HANOI, Vietnam – Defense chiefs from former foes Vietnam and the United States met Monday in Hanoi to ramp up ties at a time of rising tensions in the South China Sea.

In Hanoi’s searing hot mid-morning sunshine, defense chiefs of two nations once at war took part in a poignant exchange of war memorabilia, the diary of a Vietnamese soldier killed in action and letters written by an American officer serving in Vietnam.

The symbolic gesture was part of Defense Secretary Leon Panetta’s visit to the country following the annual Shangri-La defense dialogue in Singapore.

Panetta’s arrival on Vietnam Sunday marked a symbolic deepening of ties between the two when he became the highest ranking American official since the war to visit Vietnam’s commercial deepwater port, Cam Ranh Bay.

He visited the USNS Richard E. Byrd, a civilian crewed naval cargo ship currently undergoing maintenance at the port.

“The fact that this ship is here in Cam Ranh bay, and is being serviced by contractors here in this location and the repair work is being done by our Vietnamese friends, that is a tremendous indication of how far we have come,” said Panetta.

The ship is the fifth vessel to be repaired in Vietnam after the country agreed to conduct minor repairs on non-combatant U.S. Navy ships.

By allowing this visit, Vietnam is making a statement that the United States has a legitimate interest in the maritime affairs of the South China Sea, says regional security analyst, professor Carl Thayer.

“China is saying the U.S. is an outsider and shouldn’t get involved and so for Vietnam instead of having to align with the United States to balance China it does what it does best, it tells the U.S., ‘your interests are to provide security, go to it! And we’ll give you facilities to repair ships,'” he said.

Panetta’s trip to Vietnam comes after a weekend announcement that the U.S. Navy would shift the majority of its ships to the Pacific by 2020 as part of a strategic focus on Asia.

He stressed the move was part of a broader global re-balancing rather than a strategy of containing China because of its vast territorial claims in the South China Sea.

Speaking with reporters in Hanoi, Panetta said the U.S. considers itself a member of the family of Pacific nations and wants to increase peace and prosperity in the region.

“The key to that is that we have a shared group of values and principles that all countries have to abide by and we will always continue to follow international rule, international regulations and international law,” said Panetta.

China claims much of the resource-rich South China Sea as its own territory, and Chinese fishermen and government exploration ships have come into conflict with vessels from neighboring countries in recent years. Chinese officials have said the territorial dispute does not concern the United States.

But in Beijing Monday, Liu Weimin from China’s Ministry of Foreign Affairs responded to the U.S. defense secretary’s visit by saying peace, cooperation and development are trends of the times.

He says the Asia Pacific is where Chinese and American interests converge the most and he hopes the United States will respect the interests of all people in the Pacific – including those of China.

Vietnam and the United States may have a lot to gain in gradually strengthening ties, but this will only go so far, says Thayer.

Vietnam Defense Minister Phung Quang Thanh says he hopes the U.S. will soon lift restrictions on the sale of lethal weapons to Vietnam, but Professor Carl Thayer is doubtful this will happen any time soon.

“American equipment is too expensive,” said Thayer. “It’s a whole new different technology. Staying with Russia, Ukraine, Belarus, it’s all compatible equipment, it all goes back to the Soviet era.”

He says the recent country report on human rights in Vietnam issued by the State Department does not support changing U.S. policy. And, with an election looming in November, he says it is unlikely Washington will make a significant shift in its relationship with Vietnam anytime soon.