Total GDP: $26 billion (1998)
Real GDP Growth: 4.0% (1998)
Per Capita GDP: $332 (1998)
Inflation: 10% (1998)
Unemployment Rate: Urban: 6.8%, Rural: 3.9% (1998)
Trade Balance (Deficit) as % GDP: -7.7% in 1998, -17.7% in 1996.
Merchandise Exports: $9.4 billion (1998): crude oil, garments and textiles, footwear, seafood, rice, coffee, computers and components, pepper, and electronic goods (as of May 1999).
Merchandise Imports (Leading Sectors for U.S. Exports and Investments): $11.4 billion (1998): machinery/equipment/instrument and other spare parts, textile/garment/leather materials, petroleum, cloth, iron/steel, fertilizers, material plastics, electronic components, motorbikes, and pharmaceutical materials (as of May 1999).
Key Trading Partners: Japan, Singapore, South Korea, Germany, France, Hong Kong/China, Taiwan, Thailand and United States.
You might say that the efforts of American Equipment and Fabricating Corp. of East Providence to export its product to Vietnam never saw the light of day.
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But that’s because the product, an Ostberg Load Cell, manufactured exclusively by American Equipment, is buried beneath pilings and used to check the stability of the foundation’s pile in the process of constructing such items as bridges.
Daniel Shea, operations controller for the 42-year-old company, said exporting and importing account for about 40 percent of the company’s business, and that its international operations generally go through a third-party distributor, Load Test in Gainsville, Fla. It was Load Test, he said, that contracted with Bullfinch & Berger, a German company that had the contract to build a couple of bridges in Vietnam.
The contract seems to have traveled more than the product, which Shea said was shipped in containers directly from the East Providence facility to Vietnam.
”Our involvement with import-export regulations is minimal,” Shea said. “They gave us directions on how to prepare commercial invoices, how to present the product to Vietnam and shipping instructions.”
Once in Vietnam, Shea said, “Load Cell is buried in the ground, never to see sunshine again. Piles are put on top of it and hydraulic fluid is pumped down to the load cell and they measure the stability of the pile.”
The technical engineers who install and check on the product, Shea said, came from either the German or Florida company.
American Equipment is used to international trade, importing erecting drill rigs from Italy and distributing them nationwide, and exporting to Malasia, Singapore and South America.
Shea described American Equipment and Fabricating Corp. as renting and selling equipment to the heavy construction industry for the “putting of piles, sheeting and other pieces of equipment down in the ground. We fabricate specialized pieces of equipment to customers’ specifications,” repairing equipment and providing engineering services.
While the company does not send any engineers to sites internationally, it does with local projects, such as the Providence Place, Big Dig and Bath, Maine projects.
What made the Vietnam contract unusual, Shea said, was that some of the company’s 27 employees “were in the conflict,”(the lengthy war in Vietnam) but none was hostile to the project.
They accepted, Shea said, that “the world is changing. It’s similar to the war with Japan. We have to let bygones be bygones. No longer are we a cloistered business community. We have to be involved in the international arena.”
Socialist Republic of Vietnam
Geographic Description: Located in Southeast Asia, bordering the South China Sea. Vietnam is a long, narrow S-shaped country, completely in the tropical zone. It is 329,560 square kilometers (127,243 square miles); slightly larger than New Mexico. Climate: The mountainous north has four distinct seasons and high humidity. The south has a rainy and dry season, with an average temperature of 27 degrees Celsius (81 degrees Fahrenheit) throughout the year.
Main Cities: Hanoi (capital), Ho Chi Minh City (formerly Saigon), Haiphong, Nam Dinh, Da Nang, Can Tho and Nha Trang. Only 20% of the population lives in urban areas.
Population: 78 million (May 1999)
Languages: Vietnamese (official), Chinese, English, French, ethnic minority languages. English is the favored language among younger Vietnamese.
Workweek: Monday-Saturday. Most offices are open from 7:30 to 4:30, with an hour between 12-1 for lunch.
Labor Market: Well-educated, low wage workforce, with traditions that emphasize learning and respect for authority, according to a Vietnamese Embassy description.
Type of Government: Market-oriented Socialist Republic.
Head of State: Prime Minister Pham Van Khai.
National Governing Body: Politburo
Currency: Dong
Exchange Rate: 13,900 Dong to $1 (U.S.)
Tariff, trade regulations, and free trade zones
Tariff and Trade Regulations: Import duties are levied on most items. Rates are specified in “Export and Import Tariff for Commercial Goods,” which is subject to frequent revisions. The highest rates are levied on consumer goods, especially luxury items such as liquor, cigarettes, and cars. When Vietnam joined ASEAN, import tariffs with member countries were reduced five percent or more. Average tariffs are between 15%-20%, while two-fifths of imports pay tariffs that are 40% or higher.
