Vietnam comes courting U.S. business
Vietnam President Nguyen Minh Triet during a recent visit to Cambodia.
TEXT OF INTERVIEW
Kai Ryssdal: Two American presidents have gone there since the war ended — Clinton and the incumbent Bush. Now, the president of Vietnam's on his way here.
Nguyen Minh Triet left Hanoi this morning for a six-day visit. One that will focus largely on trade, and how Vietnam can get more American companies doing business there.
Chris Runckel's the chairman of the U.S.-Vietnam Chamber of Commerce. Mr. Runckel, welcome to the program.
Chris Runckel: Thank you, very much.
Ryssdal: The president's going to Los Angeles and then New York before he finally ends up in Washington next Friday. Who's his audience on this trip?
Runckel: Well, I think his audience is U.S. business. Vietnam is trying to move up the food change. They've already had a lot of investment in textiles and shoes — all those sort of businesses that really are seeking out the lower-labor-cost environments. And now, just last year, they got a big investment from Intel, which is investing $1 billion just outside of Ho Chi Minh City. And what they're trying to do is to get more investments like that.
Ryssdal: What's your experience doing business over there? As you take companies over there and try to introduce them around and get them to meet the right people, is the environment receptive or is it still a little bit guarded?
Runckel: No, it's very, very receptive. And very, very competitive. Vietnam offers better incentives than China in terms of taxes. They're offering tax rates that can go to as low as 10 percent, a waiver of import duties for bringing in equipment. All of these are very competitive, if you compare them to other countries in the region.
Ryssdal: What about the downside risk? It can't be all great news going on in there. I mean, there must be some risk of corruption and the government perhaps frowning on certain operations.
Runckel: No location is perfect, and Vietnam still has its problems. One issue that's immediately comes to attention is the weakness of infrastructure — ports, road systems, even the electric grid in certain areas is not what it should be. Also, corruption still is a major problem in Vietnam. It's a big concern for investors and it's a big concern for the government.
Ryssdal: So, if you had a client who wanted to make molded plastic something or a pair of tennis shoes or whatever it is, and they were considering China and Vietnam, how would you balance out that equation for them?
Runckel: I think it gets down to whether they see the China market as a big portion of their target. If their focus is really only on export back to the U.S. market or into the E.U., Vietnam can be very, very attractive. If their focus is more on the regional market, and includes China, then China can oftentimes be a much better location.
Ryssdal: The government in Beijing has made an implicit agreement with its people, that economic reforms will be allowed to flourish at the cost of political freedoms. Is that happening with Hanoi and the people of Vietnam?
Runckel: I think so. Most Vietnamese have made an implicit bargain with the government and they are willing to stay out of politics, as long as the Vietnamese government continues to spread prosperity and to increase the opportunities for them to have a better life.
Ryssdal: Chris Runckel is a business consultant in Asia and Vietnam. He's also the chair of the U.S.-Vietnam Chamber of Commerce. Mr. Runckel, thanks for your time.
Runckel: Thank you.