1. In what way does the political environment in Vietnam pose both an opportunity and a threat for American MNCs seeking to do business there?

Vietnam had close relation with the U.S.S.R because of the Vietnam war. In 1993, United States permitted the U.S. companies to take part in ventures in Vietnam that were financed by international aid agencies. Then a growing number of American firms began doing business in Vietnam. Vietnam is also the 150th member of the World Trade Organization. However, the economy of Vietnam has been up and down, and it lagged behind its neighbors. It might be the reason why Vietnam government started to warm up its relationship with the United States and enter the WTO. As the country has the willingness to build trade relationships with other countries, the United States MNCs will have opportunity to do business in Vietnam.
However, before Vietnam had entered the WTO, the trading market in Vietnam was not that easy for the U.S. MNCs. There are numerous and ever-changing bureaucratic rules enacted by the communist government officials. Things went better after Vietnam joined the WTO, but these concerns can never be solved because of the differentiation of the social formation. As a communist country, Vietnam government still closely controls the economy and can affect free trading market. The opportunity of the U.S. companies will be limited due to the interference of the Vietnam government.

2. Why are U.S. multinationals so interested in going into Vietnam? How much potential does the country offer? How might Vietnam compare to China as a place to do business?

In recent years, the economy growth rate of Vietnam has been among the highest in the world. The trading market of Vietnam has great potential for both exporters and investors. Vietnam is a true emerging marketing which can offer ground floor and growing opportunities for the U.S. MNCs.
Vietnam received more than US$85.5 billion in foreign direct investment in 2008 and 2009, exceeding the total of US$83.1 billion in the previous 20 years. Even among the global recession in 2010, U.S. exports to Vietnam grew by an impressive 19.8 percent to US$3.7 billion. This country offers a lot of potentials to the U.S. investors and exporters by opening its free trade market. Vietnam is regarded as the new China in future’s world market. Compared