Despite government policies designed to woo its wartime opponents - many of whom fled abroad - those linked to the old US-supported regime in South Vietnam still feel stigmatised by communist authorities.

But recent anger at Beijing's perceived aggression in South China Sea territory has led to unprecedented public recognition of southern fighters who stood up to the country's giant northern neighbour.

Vietnam, which has a competing claim with China over sovereignty of the potentially oil-rich Paracel and Spratly island groups, has objected to what it described as Chinese harassment of its ships in the disputed waters.

The issue has stoked nationalist sentiment and in July protesters in Hanoi - the communist north's historic heartland - held aloft the names of 74 South Vietnamese troops who died in a 1974 battle with Chinese forces in the Paracels.

It was the first time "there was a kind of honour" for soldiers from the south, said Nguyen Xuan Dien, a Hanoi scholar who joined the anti-China demonstrations, which were unusual in authoritarian Vietnam.

"I think that the state of Vietnam should have done that before the people," said Le Hieu Dang, 67, an underground communist agent in South Vietnam during the war who now works with the Ho Chi Minh City Fatherland Front, a coalition of state-linked social and other organisations.

Inspired by the action in Hanoi, he and other intellectuals in Ho Chi Minh City, formerly Saigon, held their own tribute to all Vietnamese "who died for the territorial integrity of the nation" in battles against China.

A South Vietnamese navy veteran of the Paracels battle said this recognition was "a very good signal".

"These people died protecting the country, not protecting the Saigon regime."

On the edge of Ho Chi Minh City lies a cemetery containing the graves of hundreds of South Vietnam's war dead.

Communist military units based on the burial ground after the war were removed in recent years and the public has been allowed to mourn in private.

But the site bears scant resemblance to an official war memorial - occasional maintenance has not stopped tall grass from encroaching and while some graves are cared for and adorned with bright flowers, others are moss-covered and crumbling.

Nguyen Manh Hung, a former member of the Saigon government who fled to the United States on the war's final day in 1975, said authorities should turn the site into an official memorial that could attract former veterans.

"Whoever can pull this off and give a speech at the opening ceremony attended by respectable people on both sides of the conflict will have his place in history assured," said Hung of George Mason University in Washington.

He said the nation cannot be genuinely reconciled as long as those who fought for the South continue to be portrayed as unpatriotic "American lackeys", rather than fighters in what was "in a sense, a civil war".

The country was divided into the communist North and US-backed South from the end of French colonial rule in 1954 until April 30, 1975 when northern forces over-ran Saigon.

Hundreds of thousands risked their lives to escape on boats when the war ended. They joined a Vietnamese diaspora that now numbers about four million, many of them in the US, Australia and Europe.

It took until 2004 for the government to recognise Vietnamese expatriates - called "Viet Kieu" - as an integral part of the nation.

As the country moves increasingly closer to its former American enemy, it has implemented policies aimed at wooing expatriate talent and capital including rights to property ownership, visa exemptions and dual nationality.

A government spokeswoman said the measures apply to "all overseas Vietnamese regardless of whether they have worked for the previous regime or not", adding that Viet Kieus contribute significantly to the country's development.

But Dang in Ho Chi Minh City said an unwritten law excludes those with links to the South Vietnamese government from Communist Party membership. This effectively prevents them from working in anything but the lowest levels of the civil service or the numerous state-owned companies.

An open letter to the government signed last month by 38 foreign-based Vietnamese scientists and other experts said there remained "widespread suspicion and distrust" of them within Vietnam's leadership.

"The country and people of Vietnam are demanding that their leaders promote national strengths and unity amongst the entire people, inside and outside the country, to meet present dangers," it said, referring to China.

Dang said it is imperative for both sides to work to overcome their suspicions, otherwise "we cannot create the strength" to counter Beijing's power.

"The war has been over for more than 30 years but the national reconciliation issue is still considered a burning one," he said.

By Ian Timberlake - Agence France Presse - September 27, 2011

Chinese media criticises Vietnam on South China Sea dispute

Chinese state-run media on Monday lashed out at the Vietnam and the Philippines for bringing in "outside forces" like India and US as "bargaining chip" to counter China's claims over the oil rich South China Sea.

In a hard hitting editorial titled "Manila, Hanoi at it again" the state-run China Daily said the two countries were busy making more trouble lately to China by going back on their word to resolve the South China Sea dispute bilaterally with Beijing.

"Both have made it clear that they are trying to invite outside forces into the issue as bargaining chip. Such attempts are doomed to fail too," it said.

"By repeatedly going back on their own word, they not only put their own credibility at stake, but also erode the political trust between them and China."

"For its part Vietnam is involving India in the disputes through a joint exploration project tapping oil resources in the disputed waters.

India has rejected China's opposition to the project claiming its follows international regulations," the editorial said.

It said Manila's proposal to mark Exclusive Economic Zones to enable countries to carry out exploration does not confirm to international law, it said.

The Philippines, along with Brunei, Vietnam, Malaysia and Taiwan, which have claims over various islands in South China Sea also sought US help to resolve their disputes with China.

"China opposes any form of interference from outside forces into its maritime disputes with some South East Asian countries.

It hopes countries outside the region respect and support countries to solve the problem through the bilateral channels," it said.

What the Philippines and Vietnam have done indicates they do not take China's stance seriously.

They also do not take seriously their own vows to avoid exacerbating the disputes and advance bilateral ties with China, it said.

"Hence should China's goodwill in maintaining friendly ties with two countries continue to be exploited, such caprice will be remembered," it said.

Press Trust Of India - September 26, 2011