June 9th, 2010
02:08 AM GMT
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It’s been more than a decade since I was last in Ho Chi Minh City.  The city then was dusty, noisy, frantic and, well, disorganized – a lot of energy but not a lot of focus.

But there are very few cities in Asia that you can return to after 10-year absence and expect things to be the same (except, perhaps, for Yangon and Colombo). Ho Chi Minh in 2010 is booming. The familiar landmarks are still there but this city is spreading - upwards and outwards.

This is what 10 years of an average annual growth of 7 percent looks like: The streets are even more clogged with motorbikes but now compete with a stream of Toyotas, Kias and Fords. The city center is clean - the dust in the air now is from building sites rather than badly-paved roads. (From my hotel room looking across the bustling Saigon River I can see perhaps 20 cranes perched on top of semi-completed high-rises.)

The brand name stores are starting to appear although still – some would say thankfully –no sign of McDonald’s.

To say Vietnam is open for business is an understatement – and this Southeast Asian growing powerhouse is deadly serious about drawing foreign business.

The World Economic Forum’s East Asia meeting chose Ho Chi Minh City (or Saigon, if you prefer) for its first event in a true emerging market. Organizers were expecting about 250 to 300 business people this week, but more than 400 came from across the world.

The government is out in force too. Prime Minister Nguyen Tan Dung is everywhere, chatting up the opportunities. He wants Vietnam to be Asia’s manufacturing base of choice after China.

It’s a tall order, and at the moment Vietnam is seen as a production base for lower value-added goods like textiles, furniture or footwear.

But times are changing. Samsung and Canon are both investing heavily in electronics manufacturing and service bases. Most of the big Asian carmakers as well as Ford are producing for the local market with an eye on exports later down the line.

I met Tom Schneider, a German businessman who has just outlaid $12 million to build a tanning factory at an industrial park on the outskirts of Ho Chi Minh City.

Forthright and ebullient, Schneider’s built eight factories in Asia in the past 16 years. In Vietnam it took him just 22 months, from finding the land, building the factory, and training the workforce – his fastest project anywhere.

He now produces 80,000 hides a month, enough for about 1.5 million pairs of shoes. Timberland is his biggest customer.

And he’s quick to point out that although tanning is “environmentally hostile” his new plant is greener than his existing plant in China, which has received a silver medal standard for environmental protection from Timberland.

So why move to Vietnam?  It’s cheaper. Labor costs are about 60 percent of China’s although senior management is still more expensive. The country is close to many of his key customers, and there’s little state intervention, as long he observes workplace and environmental standards.

And in the long run, Vietnam has key access to a vast and cheap labor pool across the borders of Cambodia and Laos.

It’s not all upside. Transport links are still – as Tom describes – at the same level as China in 1988. And the law is still open to interpretation (nearly all big foreign investors insist in any contract on having litigation settled in an offshore court).

Foreign investment is coming. In 2008 about $70 billion was committed to Vietnam, up more than threefold from five years year. It’s fallen back to $20 billion last year. Not surprising, though, given the global economic picture.

I asked the Prime Minister how he would describe Vietnam’s economic model.

Vietnam, he replied, is a socialist system embracing capitalism. Helping the poor get out of poverty through foreign investment is key to his planning, he says.

Like China, Vietnam’s government looks long-term. And like China, it appears to be achieving its economic goals.



soundoff (76 Responses)
  1. Rajendra Aneja

    I agree with the views of the author. I was in Vietnam, for about a week, in May 2010. I was impressed with the energy, zeal, committment and integrity of the poeple of this beautiful country, to improve their economic lot and for their country to find its rightful place in the new economic order in the world. Every Vietnamese I met, was anxious that the country should be seen as modern and growing. Vietnamese are honest and very sincere – rare qualities to find in many parts of the world, in the made rush for material success.

    The Vietnamese are buzzing with activity, and have yet retained their age-old charm and manners.

    Also, there is no bitterness towards America or the West for the 25 year war, which crippled the entire country and the people. "We are Buddhists," they say, "and we must move forward with equanimity."
    I fell in love with this pretty country and its beautiful people.

    June 9, 2010 at 4:18 am |
  2. eden

    The 'winds of change' are increasingly, and ironically, coming from the east.
    I would LOVE to see Marx's reaction to this communism after effect!! rolf

    June 9, 2010 at 4:31 am |
  3. Jerkinp

    Its pretty funny how the Vietnam War seems so pointless. All those years of fighting, the usage of toxic defoliants and drafting Americans into the army. What a waste of lives and resources. In the end all the Communist countries except for Cuba turned towards a capitalistic economic system.

    P.S. North Korea is cultist state and not Communist.

    June 9, 2010 at 4:33 am |
  4. ecph

    Growing? Prosperous? Yes. Next China? No. Vietnam lacks the attendant ascetism of communism and is already spending its newfound wealth. China sacrificed domestic consumption for decades and now has free-flowing capital without the need for free-flowing capital markets, as evidenced by the surge of real estate and other asset acquisitions made by mainland Chinese in Hong Kong and elsewhere nearby...all in cash. Also, Vietnam does not have U.S./EU consumerism by the balls like China did and still does. Signed, Vietnamese emigrant now living in HK and working in China.

    June 9, 2010 at 4:35 am |
  5. fvwl

    "Helping the poor get out of poverty through foreign investment"... get real, please, helping the poor by giving them job of 50-80usd per month!

    Following the 2009 statistics, my country is in the "Golden population", with 50% of the population between 15-60 yrs old. OK, but with a very poor foundation, only capable of basic manual work. After 30 years, when this work force get older, when there are more children, the situation will be hopeless.

    The right thing to focus on is education, which has been always failed to achieve. Under this regime, what we expect to see is a country of 100mil manual workers, where all the hard-earned dollars go right into the Dear Leaders' pockets.

