Week 4 Homework Assignment
June 24, 2012
1. Update the political, legal, and economic situation in Vietnam; then select a product of your choosing and evaluate Vietnam’s potential both as a market and as a manufacturing site.
a. Vietnam’s economy has grown significantly, expanding at an average rate of 7.5% per annum over the past decade. In 2010, foreign investors registered capital of nearly $18.6 billion (US), in which the actual disbursed capital came to $11 billion. Vietnam offers a welcoming investment climate, including solid economic grown, political stability, a competitive workforce, a gradually more open and transparent market, abundant natural resources and good geographic positioning in the region.
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Foreign policy around 1988 Vietnam was forced to reach out to non communist states as the eastern block was dismantled. Instead of focusing on socialist ideologies, Vietnam was now desperate for foreign investors. As a result relations between China and Vietnam became stronger, as well as relationships with Germany, Japan, US and the Southeast Asian countries. Since 1994 firms from these countries have invested big In Vietnam. However under the economic crisis in Asia in the late 1990’s there was reluctance from the government to cooperate with foreign investors and their governments. The Vietnamese government was in denial on the economical crisis, and didn’t realize they relied on the foreign investors. Help from other countries weren’t accepted unless it fit the socialist vision. This led to conflicts between investors and government, and also heavy corruption. Today Vietnam is a member of ASEAN (Association of Southeast Asian Nations) that has a goal to accelerate economic growth and development, and to obtain peace between the member states and strengthen their relationships. The ASEAN area is a free trade area, and forces Vietnam to constantly lower tariffs. Vietnam has also recently opened doors to the US by signing the United States-Vietnam Bilateral Trade Agreement in 2002. By continuing to allow and open it’s door to trade and exporting from other countries, Vietnam can continue to grow with the help from these other