Vietnam is shifting its economic emphasis from state-owned enterprises to privatization, and its evolving private firms are seeking capital and partnerships from Arizona companies.
The desire for trade between Arizona and Vietnam resulted in nearly $43 million in exports last year, compared to $7 million in 2005.
“Vietnam is getting more aggressive in its search for capital,” said Jenny Q. Ta, a private equity specialist of Vietnamese descent based in Southern California. “The Chinese economy is dependent on the U.S. for its wealth, and Vietnamese companies see similar opportunities.”
Ta said the change started about 20 years ago when President Bill Clinton visited the country and opened diplomatic and trade associations. The opportunity comes as the socialist nation changes its company ownership from government to private, or “equitizing,” as the Socialist Republic’s U.S. Chief Economic Counselor Dzung Leexplained.
“We have reduced the number of SOEs from 12,000 in 25 years ago to around 1,000,” he said. “We want to cut this number to 500 in four years.”
Le said that Vietnam has exceeded its World Trade Organization goals for building a sustainable economy, since joining WTO in 2007.
Kristian Richardson, director of the U.S. Commercial Service for Arizona, said in a report prepared exclusively for the Phoenix Business Journal that overall U.S. exports to the country grew 7 percent in 2012 over 2011. The $5.7 billion in exports to Vietnam last year were up 14 percent from 2013. The leading U.S. and Arizona exports are beverages and agriculture products. The two categories account for 52.8 percent of the state’s shipment to the country.
“Vietnam wants to develop jobs for its growing youthful population,” Le said. “Vietnam is now focusing on restructruring the economy and our growth model, with emphasis given a reform of the investment model.”
Technology is one area where the country wants to establish a firm footing. “We don’t want to be known for low-cost labor that is getting textile (manufacturing) that’s now too expensive in China,” said Le. “We want better jobs for our workers.”Richardson said that exporting to Vietnam is an important opportunity, because the U.S. is on the wrong side of a 2:1 trade surplus. While U.S. exports have increased, Richardson’s report says that in 2012, the U.S. had a nearly $16 billion trade deficit. The U.S. Commercial Service Arizona Director said, “There is good opportunity with energy, aerospace, telecommunications and computer hardware.”
Intel Corp. (NYSE: INTC) had enough confidence to open its world-largest manufacturing plant near Ho Chi Minh City. To engage its workforce, Intel andArizona State University created an effort to train engineers and a qualified workforce in the country.
“Global engagement is an ASU imperative and we are involved in Asia,” said Jeffrey Goss, associate vice provost and assistant dean in the School of Engineering. “Intel invited ASU to collaborate on an effort to bring (science, technology, engineering and mathematics) training to Vietnam.”
ASU started the program with a U.S. Agency for International Development $5 million grant in 2010.
Arizona computer and microchip exports to Vietnam barely topped $1 million in 2005. Last year, the $14 million in exports amounted to 20.6 percent of the state's output to the Southeast Asian country.