    From Vietnam With Love

    June 9, 2010 at 5:03 am |
  6. hen

    I love Vietnam!

    June 9, 2010 at 5:04 am |
  7. Ilya

    Vietnam is not a new China and will never be if one just takes onto account obvious difference in population and land mass of two countries.
    The author should also have mentioned corruption which has been "growing" annually as well.
    Re "vast and cheap labor pool" in Cambodia and Laos – author should at least check the basic demographics of these countries. Together they have less than 25% of Vietnam population :) Then you should take into account that Laos is land locked country which would make any goods/raw materials transportation much more expensive compared to Vietnam or even Myanmar.

    June 9, 2010 at 5:06 am |
  8. Tienhoa

    The report reflect a real landscape about the economic development of Vietnam in recent years. Although its economic growth is about 7% annually, there are many challenges Vietnam's government is coping with such as pollution, poverty, migration etc. Like China, the cost of economic development is huge in Vietnam, in particular, in environmental. Thus, the balance between economic growth and environmental protection is crucial for sustainable growth.

    June 9, 2010 at 5:14 am |
  9. myawr

    Looking at out debt plz. The country is not as rosy as the article describes.

    June 9, 2010 at 5:56 am |
  10. Cuong Pham

    welcome to Viet Nam!

    Look back 25 years after reform, Viet Nam is step by step getting economic achievement, better society and get out poverty. The government always help foreign investor solve problem with best way they are, the performance increase well every way, every home, even on tiny the corner of the street. Hoping investor will recognize really potential power in Viet Nam.

    June 9, 2010 at 6:01 am |
  11. BabyT

    All i can say is good on em.

    June 9, 2010 at 6:22 am |
  12. nice

    good for you vietnam...china's economic model is the best model for any developing economy, a developing economy can never grow if there is complete and utter capitalism, not even the US supposdely the biggest believer of capitalism ever got out of an economic crisis without government intervention...

    u need to help both the poor and the the business men, even if it takes more resources and slows growth a bit, id rather have food and medicine today then wait for my grandchildren to have it in the name of capitalism

    June 9, 2010 at 6:39 am |
  13. Marius

    I hope that my country will be better than China, we have the potential.
    Visit Romania and my romanian site http://www.freelinedesign.eu , now in english too.

    June 9, 2010 at 6:39 am |
  14. CHINA

    New China still lays within China, as 6-8 times of Vietnam's population are living in the provinces of interior (western) China.

    Better not spoke too soon, wait till Vietnam have enough highways, railroads, sea ports and airports. labour might be lower than those on costal China, but the net cost is driven largely by transportation, management, and local governments support.

    June 9, 2010 at 6:50 am |
  15. budd1dogg

    The Asian giants are awakening, we had better to be careful;history is repeatig itself. The Western countries are decadent nations, we are going down hill. They are patient. Vietnam slowly but sure will achieve its economic goals. Low wages, hard working people, a load of patriotism, devotion and sacrifice are the the right ingredients for success. And,don't forget, its youths are not degenerating in drugs,at least at present, like the ones in the Wester countries.

    June 9, 2010 at 7:01 am |
  16. minoriju

    I can not understand the economic growth.
    Only, Vietnam seems to refuse democracy and pray probability uniformity through 25 years' wartime.
    Of course, the age, although is hard to understand standard, it was the really wrong war.
    ( of course, Korean War does not sees long drawn-out war and seems to overlook the country named China. Do not exchange commander among the war of course. The United States overlooked these all ) I Vietnamese capitalism introduction welcome.
    Show that capital is only rich and powerful cosmetic energy to Asians, what meaning that catch direction concretely because is not included be.
    Of course, in South Korea life although made plenty capital it other other Asias dominoes become seem to.
    We must be able to divide lie culture and the lie war.
    It is message that is the most necessary to the United States that act as top of earth Old World now.

    June 9, 2010 at 7:02 am |
  17. Sonny

    There are unmistakable developmental similarities such as an export-oriented economy based on cheap labor, high influx of foreign investments and low currency devaluation; however, differences do exist in terms of population density and purchasing power parity (80 mill vs. 1.3 billions–about 100 millions potential Chinese consumers in the big East w/disposable incomes!). It'll be at least another decade or two for Vietnamese consumers to reach the consumer developmental thresholds where they can begin to hoard American-made products in significant volume. For now, the country enjoys an edge over its northern neighbor over rising anti-Chinese sentiments in the West and competitively low-balling the Chinese already low wages.

    June 9, 2010 at 8:12 am |
  18. Rajendra Aneja

    Yes, in view of recent developments in Vietnam, the entire war, in retrospect seems so pointless and stupid. The Vietnamese lost 3 million lives, the Americans lost 300,000. For what? To stop communism! Communist is an ideology. When it’s time is over, it will ebb, as it has done in Russia and China. Then what was the point of the 25 year Vietnam war? Plain misery and death seem to have been the only outcomes.

    The War Museum in Saigon details the human suffering in the country through pictures and news stories. The country yet has a smattering of American tanks and helicopters, which were left behind. And the Cu Chi tunnels, running into 200 kilometres, under the ground, when where the Viet Cong fought, yet exist as a tourist lure.

    A visit to Vietnam, reveals how wrong our leaders can be, in fighting unnecessary wars, on some ideological point or personal anger. The Iraq war, is another battle that could have been tactically avoided.

    It is sad that out elected leaders, frequently lack the maturity and intellectual sagacity to handle issues, in a peaceful manner.

    What did the Vietnam war of 25 years achieve? Vietnam is turning to capitalism, of its own accord!! But, 3 million Vietnamese, and 300,000 American homes, lost their loved ones, and are bereaved! What a shame.