Free Trade Zones: Export Processing Zones provide foreign companies a duty-free manufacturing location and access to low cost labor. The State Committee for Cooperation and Investment is adding export-processing zones in Da Nang, Haiphong and Hanoi to the already-existing Saigon Export Processing Zone.
Taxation: Tax rates imposed on foreign investment companies depend on how the investment is structured, whether a contractual business arrangement, joint venture, or wholly foreign-owned investment.
Foreign Ownership and Licensing: The best way to market and distribute products is to establish an enterprise under the Foreign Investment Law. Under this licensed foreign investment project, foreign firms may conduct their own marketing and distribution of the products produced in Vietnam. Foreign companies are not allowed to distribute or market a finished product that is manufactured outside of Vietnam. Joint ventures have been allowed to import the product during pre-construction and construction of the factory.
Import and Export Control and Documentation: Companies engaged in direct export or import must obtain a license from the Ministry of Trade. Foreign-invested firms may be given a license to export/import specific products if mentioned in their investment license and approved by the Ministry of Trade in their annual business plan. Companies without an import/export license must conduct trade activities through licensed companies, which may charge an average commission of 2-3% of the value of the shipment.
Trade Financing: Foreign banks operating in Vietnam provide trade-financing facilities for U.S. exporters, preferring to deal in irrevocable, confirmed letters of credit. American Express Bank, Bank of America, Chase Manhattan Bank and Citibank have offices in Vietnam. Other U.S. banks operate from operations centers in neighboring countries. All American banks offer trade-financing services to U.S. companies.
Marketing and Selling Factors/Techniques: Vietnamese consumers are willing to try foreign products with perceived higher quality. They prefer brands imported from the United States, Japan and Europe over Chinese and locally produced brands. Brand loyalty is built on price, quality and availability. However, brand switching is frequent.
Product Pricing: Product price is an important factor in the purchase decision. Only a limited number of consumers are willing to pay higher prices
Patents: Invention and innovation patents are both available for 15-year terms. Vietnam is party to the Paris and Stockholm Conventions, and has accepted the Patent Cooperation Treaty in March 1993.
Trademarks: Trademarks in Vietnam can take the form of a letter, word, number, image, picture, design or combinations of these. The trademark registration process is lengthy but inexpensive. Trademark protection is valid for ten years, and can be renewed for additional ten-year periods. Vietnam has signed the Madrid Agreement on International Registration of Marks.
Copyrights: Copyright protection is extended to computer software, architecture, choreography, dictionaries and folklore. The Ministry of Culture and Information handles copyright registration. Foreign works qualify for copyright protection if 1) Vietnam is the first place of publication, or 2) Vietnam follows within 30 days after first publication elsewhere.
Key Contacts
RI Export Assistance Center (RIEAC) and World Trade Center, which operates under the auspices of the Center for International Business at Bryant College, in partnership with the State Economic Development Corporation. * Raymond W. Fogarty, Director * Robert Hamlin, Country & Industry Program Manager * Edward Barr, World Trade Center Manager
Telephone: (401) 232-6407 or (401) 232-6408
Fax: (401) 232-6416 * E-Mail: postoffice@itdn.net
Website: http://www.rieac.org
Embassy of the Socialist Republic of Vietnam in the U.S.
1233 20th Street NW, Suite 400, Washington, DC 20036
Telephone: (202) 861-2291 Fax: (202) 861-0917
Website: vietembassy-usa.org
Ministry of Foreign Affairs
Website: http://www.mofa.gov.vn”
Trade Office
1730 M Street NW, Suite 501, Washington, DC 20036
Telephone: (202) 463-9425, 463-9426, 463-9428
Fax: (202) 463-9439
E-Mail: mailto:vinatrade@aol.com or vinatrade@msn.com
English Language Publications
Viet Nam News: http://vietnamnews.vnagency.com.vn
Vietnam Economic Times: http://www.vneconomy.com.vn
(E-Mail: mailto:vet@hn.vnn.vn
Vietnam News Network (VNN): http://home.vnd.net/english/laws/foreign_inves/”
Vietnam News Agency: http://www.vnagency.com.vn/vnaE.htm
Que Huong Magazine: http://home.vnn.vn/quehuong/so16-4-99/english.htm
The Voice of Vietnam (VOV): www.vov.org.vn/1999_07_19/defaultv.htm
Vietnam Posts and Telecommunications Corporation: http://www.vnpt.com.vn/Eindex.html
Nhan Dan (English and Vietnamese): http://www.nhandan.org.vn/
Country Profile
Compiled by Providence Business News,
in collaboration with Bryant College Export Assistance Center.
