Case on Vietnam

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The case focuses on Vietnam; after the sour test of war with US in the mid-1970s, the US revoked all restrictions on
business in 1994 and Vietnam responded quite positively as a result they received more than US$85.5 billion in
foreign direct investment in 2008 and 2009. The opportunity for Vietnam is intense as the Chinese government is
implying more restriction day by day on the other hand Vietnam continue to strengthen the allegiance with the
West, enlisted as a member of WTO. My observation is: Vietnam have put aside their outlooks of a bloodstained war
and moved on from the past political views in order to develop the business relation posing an example for the rest
of the world who keep close tabs on both the superpowers USA and China.
1. The Vietnamese Government has opened up their market for FDI. MNCs like Caterpillar, Mobil, General
Electric, AT&T and Intel Corp invested huge chunk of money in Vietnam indicating the opportunities are for
real and it is growing. However historically the Vietnamese are believer of communism, had a close relation
with the U.S.S.R. Even after the fall of communism Vietnamese government have worked out solutions with
China and endure to have a friendly relationship with them. So there will always be a stone in the shoe for
American MNCs seeking business there.
2. With ever-growing political implications between the US and China, the American MNCs are looking for an
alternative, ally in the East who can support. Vietnam could be the next best thing after China. In July 2000
the United States and Vietnam signed a bilateral trade agreement that opens up trade and foreign
investment in Vietnam and gives Vietnamese exporters access to the vast U.S. market. After long
negotiations Vietnam has stepped into WTO. It reflects the willingness of the Vietnamese Government for
the business.
3. Intel Corp, the worlds largest chipmaker, began operation of its $1 billion assembly and testing plant in
2010. That indicates the wide range of prospects of IT sector in Vietnam. They might not have exceled as
India already have but they been working on it. Also the Vietnamese Government has opened up some
windows of mutual understandings, signed up treaties and taken the membership on WTO. But their stillcommunist attitude and liaison with the former USSR and China is not unknown. My option is Vietnam can
be great places for high-tech American firms but the MNCs ought to proceed with caution!