    June 9, 2010 at 8:56 am |
  19. hughes

    Sonny, do you even know what you're talking about, or are you just regurgitating a bunch axioms you've heard and/or read elsewhere? Sorry, Vietnam does not enjoy an edge over China due to sentiment. If only it were that simple.

    June 9, 2010 at 9:35 am |
  20. Ronny

    Vietnam will be not a new China but a new powerhouse for SE Asian region. All businesses what Thailand is loosing right now goes to Vietnam. Large factories are closing faster than you eat your burger. Vietnamese motivation to work is outstanding comparing to Thais. They take responsibility what they do. Even Vietnam is "communist" but it offer much more to Investors and to those who wish to built their factories to SE Asia. I do have factories & businesses in Thailand for about $50M USD worth but almost half of it is already in Vietnam (move which was done within 2 years). Sorry Thailand – you lost the investor battle. Vietnam – great and highly recommended opportunity for many choices.

    June 9, 2010 at 9:48 am |
  21. Gloria

    I work for a company who owns a factory in Vietnam. I have been many times. It does have many advantages as mentioned in the article, the lack of state intervnetion creates a culture of "funny money" (bribes) and serious curruption. We have been robbed by upper managerment and suppliers (working together) more times that we would like to admit. I think Vietnam has a lot of potential as an emering market but until a general socialital shirft occurs I think that it will remain "almost china".

    June 9, 2010 at 9:57 am |
  22. MDThong

    Of course, there are a lot of challenges for Vietnam's government in the world economic crisis like this. I think, the Vietnam's government shall consider some solutions to improve the Vietnam ecomomic again. For example, the Vietnam's government want to build a high speed train from Ha Noi capital to Ho Chi Minh city with distance approximately 1800km (about 300km/h). Total estimated capital is approximately. 56 USD billion (It can be 100 USD billion in reality). It is a very huge amount of money for Vietnam now and of course almost of this money shall be loaned from the foreign countries. I think, with this loan, Vietnam shall be repaid for a very long time, from generation to next generation. Do not like China, Vietnam is a poverty country, annual trade deficit so from my point of view if Vietnam want to grow the economic like China, the Vietnam's goverment must change such as reducing corruptions, reducing to export the energy like coal, unrdefined oil, administrative produres, reducing the foolish ideas in planning projects v.v... developing infrastructure, educational, healthy v.v...
    As a Vietnamese, I always want my country to development rapidly as soon as possible. I love my beautiful country so much and hope a lot.
    From Ha Noi, Viet nam.
    Best regards!

    June 9, 2010 at 10:13 am |
  23. Tam

    The article reflects a part of the country. Vietnam is now really beautiful, energetic, active, and more ambitious, etc... Vietnam does not lack the talented people and this is recognized by the world. However, the difference between the rich and the poor is shaping clearly. The projects for poverty reduction are everywhere in Vietnam, a major of population is suffering the poverty and corruption, etc.. And more importantly, the country does not know how to use its talented people although there is a large number of people coming back to serve their homeland.

    Vietnam only becomes a new China in the future if it can handle the corruption, take care of the poor, improve education, and welcome its talented young people with a "real" red carpet.

    June 9, 2010 at 10:49 am |
  24. DominicThai

    I was born in Vietnam and fled the country when I was 14, after 30 years living in Australia. Everytime I went back to visit my family, the custom officers asked for money, if you don't give them the money, they would turn your luggage upside and take what they want. The country is totally corrupted from the top to the bottom, the traffic police takes bribes. Everyone in Vietnam knows what the system like.Money talks.

    June 9, 2010 at 11:26 am |
  25. famster

    Dominic: I have been to Vietnam many times and I didn't have to pay a penny to custom officers. They are within their legal rights to inspect your luggages and unless you bring in something that is illegal or exceeding the allowed limits, no confiscation would happen. It makes no sense that you wrote "they take what they want" because if it were true to what you said, visitors to that country wouldn't be increasingly on the rise like what has been happening.
    Bribery happens, of course, but if you bring something that you want to avoid paying taxes on, although wrong, bribes are the cheaper way to go. In that case, you are as much at fault as the one who accepts the bribes.

    June 9, 2010 at 2:54 pm |
  26. Hien

    That is not truth, if you have something to hide then you give them money. which is you are the one who support for their corruption. In Vietnamese we have words for "The straight tree is NOT scare about the wind" I live in US, I visited my parents and went through custom officers without any problem. I don't like Communism, because it is foreign ideological which against the Viet's values. Fairly the Vietnamese gov. has been pulling people out of poverty from 90% to 15% with in less than 20 years, because US embargo VN after the war and Chinese invaded the country 1979 and 1988. We did not have anything to eat. My brother and I had to go to the jungle to dig the wild potatoes to keep our family to survive.
    Compare 1 million Vietnamese die because they were hungry in 1945 when Japanese troops used RICE to burn into the train engines to transport their war equipments, gun etc... The Vietnam war pushed the Vietnamese back to the cave men. With the strength, the Viet people will deserve for better life and keep the values for thousand of years pass to against any invaders.

    June 9, 2010 at 3:17 pm |
  27. Bill Hayton

    Anyone looking to find out more about Vietnam might want to read my book – recently published. It's called Vietnam: rising dragon and it's published by Yale University Press. The New York Review of Books called it 'very good' and the Irish Times said it would "appeal equally to a businessman or investor seeking a briefing on Vietnam, an old Asia hand, or an inquisitive backpacker."

