One Week Working in Vietnam

The one thing that was not expecting when I to Hochiminh City to work with factories this last week was the size of the Chinese population.  I was told that Vietnam has a population of over 1 million overseas Chinese and millions more that are half or less Chinese but whose families have been there for two or more generations and who still speak some Chinese as a first or second language.The Chinese here are either from Guangdong, Hong Kong or Taiwan.  Like in the other SEA countries, the Chinese dominate the business landscape.  They seem to own most of the major factories and talking with management in 4 factories I was working with was all done in Mandarin and Cantonese.One night my wife arranged for me to go to dinner with 6 factory owners, all Chinese.  All of them had been in Vietnam for at least 8 years.  All of them were making product exclusively for export.  All of them had moved factories from Guangdong province within the last 20 years.  Two of them spoke Vietnamese.  Only one of them had (their primary) family in Vietnam with them.  They complained about the same things in Vietnam that I hear most foreigners complain about in China.Highlights, lowlights and surprises from a week in HoChiMinh City.Horrible infrastructure. HCM City has no freeways a couple of bridges and no flyovers.  All transportation was limited to surface streets.  No subways or city trains either.Millions of Motor scooters. The fact that there was a city of 10 million people without anything but surface streets was bad enough, but then throw in 4 million-plus scooters and you have a traffic nightmare.  As bad as it was, it was nothing like Bangkok in the 80’s and 90’s when you could literally sit, unmoving in a car for hours in rush hour.  But still, 50 to 70 kilometers can (and regularly did) take hours to cover.  One factory trip, a distance of 54km took almost 3 hours out and more than 3 and a half back.Quality factories are hit and miss. There are some great faculties here, but there isn’t anything that’s more than 15 years old.  That’s good and bad.  New equipment is good, but very little experience is bad.  Many new factories are small and many of the best large factories are producing for a limited number of large clients.QC vs Cost. Of course the prices of raw materials and even finished goods are great, much better than China for the exact same items, but there are QC expenses that MUST be factored in.  Sure you have to do CQ everywhere, China, Thailand, Taiwan.  But I was amazed at what was passing for “acceptable” while watching (other people’s) stuff come off the lines.Flights are not cheap, hotels are overbooked and so are very pricey too.  Food is more expensive than China as well.  Another cost you have to figure in is the lack of options for complementary components.  A lot of bits and pieces are moving in from Thailand, Malaysia (lower duties in ASEAN) and China.  The fact that materials are cheap should not translate into “doing business is cheap.”Great wireless access but an information black hole! I was amazed that my 3G phone with a China SIM card worked better in Vietnam than in China.  And unlike Hong Kong I had free wireless almost everywhere I went.  Hole-in-the-wall coffee shops and bakeries had wifi.  Almost every place we went in HCM City had the “Wifi Free Zone” stickers on the door/window.  But even the HCM City Investment and Trade Promotion Center told me that good information is VERY hard to find (even for them).Thailand, 20 years ago. HCM City really reminded me of when I was living in Bangkok in the 80’s.  There were only 3-4 buildings over 15 stories high, tons of construction, no zoning laws, bad traffic, high growth rates (meaning lots of visible gap in local incomes), lots of expats and everyone has a shop of some sort in the street level of their home.Noodles, bread, coffee, and bad Muzak. It’s like the entire city got together and said, “We’re all going to offer the same food and play the same bad music.  Everywhere!”  How does this happen?  Hotels, restaurants, department stores, banks, factory waiting rooms.  It was an a amazing feat of coordination.Traffic comparison Saigon 7AM Sunday vs. Shenzhen 7AM Wednesday, same week.