Business or pleasure?

As a centrally located, service-oriented hotel, a large number of the Caravelle’s clientele arrives carrying briefcases, rather than beach bags.

Watch the way they walk, and you’ll soon pick out who’s still trying to makes heads and tails of things; and who’s in step with the city’s erratic tempo.

For the benefit of both, we recently sat down with Herb Cochran, executive director of the American Chamber of Commerce in Vietnam (AmCham) to talk 2012, tips for first timers, and, well, business.
 
Here’s what he had to say:

Herb Cochran - AmCham Executive Director

Caravelle (CRV): From a business traveler's perspective, is there something that poses a particular challenge as business people take their first steps in Vietnam?

Herb Cochran (HC): Realizing that things are different here is the first challenge. The country is beginning to look so modern, with new airports, roads, tunnels, bridges, hotels, office buildings and serviced apartments. But the underlying society and regulatory environment has not changed so much.

CRV: What do first time business travelers to Vietnam want from the Chamber?

HC: Information and introductions. For a good primer, read "Who You Need to Know and How to Find them in HCMC" from Inc. Magazine. In there, John B. Owens, a longtime venture capitalist in what he calls “strange places,” shares his six fundamentals of international networking.

CRV: Is there a commonality to the pitfalls you've witnessed as you've seen entrepreneurs try to get up to speed in Vietnam?

HC: Being an entrepreneur is a challenge in any economy. It may be more challenging in a "foreign environment." But there have been a number of success stories: Walter Blocker, of Vietnam Trade Alliance, for example. In fact, most of our Board of Governors is made up of entrepreneurs. You can read their bios here.

CRV: Have you noticed any change in interest by U.S. companies seeking a foothold in HCMC and Vietnam?

HC: Things have been definitely quieter in 2011 than in 2010, when we had more than 20 top U.S. companies, from among the Fortune 200 list, visit at the CEO or "site selection" team level to explore business opportunities. In 2011, the number of such visitors was much smaller.

CRV: Is the cooling trend within Vietnam putting a damper on interest by international investors?

HC: (The cause) is more the cooling trend outside of Vietnam: the situation in Europe, low growth in the U.S., as well as slowdowns in China and Japan. Most U.S. related FDI investment in Vietnam is production for global markets, so the slowdown within Vietnam is either not relevant, or even seen as a positive factor.

CRV: What’s the FDI outlook coming out of 2011 and going into 2012?

HC: It is hard to track foreign direct investment (FDI) into Vietnam by source of the investment, because the statistics are calculated based on the immediate location from where the investment was made. For example, the Intel $1 billion investment in an Assembly and Test Facility is counted as a "Hong Kong investment," because the actual investment was made through an Intel Hong Kong subsidiary. 

In addition, often FDI has been made by "partner factories" of an American buyer/brand owner, and the export of the products are to the U.S. A classic example of this is Nike Vietnam.

For these reasons, looking at the trade results of the FDI may be a more accurate indication of the level of U.S.-related investment in Vietnam. A summary of the figures on US-Vietnam trade from the US Census Bureau can be found here: http://www.amchamvietnam.com/?id=5217

At these rates of growth, Vietnam-U.S. trade could exceed $30 billion by 2015, meaning that Vietnam could become one of the top trading partners of the U.S. This would be a remarkable achievement, in view of the very low level of trade in 2001, when the Vietnam – U.S. Bilateral Trade Agreement went into effect.

CRV: How does the volume of Vietnam’s trade with the U.S. fare in comparison to its regional neighbors?
 
HC: Vietnam has continued to improve steadily its relative position within ASEAN as a U.S. trade partner over the past ten years, so that Vietnam is now in a comparable position with Singapore and Indonesia. There is a lot of competition, but the outlook is good that this trend of increasing exports will continue.
 
CRV: Do the business travelers you interact with come here independently, or as part of trade missions? Roughly, what is the percentage breakdown?

HC: I would say 98 to 99 percent are independent. There are few "trade missions."

CRV: Do you have any idea how large the U.S. ex-pat population is in Vietnam?

HC: It's difficult to say, but I estimate it’s in the thousands.