    June 9, 2010 at 3:21 pm |
  28. Tuấn

    Vietnam is a beautiful country, dynamic, people get along, happy friendly.
    While the offline world economy but also showed the WTO steps instead
    change in this nation, even though he had suffered the severe consequences of the two
    Not long war. Vietnam has been the policy reforms and mechanisms of
    The main limitation of corruption, the bad side ... I am a Vietnames and my self proud of that. I love Vietnam
    Thanks and Best Regard,
    Lê Tấn Minh Tuấn

    June 9, 2010 at 3:37 pm |
  29. Daniel Bui

    In my opinion, Vietnam is on the way to become an industrial countries. Hard to say they gonna be the new China but they are going on nearly the same way with China. Vietnam need to be more open to investors; improve the policy and infrastructures and change the view of macroeconomic so something like McDonald, Starbucks or Walkers will appear in Vietnam.

    June 9, 2010 at 5:10 pm |
  30. VAX

    Corruption is everywhere in the world, including in the United States. Anyone who thinks otherwise is ignorant. Is there anyone out there who actually think that there is no corruption in Democracies in South East Asia like Thailand, Korea and the Philippines a former US territory? What about Malaysia, Indonesia ect? The only country that is relatively free of corruption in the region is Singapore (a dictatorship) , and Japan).

    What everyone should realize is that Vietnam is one of the most stable country in South East Asia in terms of political and social stability an essential ingredient for foreign business investments.

    If the country keeps itself on this path it should do well.

    June 9, 2010 at 6:44 pm |
  31. minh.nguyen

    Hopefully if Vietnam is lucky enough its development will emulate the coastal region of China development in the 90s. But the US/EU market may not be the same as 10-15 years ago. The regional market is larger though. It's hard to archive double digit growth like China in those years. The Vietnamese aren't as frugal as the Chinese.

    June 9, 2010 at 7:04 pm |
  32. Michael

    I want to point out something about the concept that cheap labor will eventually move you up to being a scientific and global powerhouse.

    We actually don't invest that much in China; contrary to "popular belief." Furthermore, the Chinese government does not allow foreign companies to directly control their operations in China. Furthermore, if you want to actually set up a factor in China, it is very expensive.

    India, Bangladesh, Phillipines, Vietnam, and Thailand have lower standards of living than China. But, China is special.

    After living in China for 3 years, I know that China is not given the credit that it deserves. China is a scientifically strong nation. Many of its technologies are competitive with the West.

    People always think that China is factory where the West puts an order in. That is true... but in another fashion. China is the biggest producer of machinery in the world.

    Unlike most countries who make clothing, China makes the machinery that makes clothing. 90% of China's export economy does not come from consumer goods.

    China gets 90% of its revenue from machinery, power plants, diesel engines, steel plants, computer hardware, and telecommunications
    .
    I think the video fails to explain what China actually exports. Clothing and Textiles only account for 38 billion USD of China's export. China exports over 2 trillion USD.

    June 9, 2010 at 9:09 pm |
  33. Strangewalk

    Many of the articles one reads about Asia and its economic development are unbalanced or shallow, as the darker side of this development is rarely analyzed. For every positive aspect of development there is a negative, which is often of even greater weight, and it's even more true with the kind of unbridled boom growth experienced in China and Vietnam.

    June 9, 2010 at 11:27 pm |
  34. JGT

    To Dominic Thai: You are correct only if you are brining in something either illegal, or if you have to pay the duty for the goods you are brining into Viet Nam but you don't want to pay the duty, therefore, you bribe the customs. It is you who is the problem, not the custom because you do not want to pay the import tax on the items. Every country, including Australia and the USA (I am an Vietnamese American bee in the US since I was 8 years old – now working in Viet Nam) have policy about declaring goods... I never have to pay a dime, unless i am brining in like 3 or 4 Iphones or laptops for my family, then i cough out $50 bucks, so i don't have to declare my goods and customs. Vietnam is not perfect like Australia and the USA, but hey, we know Australia and the USA is not perfect either...and Vietnam still needs a lot of improvements...but I am living and working here in VN for 12 months, but have since traveled back to VN sinc end of 2002 for business...they are improving both in laws and living conditions. One last note, why is Vietnam laws constantly changing, because before they open up the country, the law was "jungle law", now since they open up...they are changing the law to "international law" but they doing it within their knowledge and capabilities to protect the local vietnamese business and also it is a trial and error for them...because most of the elite people who is running the country does not have "great education – due to the war", but they run the country to what they know best, but the younger generations, they are extremely smart... You should know these... :-)

    June 10, 2010 at 2:00 am |
  35. MDThong

    To Bill Hayton: From Vietnam, I know your book "Viet Nam: Rising Dragon"-"Viet Nam: Con rồng đang lên". I love it and hope you will have lot of books for Viet Nam.
    Wish you and your family healthy and happy.
    Best regards.

    June 10, 2010 at 3:04 am |
  36. Benzon Tan

    Vietnam 2001 and Vietnam 2009,was so different, I congratulate its government and investors, and its people.

    June 10, 2010 at 3:09 am |
  37. Sunny day

    As a european living in Vietnam I can say that this county thrilled me since I got off the plane. Five years on and counting, I am still thrilled about living here.
    It has always been about the vietnamese people, stunning how they can make your day by smiling to a stranger (you).
    For sure, many (and more) situations arise that you would never have in our more organised and regulated western societies. Still, that's what makes it so thrilling to live here.

    Regarding Vietnam's industrial output, very often I hear "low value-added goods". Today, in certain niches and specific sectors, you can find very high quality goods that you would never find in China for example (where mass production prevails).

