U.S. competes with China for Vietnam's allegiance
HANOI - With the fastest growth in East Asia after China and a capitalist game plan that is attracting global investment, Communist Vietnam is emerging as a regional economic power as it moves steadily from rice fields to factories.
And with the wounds of war all but healed, Washington is paying attention.
Trade talks between House Speaker J. Dennis Hastert, Republican of Illinois, and his Vietnamese counterpart turned into a lovefest here recently, choreographed by the hosts to show their affection for America.
"At last we're having dinner together," said Nguyen Van An, the leader of the Vietnamese National Assembly, as he hugged the speaker and presented a copy of a letter from Ho Chi Minh to President Harry S. Truman appealing for American help against the French. "We should have met 60 years ago."
Mr. Hastert's presence in April was part of a larger dance that has since starred Bill Gates, the founder of Microsoft, and Defense Secretary Donald H. Rumsfeld as visitors, and will feature President Bush when he attends the Asia Pacific Economic Cooperation summit meeting here this fall. Vietnam's leaders have made plain they want the United States on their side for equilibrium against China, a longtime occupier. Vietnam, though an ideological ally of Beijing, fears an expanding Chinese sphere of influence and being reduced to an economic appendage by China, its northern neighbor.
It has fought wars against China, most recently in 1979. But now, relations have "never been so good," said Ton Nu Thi Ninh, the vice chairwoman of the Foreign Affairs Committee in the National Assembly.
"But that doesn't mean they're perfect," she added.
The Bush administration, also concerned about Beijing's designs in Asia, is happy to provide a counterweight.
"Everyone knows we have to keep a fine balance," Ms. Ninh said. Vietnam will take overtures from each side in stride, she said, declining to "lean over" toward Washington or "bow" to Beijing.
The competition between Beijing and Washington for Vietnam's allegiance sometimes seems toe-to-toe.
This month, Mr. Rumsfeld announced small but significant steps to deepen military cooperation between the United States and Vietnam, including the possibility that Vietnam would buy American military spare parts. Two Vietnamese military officers were to enroll at a military language school in San Antonio this month for English classes financed by the Pentagon's International Military Education and Training program that is open to friendly countries.
China's minister of defense, Cao Gangchuan, visited Hanoi in April on the eve of a National Party Congress that chose Nguyen Tan Dung as prime minister and Nguyen Minh Triet as president.
Mr. Dung and Mr. Triet support economic change but are political diehards who favor the Chinese model: economic transition to open markets with firm Communist Party political control, analysts say.
China and the United States are rapidly increasing their economic presence here. Chinese and American investments in Vietnam last year were about equal — a little more than $2 billion each, according to government figures.
Two-way trade between the United States and Vietnam rose to nearly $8 billion last year — from less than $1 billion in 2001 — most of it shrimp, clothes and shoes exports for American shoppers.
Not to be outdone, the Chinese commerce minister, Bo Xilai, said in a visit here this month that trade between Vietnam and China could reach $10 billion in 2006, an increase of almost 40 percent from 2005.
In one of the most significant new American investments, Intel chose Ho Chi Minh City as the site of a $600 million microchip plant that will begin production in 2008. With Vietnam's membership in the World Trade Organization expected in the fall, scouts for American banks, and insurance and telecommunications companies are knocking on doors here, poised to invest.
And in motorbike-crazy Vietnam, where city streets are clogged with cheap Chinese models, Harley-Davidson, the all-American company, has sensed an opportunity. It won concessions in recent trade talks to have tariffs on heavy cycles lifted, and plans to open a showroom soon.
China's investments have been mostly in raw materials like coal and bauxite, and in building roads and rails that will connect the long coast of Vietnam to southern China.
Signs of Vietnam's economic exuberance abound.
One of the nation's best known new entrepreneurs, Ly Qui Trung, 40, opened a noodle soup store three years ago and now has 33 outlets with distinctive décor and polite service, all modeled on McDonald's.
Called Pho 24, after the national dish of noodles, beef, spices and greens served in an aromatic broth, the stores earn their franchisees up to $40,000 a year, Mr. Trung says, a handsome income in Vietnam.
"I use the method of McDonald's: everything is standardized, everything is uniform," he said. "It's nine steps from taking the order to serving the food to saying goodbye." .
He expects to open 100 stores in the next two years, including a restaurant in southern China next month.
In Vinh Yen district on the outskirts of Hanoi, Chen Guo Hui, a textile engineer from Southern China, runs a yarn manufacturing factory with 600 employees, many of whom left the surrounding farms to work as machine operators.
"Chinese factories are coming here more and more — labor costs are 25 to 30 percent lower than in China," he said. At his plant, workers were paid an average of $60 a month.
Vietnam has arrived as an economic player in Asia after years of slow and fitful decision making by the governing Politburo.
The government finally passed an enterprise act in 2000 that permitted the formation of small- and medium-size businesses. Major industries like power and telephones remain dominated by state enterprises.
The gradual approach has won praise from the World Bank, which says growth has come fairly equitably, creating fewer divisions between rich and poor than in some developing countries.
"It is rare for a country to graduate from being poor to middle income in 15 years," said Klaus Rohland, the World Bank's country director in Vietnam.
In 1993, Vietnam's per capita income was $180. It climbed to $640 for 2005 and is expected to reach $1,000 by 2010, when Vietnam will no longer qualify for concessionary loans from the World Bank, he said. In a clear difference with many developing countries, especially in Africa, Vietnam has eschewed heavy reliance on foreign aid; less than 15 percent of public spending for the last number of years came from aid, the bank said.
Relations between Vietnam and the United States have improved in the last several years but remain troubled by uneasiness in Washington over human rights, and by the opposition of many Vietnamese-Americans to the Hanoi government.
The Vietnamese government remains irritated by Washington's refusal to consider compensation for victims of Agent Orange, the toxic herbicide the United States used in the Vietnam War. Still, the anti-Americanism that can be found elsewhere, especially over the Iraq war, is less evident here.
Ms. Ninh singled out the welcome for Mr. Gates, who was mobbed here in April, as an example of friendlier attitudes. "Vietnamese like Bill Gates because he earned his money with his brain, and got it with his determination," she said. "He is a role model young people can emulate."
His last message, she noted, was to say, "I'm coming back."
By Jane Perlez - The New York Times - June 19, 2006
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