Shen, with regard to the Lý Dynasty of Dại Viet (in modern northern Vietnam), demonstrates in his Dream Pool Essays that he is familiar with the key players (on the Vietnamese side) in the prelude to the Sino-Vietnamese War of 1075–1077.

With his reputable achievements, Shen becomes a trusted member of Wang Anshi's elite circle of eighteen unofficial core political loyalists to the New Policies Group.

Wang Anshi, in his New Policies sponsored by Shenzong, has enhanced central authority over Song's frontier administrations, increased militia activity, increased troop levels and war horses sent to the frontiers (including the border areas with Dai Viet), and actively seeks loyal supporters in border regions who can heighten the pace of extraction of local resources for the state's disposal.

Officials at court debate the merits or faults of Wang's policies, yet criticism of his reforms even appears in Dai Viet, where the high officer Ly Thuong Kiet publicly announces that Wang's policies are deliberate efforts to seize and control their border frontiers.

Tensions between Song and Lý are at a critical point, and in these conditions any sign of hostility has the potential to ignite a war.

Wang Anshi tells the Song emperor that Dai Viet is being destroyed by Champa, with less than ten thousand soldiers surviving, hence it will be a good occasion to annex Dai Viet.

The Quang Nguyen chieftain Lưu Ky launches an unexpected attack against Yongzhou in 1075, which is repelled by the Song's Vietnamese officer Nung Trí Hoi in charge of Guihua.

Shenzong now seeks to cement an alliance with the "Five Clans" of northern Guangnan by issuing an edict which will standardize their once irregular tribute missions to visit Kaifeng every five years.

Shenzong has officials sent from the capital to supervise militiamen in naval training exercises.

Shenzong then orders that all merchants are to cease trade with the subjects of Dai Viet, a further indication of heightened hostility that prompts the Ly court under Ly Nhan Tông to prepare for war.

Upon hearing the news, the Ly ruler sends Ly Thuong Kiet and Nung Ton Dan with more than one hundred thousand troops to China to carry out a preemptive attack against the Song Dynasty troops.

In the autumn of 1075, Nung Tong Đan advances into Song territory in Guangxi while a naval fleet commanded by Ly Thuong Kiet captures Qinzhou and Lianzhou prefectures.

Ly Thuong Kiet calms the apprehensions of the local Chinese populace, claiming that he is simply apprehending a rebel who had taken refuge in China and that the local Song authorities had refused to cooperate in detaining him.

Dai Viet, formerly Annam (’Pacified South’) to the Chinese, is flourishing under the Ly dynasty.

Vietnamese general Ly Thurong Kiet was born into an Ngo family in Thang Long, the capital of Dai Viet.

His original name was Ngo Tuấn.

His father had been a low-ranking general.

In 1036, he had served the Emperor as a captain in cavalry and later led the imperial guard force.

Because of his bravery, intelligence and loyalty, he had been granted a royal name, Ly Thurong Kiet, and given an important position in the Court.

Wang Anshi, the Song Dynasty prime minister, had told Emperor Shenzong in 1075 that Dai Viet was being destroyed by Champa, with less than ten thousand soldiers surviving, hence it would be a good occasion to annex Dai Viet.

The Song emperor had mobilized troops and passed decrees to forbid all the provinces to trade with Dai Viet.

Upon hearing the news, the Ly ruler had sent Ly Thurong Kiet and Nung Ton Dan with more than one hundred thousand troops to China to carry out a preemptive attack against the Song Dynasty troops.

In the ensuing forty-day battle near modern-day Nanning, the Dai Viet troops had been victorious, capturing the generals of three Song armies.

Ly Thurong Kiet had fought a war with the Cham in 1069, and in 1076 the Song dynasty calls on the Khmer Empire and Champa to go to war again in 1076.

At the same time, the Song commander Guo Kui leads the combined Song force of approximately one hundred thousand men against Ly.

The Song quickly regains Quang Nguyen prefecture and in the process captures the resistance leader Lưu Ky.

Thurong Kiet and Nong Tong Dan defeat the Song militia of Yongzhou in the early spring of 1076, , and during a battle at Kunlun Pass, their forces behead the Governor-General of Guangnan West Circuit, Zhang Shoujie.

After a forty-two day siege, Yongzhou is breached and razed to the ground.

When Song forces attempt to challenge Ly's forces, the latter retreat with their spoils of war and thousands of prisoners.

Much of Wang Anshi's reforms outlined in the New Policies center around state finance, land tax reform, and the Imperial examinations, but there are also military concerns.

This includes policies of raising militias to lessen the expense of upholding a million soldiers, putting government monopolies on saltpeter and sulfur production and distribution in 1076 (to ensure that gunpowder solutions will not fall into the hands of enemies), and aggressive military policy towards China's northern rivals of the Western Xia and Liao dynasties.

The Song have by 1077 destroyed two other Vietnamese armies and marched towards their capital at Thang Long (modern Hanoi).

Song forces halt at the Nhu Nguyet River (in modern Bac Ninh Province), where Ly Thurong Kiet has defensive ramparts built on the southern banks.

However, Song forces break through his defense line and their cavalry advances to within several kilometers of the capital city.

The Vietnamese counterattack and push Song forces back across the river while their coastal defenses distract the Song navy.

Ly Thurong Kiet also launches an offensive, but loses two Ly princes in the fighting at Kháo Túc River.

According to Chinese sources, "tropical climate and rampant disease" severely weaken Song's military forces while the Ly court fears the result of a prolonged war so close to the capital.

Thurong Kiet makes peace overtures to the Song; the Song commander Guo Kui agrees to withdraw his troops, but keeps five disputed regions of Quang Nguyen (renamed Shun'anzhou or Thuan Chau), Tu Lang Chau, Mon Chau, To Mau Chau, and Quang Lang.

These areas now comprise most of modern Vietnam's Cao Bang Province and Lạng Sơn Province.