window) and only days after the Lao National Assembly elected Saleumxay prime minister (Opens in new window), replacing Sonexay Siphandone, who became the new assembly president.
Sonexay’s family background gives the reshuffle particular significance for Hanoi. His father, former Lao president Khamtay Siphandone, had especially close ties to Vietnam, whose leaders described him warmly (Opens in new window) as a friend. When Khamtay passed away in April 2025, Laos declared five days of national mourning (Opens in new window), while Vietnam observed two days (Opens in new window).
For Vietnam, Laos occupies a central place in Hanoi’s strategic thinking, shaped by wartime cooperation, shared borders and longstanding ties between the ruling parties. A Chinese military facility there introduces uncertainty into a relationship Vietnam has traditionally regarded as a source of security along its western flank.
Beijing describes Ban Keun as a jointly operated facility for training Lao air force pilots and says it targets no third country. Yet the distinction between a training centre and a more consequential military presence depends on how the facility develops. Satellite imagery has already revealed light attack aircraft and support vehicles (Opens in new window). Its future personnel, equipment and access arrangements will matter more than its official designation.
The leadership reshuffle adds another layer of uncertainty. It is tempting to interpret Sonexay’s departure from the premiership as a setback for Vietnam’s traditional relationships within the Lao establishment. But his transfer to another senior office hardly demonstrates political exclusion. Nor does Saleumxay’s appointment, by itself, establish the victory of a China-aligned faction. His diplomatic career includes education in Russia and Australia and responsibility for relations with Western countries (Opens in new window).
A more useful interpretation is that access to finance shapes the choices available to Lao leaders. From Hanoi’s perspective, the unsettling possibility is that a “pro-Vietnam” orientation is losing ground to a “pro-money” calculation. This need not imply ideological loyalty to Beijing. A government seeking investment, infrastructure and economic stability may accept arrangements whose consequences emerge only gradually.
That process began well before this month’s appointments. Construction of the Laos–China railway started in 2016. In December 2021, Lao leader Thongloun Sisoulith and China’s President Xi Jinping jointly presided over its opening (Opens in new window). Costing approximately US$5.9 billion, around one-third of Laos’s GDP at the time (Opens in new window), the railway demonstrated Beijing’s capacity to turn diplomatic promises into visible infrastructure.
The railway also increased Laos’s financial exposure to China. However, describing it solely as a debt trap overlooks the appeal of cheaper transport and better market access for a landlocked country. Its political significance lies in this combination: genuine development opportunities accompanied by obligations that can narrow future choices. Vietnam must reckon with both sides of that bargain.
Historical intimacy does not automatically produce economic competitiveness.
Delays in Vietnamese-backed connectivity projects make this challenge harder. The proposed Vientiane-Vung Ang railway would give Laos another route to international markets through Vietnam’s coast. Financing difficulties have repeatedly complicated its development (Opens in new window). While China’s railway operates, the eastern connection has struggled to move from ambition to delivery. For Lao policymakers, that difference carries practical weight.
These delays cannot explain the entire shift in regional influence. Rather, they expose a problem that has accumulated over at least a decade: historical intimacy does not automatically produce economic competitiveness. Relationships sustained by revolutionary memory must also offer benefits that younger officials, businesses and ordinary citizens can recognise.
Ban Keun gives this economic competition a sharper security dimension. Alongside China’s military cooperation at Cambodia’s Ream naval base (Opens in new window), it creates another point of Chinese access near Vietnam. This does not establish an operational encirclement. Nevertheless, Hanoi must consider how facilities to its west and southwest could complicate its security calculations, alongside existing pressures in the South China Sea.
Vietnam’s cautious response therefore makes sense. Publicly questioning Laos’s choices could damage trust and encourage the perception that Hanoi expects deference from its smaller neighbour. Quiet diplomacy preserves room for reassurance, clarification and negotiation. Hung’s emphasis on removing obstacles to bilateral cooperation (Opens in new window) suggests recognition that political declarations require practical results.
The task now is to make those results visible: workable transport connections, reliable trade arrangements and investments that expand Laos’s options. Vietnam cannot assume that inherited friendships will indefinitely outweigh competing offers. Its special relationship with Laos remains valuable, but preserving that value requires sustained attention to what Laos needs today. Caution can protect the relationship. It cannot substitute for delivery.
About the author
Buu Nguyen
Nguyen Quoc Buu (Buu Nguyen) graduated from the University of Maine at Presque Isle in the United States. He is currently a graduate student at the University of Padua, Italy.
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