    In the furniture sector, there are quite a few high-end furniture producers. Most of these companies are foreign invested but you also will have locally invested and managed factories. All the big names of luxury furniture are buying here and many world famous designers are producing their items here. You might not always be aware of it though.
    To have an idea of high-end and designer furniture products made in Vietnam have a look at this page:
    http://fr.imagineoutlet.com/Meubles-design.aspx

    A main challenge in doing business here will always be to find the right partners (those that can commit to and respect deadlines, quotes, qualities levels, etc.). Once you have the right partners, things can work out but this can take several years and learning vietnamese will be helpful. A good encouragement to learning vietnamese is simply the smiles and laughs you can share with people you will meet every day. More smiles here than we would ever get back home, every day, this makes living here a great experience.
    Of course, things can get very tough, very quickly and doing business here can be difficult even after having found the right partners.
    Some of the main challenges for this emerging country:
    *training and increasing the skill set of it's population (big tax cuts are in place to encourage education oriented initiatives but there is a long way to go, just ask Intel when they tried to recruit english speaking staff).
    *managing inflation
    *effectively opening it's doors to foreign retailers attracted by the huge potential of it's consumer base (youth and growing middle class).

    June 10, 2010 at 5:11 am |
  38. Bao

    I did pay money to the customs people before. Every time, it was because I wanted to bring in more than the two laptops they allow me. Why? Because I sell them there to make some extra profit for my trip. One laptop makes me 200 dollars. A couple of years back, an iPhone got me 100 bucks profit. So I would buy 5 from Apple (which used to be possible), then take them back to Vietnam to a guy who bought them off me, giving me an extra 500 bucks. This was on top of the 40 dollars I gave to the customs officers.

    Now, if I was as hateful as some of these posters on here, I'd blame the corruption on the customs officers. But the reality is that Vietnamese are always willing to help out other Vietnamese, except for the ones who live in Anglo countries. These officers were helping me out because they knew I'd be making a profit, or some of my relatives were receiving gifts that were bought cheaper elsewhere.

    I'd rather thank them for only taking 40 bucks of my profit, instead of making me fill out the forms for importing goods, which would take all of my profit.

    June 10, 2010 at 1:52 pm |
  39. pnc

    Vietnam? currently, it is a country of servants and slaves.

    June 11, 2010 at 8:08 pm |
  40. Brick

    Andrew Stevens is delusional. I thought he was a serious journalist and then he writes this. It shows he did not give any critical thought or did very much research.

    Break through low cost labor and then you will get nothing. Nothing of substance to retain knowledge and create genuine growth.

    Anyone who says happy people and smiley people has got to get real, think about what these people have been through, of course they are happy now, but does this mean Vietnam is doing awesome, no, it means in 2010, get this the Year 2010, VN is starting to catch up to where other countries were in the 1980s. Come on.

    June 12, 2010 at 3:47 am |
  41. Sceptic

    No doubt that Vietnam has tremendous potential to be the next China. However the key weakness of Vietnam is NOT about economics. It is about its people's attitude which are stubborness and know-it-all. Of course not to mention corruption. Its people seems to think that Vietnam is the greatest and nothing can go wrong with the country. They seem to subscribe to the view that the world owes them hence their mighty attitude. Foreign investors will always be screwed in Vietnam because the locals do not believe in win-win situations. Their mentality is always I win, you lose. Also their thinking is very short term and never long term. While is easy to fall prey to the lure of enormous opportunities such as 80m population, young population and low labor cost, the underlying weakness remains the ability of the country to compete globally. Vietnamese ppl are proud. They place enormous importance on "face" "pride" at the expense of logic and practicality. It probably stemmed from the fact that they whooped the U.S's ass during the War. But this victory to me is shallow as if Vietnam does not wake up from is stubborness and knw-all attittude, it will surely never be the next China. The fault lies in its people and I dare say Uncle Ho for giving them a false sense of superiority. In the 21st century, superiority does not lie in armies or weapons BUT economic might. Sadly, Vietnam has the potential BUT its ppl lack the maturity and humility.

    June 13, 2010 at 7:00 am |
  42. saint peter

    next china?
    do vietnam have enough natural resources as china?
    do vietnam have the kind of people that have as perfect business brains as some chinese?
    have vietnam solve the problem that make most of its children get college education (or same kind )?
    maybe vietnam need 100 years to catch the china of 2010

    June 13, 2010 at 10:39 am |
  43. Syed Ebad

    I visited Ho Chi Minhh City on April 2010, i spent my 6 days there, and found people are extreemly good, there are thousands of oppertunities for foreign investors, and Govt is also eagor to promote foreign investments.
    But the tax should be reduced for foreigners, or foreign companies.
    I have seen several of Europeons and Americans they were sitting there for their products.
    I have seen a person whose age was approximately 58 to 60 years, he normally spent his 6 months in vietnam he was German, i really dont remember his buisness but he was just talking with some body and telling that he spent his 6 months in vietnam and after six months he returned to his homeland just only for a month, and after that he came back to vietnam for his buisness.
    My opinion there are several oppertunities there and people especially those belong to South Asian Countries can develop their buisness there, as there is no power break down.

    June 13, 2010 at 12:50 pm |
  44. XuanThu Pham

    @Rajendra:

    Thank you for writing an insightful and beautiful comment. Of course I am biased – being Viet. When my husband and I were there recently (him being South Indian), we noticed how warm and welcoming the people were and I am reminded yet again – how proud I am to say "this is my people."

    June 15, 2010 at 2:01 am |
  45. hiepnguyen

    @ saint peter: be reponsible with the word you said.
    I do not agree when i read this line from you "maybe vietnam need 100 years to catch the china of 2010", what makes you think like that?
    Vietnam is 90 years behind China?

    June 15, 2010 at 6:29 am |
  46. WS

    What an idiot! There is too much corruption in Vietnam.

    June 15, 2010 at 9:18 am |
  47. Andrew

    Of course foreign industrial powers are attracted to Vietnam, being closer to new and existing markets, large number of peoples willing to work for cheap, and low governmental intervention. It would seem that Vietnam could be similar to China in terms of manufacturing, but there are some things which would always exist there. Being that Vietnam does not have the same amounts of inland working environment, overabundance of impoverish peoples, willing to just work, or a stable infrastructure, Vietnam, in my opinion, could grow into a powerhouse but only when compared to other parts of South East Asia, and other 3rd world countries. Yes these new manufacturing jobs are helping the Vietnamese people but its the same as investment in any country, the rich, and more dominant group will continue to prosper with slight trickling to the overall lower classed people.

