China faces headaches from warming Vietnam-U.S. ties

U.S. President Barack Obama (L) attends a press conference with Vietnam's President Tran Dai Quang at the Presidential Palace Compound in Hanoi, Vietnam May 23, 2016. REUTERS/Carlos Barria - RTSFGX5

HONG KONG/BEIJING (Reuters) - At a stroke, the U.S. and Vietnam have complicated the strategic outlook for China over the disputed South China Sea.

As U.S. President Barack Obama marked one of his last trips to Asia by the historic lifting of Washington's arms embargo on Vietnam, he repeatedly insisted it was not directed at Beijing.