    I do believe I am biased in my opinion, being that I am the product of immigrant Vietnamese refugees who came to America. I am able to visit what family I still have in Vietnam and find out just a little about their current situations. The Vietnamese people, I've met, family included are like any other people, they are hard working to better their situations, those who are able try to find managerial positions, because of the obvious financial benefits they gain, but most are working blue collar jobs making 80-200 USD a month trying to get by.

    Corruption is evident is all countries. Although Vietnam is no exception it does hurry up open the doors which can usher Vietnam into a better economical situation. Blatant corruption is bad for the country, like all others, but the belief that this new and vast source of investment into the area does leave some governmental intervention to a minimum, which does help the people overall.

    Yes foreign companies coming into Vietnam is a good thing. Yes with these investment comes better change for Vietnam. Yes the people there are benefiting from these investments, although how fast it reaches the lower population is still in question. But no in terms that Vietnam will ever become the economical powerhouse which China is.

    June 15, 2010 at 1:17 pm |
  48. kcheng

    Of course Corruption is everywhere in the world–question is to what extent and more importantly–IS THERE ACCOUNTABILITY! In some countries there is–those are the ones who are economically stable and worthy of trust! Others that are not do not breed confidence! This also affects the question of rule of law and legal system's integrity. Taiwan is the first country to invest in Vietnam. Regarding the Vietnam War, The USA went in to defend an ally in the Republic of Vietnam as it did with the Republic of Korea. This was noble–nothing to be ashamed about! How we fought the war was the problem! Remember the North Vietnamese and North Koreans were the aggressors!!!!! Now we have democratic allies in Rep of Korea, Japan, Taiwan, the Philippines, Thailand, etc.Cherish them. Vietnam is now our good friend–Vietnam wants to be close to the USA out of apprehension to the bully up north–China. Regarding Singapore–calling it corrupt free within a one party state is an oxymoron! Power is in one party's hands–who is going to expose their corruption when there is no oversight???!!!! DUH!

    June 16, 2010 at 1:10 am |
  49. Le thanh Nguyen

    I'm a Vietnamese living in Saigon. Of course, I love my Country and wish every economic development success which can help improving the living standard of everyone, esp. the poors. We all deserve it through long-lasting efforts some 80 yrs now, 45 yrs for INDEPENDENCE and just 35 yrs for ECONOMIC DEVELOPMENT from just war remnants, physically and mentally!
    I would like to thank Andew, pls allow me to call you by first name, for your encouraging and relatively objective article. We also do deserve your supports.
    What we need more is the inside analysises helping to identify the proplems to be improved, the path of the development of the Country as it still is a developing one, esp. the model it should follow, China's, India's or else's. I know, saying that is too demanding to a quick report. That's why, to me, all comments I read so far are meaningful in one sense or the other.

    Thank you again, Andrew. Best wishes to you and CNN team.

    June 16, 2010 at 3:52 am |
  50. Shanghai

    I don't think Vietnam is the same as China. Vietnam is a small country, China is huge. Vietnam imitates everything that China does, which is pretty annoying.

    June 17, 2010 at 7:26 am |
  51. vietnamrose

    To Sceptic. You are right. Most of vietnameses seem stubboness and think they know it all... Do you know why? because in our history we always have to fight against the enermy that many times stronger than us (dont need show who they are). To protect our country children were tought that they have to believe themseves and they can defeat all the enemies no matter how strong they are... Now we know we have to teach our children in other way. They have to know how to work with their friends and how to lean things that they have not known... But it take times. Hope our young generations will change their mind soon. I have been some countries and I love my people.. In my country, the soil is not rich but people never leave follow. They just work... word so hard for their life, for their children. They ready sacrificed all their life.. for what? Sometime just for next generations. Of course there are some bad people here but they dont represent all Vietnameses. Sorry my English is not good enough to express my opinions... I learn E myself just because I want to understand about other culture and countries.
    Have a good time and hope you will have good vietnamese friends

    June 17, 2010 at 4:05 pm |
  52. khongten

    I'd left VN for more than 25 years, recent years i've come back to set up an engineering business in Vietnam, but i find it really difficult to access VN market, lots of foreign engineering companies have experienced the same. Sales and manufacturing may be different but for engineering, consultancy or construction contractors it is a real challenge as most works are not tendered fairly, it is all who you know & $.
    I agree with sceptic with most of what you said as i'd personally experienced that myself, even between the North and the South vietnamese there is always some arrogance in the North Vietnamese as they beat the South during the VN war. But after i realised that, that is how most people have been taught and brought up under communism regime, so i just ignore it and carry on with what i am doing, then i feel much more relaxed and acceptive now.
    Personally I believe, if you want to build a high rise building you have to firstly build a strong foundation, VN lack of this fundamental foundation (infrastructures, proper urban planning, Bureaucratic, etc), in my view, it will be very difficult for VN to even reach Thailand level in the next 15-20 years. Not saying reaching Korea/Singapore or Japan or China as that is deifintely another level that i believe even Thailand will not be able to as their foundation is only good for where it is now.

    June 18, 2010 at 10:03 am |
  53. Minh Hue

    Viet Nam is Viet Nam and we won't never be China or any country else. i don't like comparative because it is not fair and incorrect, special for some people don't live inside the country.

    Viet Nam, we have our own Value and Culture as others in the world. We do have our strengths and weaknesses, some of us like or dislike Vietnamese's Government, it doesn't matter because as i know many people don't like their Government neither, even they live in USA , Canada or anywhere in Europe.

    From my experience, when i was live within the country (23 years) i did not have any problems with traffic's police or anything else, at all, since i have been here in Switzerland for my studying, i realized that how lucky i am, not because i live in the richest country of the world, but just simple because i am Vietnamese, i am from very special country with a lot of hurts in the past and also a lot of opportunities in present and future for a young Vietnamese people like me, i am so proud of myself when i tell all the people who i met that : i am from Viet Nam, not China or anywhere else in Asia.

    I think the past is the past, we can't change anything from what we did, we just learn from it and correct it in the present and do it better in the future. Every people make the mistake, at least once in our life, and a Vietnamese's Government also did an mistakes, but they are changing now, they are trying their best to help the country develop ( within their knowledge and capacities), and we (all Vietnamese people live in or outside Vietnam) should forgive them, give them a chance, support them by different ways, If we can forgive the foreigners who were destroy our country in the past, we can forgive our own mistakes..so why don't we do that one more time for our people?!

    Tomorrow is Tomorrow, we will see where Vietnam will be, However, we (all Vietnamese people) need a lot of Love, Support, Knowledge, Sharing, from all the people around the world for Vietnamese's future.

    As a young Vietnamese people, i would like to thank all of you who have been care and love to my country. I hope we won't let you down!

    Thank you.

    Love From Switzerland.

    June 18, 2010 at 3:50 pm |
  54. David Day

    Vietnam is and has been on the move over the last decade at a pace that is staggering. The author is correct. What is even more impressive is how strong the Vietnamese economy has been throughout this global recession.

    June 19, 2010 at 4:06 am |
  55. Michael Joachim

    As Minh-Hue rightly says, there is no point in comparing Vietnam with China. Vietnam might well compete for some foreign investments, but this will not change Chinas role in the world and this is not what will be defining Vietnam’s role in the world either. What matters is if the country will be able to develop a political and economic framework for growth and stability. And this raises the question of how Vietnam is going to integrate into the world economy. Beyond the hard economic and political facts, there are two observations about the Vietnamese people, based on my many personal dealings with them here in Switzerland, I would like to share.

    Firstly, Vietnamese have something we would probably call work ethics, which compares them much more to Japanese (or even Germans) than to the Chinese. They seem less motivated by money and status, than by the desire to do a good job in their respective areas, a little bit perfectionists even, pretty much like the Swiss. Working hard and diligently, adhering to rules and standards, putting individual benefits behind the interest of the community: Even in Europe this has become a rarity, as we all learned recently.

    The other observation relates to the fact of how well and the Vietnamese integrated into the local communities here in Switzerland. This makes me believe that the cultural barriers to integration into and communication with the world, and in particular the Western world, will be lower than for many other countries in the region.

    It is always easy to stereotype about other people and cultures. But I do believe that these traits are specific to the Vietnamese and that they could potentially give them an advantage in becoming a preferred partner of European and American enterprises, and not only for cheap mass production.

    If you add to this the enthusiasm and dynamism of Vietnam’s youth, their willingness to contribute to their country’s development – and not just to enrich themselves – then there is room for optimism. It’s a beautiful country with beautiful people.

    June 19, 2010 at 10:54 pm |
  56. Lan Pham

    From the surface, VN looks like that, but underneath, VN's regime sucks. It is heavy with bribery. No consideration for its citizens. Don't be fooled by all the brand name stores, fancy restaurants, or the government officials. They are a bunch of liars...

    June 20, 2010 at 2:56 am |
  57. Donald Fraser Miles

    I spent a brief period of time in Viet Nam as a Canadian fighting with the Americans against the Viet Kong. I don't remember much about it, as I was badly injured enroute to and in Viet Nam. I can say however it is satisfying to welcome Viet Nam into the brotherhood of capitalist nations. Viet Nam and China have mixed national identities, both capitalist and communist. It is in our interest and theirs for there to be strong capitalist momentum in their nations, as this encourages constructive trade and peace among nations.

    June 20, 2010 at 10:21 am |
  58. Anthony Quiambao (Businessman, Philippines)

    It is clear that western civilization, dominant for the past 200+ years or so, has left positive marks on the east – like capitalism, meritocracy and advancement in science and education. And Asian countries quick to grasp these principles – without necesssarily embracing so-called democracy in a blind and unprepared manner – are those that outgrow the rest of Asia, and the rest of the world. Vietnam, though somewhat 'late' in its awakening, is one of these.

    Corruption and lack of socio-political quality can never be solved or eradicated overnight, or over a quick 2-3 decades, for that matter. Just ask the western world that took centuries to escape feudalism to become the influential and dominant sector of the world for most of the 20th century. But for as long as Vietnam shall adhere to a one-goal and one-direction set of policies, plans and long-term programs, let's expect it to be a lot more than what it is today, and a whole lot more than what it was 30 year ago.

    Maybe not like China, but definitely still a country to behold in this dynamic decade-old 21st century.

    Now when can my own country the Philippines be described in similar fashion?

    June 21, 2010 at 8:03 am |
  59. Le thanh Nguyen

    Anthony,
    Very thoughtful.
    Would it be realistic to think more positively with the presence of your new President?

    June 22, 2010 at 2:20 am |
  60. tony

    my country vietnam is very beutifull country . opportunity is there unless the goverment can stop bribery and corruption. bribery can be found everywhere which is very sad. there are a badly need of new infratracture. new port and the main thing is law needs to be inplace . becourse there are no law protecting invester.

    June 22, 2010 at 4:22 am |
  61. Alex

    The Vietnamese Government is very much taken cues from the Chinese leadership, since it's a kind of pupil-master relationship. I've in Vietnam for over 3 and 1/2 years and my take on the country is:

    1. Money is the only real quest for every citizen.
    2. Power is the only real quest for every government official and leader. 3. Wealth and poverty is the only real clear difference in this society.
    4. Incompetence is a real problem from the top down (i.e. from the leadership tier down to the labor force).
    5. Trash, garbage, and littering are unsolvable problems with real negative effects on the environment.
    6. Traffic and infrastructure are major problems that will hold back the country for at least 2 – 3 decades.
    7. The education system is backward and obsolete.
    8. Low standards in citizens' mentality and community living.
    9. Blame and take no responsibility of one's action are the order of the day.
    10. No quality products and services.

    Conclusion: Vietnam will not reach the level of civilization of its neighbors such as Thailand, Singapore, Malaysia, South Korea... At least not till another century! Yes, century... not in decades.

    June 27, 2010 at 12:13 pm |
  62. fredi flores

    vietnam, since the 25 yrs. conflict with america, has gone a long way though devastated, that's for real..unlike their southeast asian neighbor, the philippines, well, sorry to say, from bad to worst, they (the philippines) needs a leader w/ the likes of vietnam's and singapore

    June 29, 2010 at 1:14 am |
  63. vnlover

    To Alex. Ok.. your judgement have good sound... but see America after its civil war.. their citizens were controled by the laws of guns.. who shoot better is alive. Imagine 90 percent of vietnamese people were illiterate in 1945 when it become independent and 2 milion people died of starvation in that year... and they continued suffering to be detroyed for 30 year of war... but now they are the third exporter rice in the world. Imagine how could you be if you were in that country?
    May be a starver because just dont want to eat something not fresh?
    May be dead because just want to fight agaist the enemies following the law?
    It's easy to judge but it's difficult to do
    Act a smallest nice thing as you can you will feel better

    June 29, 2010 at 4:24 am |
  64. Don Mallen

    It is quite true that the Vietnamese people are friendly. Their government is not – they are the same monsters that executed their own people: during the French occupation, during the "American War", and following the American government's abandonment of a country that trusted in us.
    It's a crime that the same Americans who are responsible for our betrayal of those nice Vietnamese are now making profit from an olicharchic system that is in place because they didn't have the courage to fight for freedom there themselves and prevented those of us that did from winning a perfectly winnable war. The myth that we couldn't win was as bogus as the politically correct bs that is preventing us from winning in Afghaistan. I bet the people who are losing jobs to Vietnam are not the same that supported the Communists back in the day. Do you enjoy the blood on your hands?

    June 29, 2010 at 11:05 pm |
  65. VietMan

    Next China? This should be a huge understatement since Vietnam is learning so much from China and Western countries just to avoid stupid potholes on the path to prosperity. Some guys are looking at Vietnam through their narrow lens thus producing superfacial comments on here. Be objective! Though corruption is plaguing, bureaucracy seen everywhere but reforms are more quickly to carried out. China is alot larger than VN but this giant's huge population is placing a real burden on its government. Wait and see. We welcome international friends with good-wills and ready to kick out those who intend to hurt our people and their hospitable nation.
    Cheers!

    July 1, 2010 at 5:05 am |
  66. ED

    It is meaningless to say what Vietname will likely be in the future. Many guys talking here talke wars and politics. What is the true history? I think no one knows. Every country will has a good reason to wage a war and its people always believe that they are the victims. Vietnam says the United States invaded it and the United States says it is in the interests of both US and Vietmese people. The most difficult thing in the world is to find the truth of the history. Every country teaches its people the bright side rather than the bad side of its history. Therefore, all of you here are biased in one way or another. Try to be objective. As a matter of fact, there is no true or false. It is always interests, stupid!

    July 1, 2010 at 9:02 am |
  67. VietnamBusinessWoman

    As a Vietnamese manager in Vietnam working for an American manufacturing firm with plants in Ho Chi Minh City, This report by CNN is spot on. The advantages that the country provides for our business are countless compared to manufacturing back in our home town in Texas. Of course Vietnam is not China but it is savvy enough to learn the lessons that our respected neighbour has experienced. Vietnam offers many growth opportunites to US and European firms and we certainly see work migrating from China into Vietnam and expect this to continue its upward path over the next 5years.

    July 19, 2010 at 7:56 pm |
  68. Le Hung

    I don't think Vietnam can be new China, but I'm sure that this country is developing day by day and becoming the strong economy in Asia.
    You can find the latest news about Vietnam business and economy by visit: http://vietnambusiness.asia

    September 11, 2010 at 6:47 pm |
  69. Lisa_Lena

    We do think the perspective should not be to become another China but rather to focus on doing things differently, for example, high end goods against mass production.

    Our partner, Wendelbo Mobel Design, a danish company producing high end furniture for the last fifty years has successfully opened their factory in Vietnam in 2008.
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    September 14, 2010 at 11:58 am |
  70. linh

    well, Vietnam will not certainly be China as China will never be Vietnam.
    But Vietnam could habe a steady position within the Asian community. Because all the countries from the Pacific Rim, including Indian-Union will be a center of the economic world. VIetnam as many others countries in the region has a cultural background, that due to the historical lenght, can overcome his weakness, his political system and be a strong power-house. But because nobody can foresay exactly about the future because of the modern-globalization therefore the time of fullfilment ist to be open. But one thing is certainly sure, Vietnam will come. ANd we hope that Vietnam and China can help to make a better World without any war or big conflict
    Linh

    January 3, 2011 at 10:18 pm |
  71. Hung

    In my opinion Vietnam shouldn't want strife to be the next China. They should focus on ODM. Creative product designs and in-house original designs. If you look at large manufacturers in Vietnam, you can see that the largest companies are all ready manufacturing products readily available in China: http://www.factoryvietnam.com its the lack of originality that might be a roadblock in becoming "the next china" which I think they should surpass

    January 28, 2011 at 5:35 am |
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