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A worker walks past a poster promoting a shopping mall in Hanoi.

As a Vietnamese proverb goes, it takes two hands to grab a fish. Vacillating between the left or the right only allows the fish to wriggle away – one has to commit to a course of action.

It's a good analogy for the Vietnamese business environment faced by Canadians and other foreigners.

The country is caught between two courses. One is the communist government's continuous move toward privatization and transparency, with the goal of attracting foreign money, more foreign technologies and more international joint ventures. The other course is its often-inefficient state-owned enterprises, which are slowly being unravelled.

Hanoi regularly declares the restructuring as being on pace. Yet economic watchers note a kind of push-pull dynamic, one that requires a particular savvy by foreigners doing business.

It's widely recognized that state-owned enterprises are a drag on the economy, said Antony Nezic, president of the Canadian Chamber of Commerce in Vietnam. Among the big ones are Vietnam Mobile Telecom Services (MobiFone), Vietnam Airlines, Vietnam National Shipping Lines (Vinalines) and Vietnam National Textile and Garment Group (Vinatex).

"How do you unwind that without damaging social systems?" Mr. Nezic said. "An equitable privatization is very much the key challenge."

Yet it's a mistake to view Vietnam's business climate strictly as being dictated by the communist government. "It's a bit anachronistic [to talk of] capitalism or communism or socialism. In many ways, it is the most capitalistic economy that I've ever worked in," Mr. Nezic said.

The central government is capable of acting quickly and concertedly when it wants to. "What I've learned here is to never, never underestimate the government and their abilities. There will be a complaint about infrastructure not being built quickly enough, and all of a sudden, you'll see a highway built six months ahead of schedule," he said.

For Canadian Adam Roop, Vietnam has been surprisingly adept at taking a long-term outlook with foreign companies.

Mr. Roop recently relocated from Sarnia, Ont., where he was president and general manager of the industrial materials producer H.C. Starck Canada. In Vietnam, he is chief operating officer of the joint venture Nui Phao H.C. Starck Tungsten Chemicals Manufacturing.

"From a regulation perspective, what [the government] really looks for are companies that come in and add value. Obviously, Vietnam has a lot to offer. And as people come in, they want to ensure there's a long-term strategy," he said.

Among the big multinationals doing business here are Intel Corp., Samsung Electronics Co., Nokia Corp. and LG Group.

"We're not just coming in to be quick, but to help develop the industry here in Vietnam to make it grow to become something bigger," Mr. Roop said. "On the one hand, it's quite open if you're adding a lot of value. On the other hand, I don't think you can come in here with anything and just set up shop."

The country has a very multicultural business environment, Mr. Roop said. "There are lots of people who are trying to integrate from all around the world. We have, obviously, Vietnamese, we have Indians, Australians, Germans, Canadians, all coming together and working in the same business space."

The government's goal is maintaining social stability, to prevent development from hurting traditional industries, Mr. Roop noted. For instance, wastewater regulation is "far more stringent than what I've seen in both Canada and Europe. Where we're operating is also one of the prime rice-producing areas, and they want to ensure that they don't damage their agricultural sector."

Business reform can produce friction. In 2013, more than 400 state-owned enterprises were reportedly closed or declared bankrupt, according to Vietnam's Ministry of Finance. And in announcing a five-year plan for 2016 to 2020, Prime Minister Nguyen Tan Dung said privatization will continue, along with moves to improve corporate governance.

"We just had a meeting of all the chambers of commerce and a group called the Vietnam Business Forum," the Canadian Chamber's Mr. Nezic said. "We meet biannually with the prime minister and various ministers." He added that high-level working groups have been focusing on improving investment law, privatization and the country's banking system.

Still, "it's slow going," he added. "There are very few high, value-added processing industries in Vietnam. It is very much being encouraged," Mr. Nezic said.

"You have Samsung – one of their largest operations in the world is in Vietnam. All the leading apparel manufacturers are here, etc. And the government is very much encouraging that high-added-value processing as they move up the supply chain."

Yet "there are clearly vested interests in maintaining the status quo," he said. Vietnam is doing what took years to happen in Korea and Taiwan, as the country very slowly unwinds its state-owned interests.

"That's the friction," Mr. Nezic said.

It's all relative

Vietnam's economy recently suffered a slowdown, though by world standards it still looks like an express train. The government is predicting improvement.

2015 GDP: It's expected to rise to 6.2 per cent, up from a projected 5.8 per cent for 2014, said Prime Minister Nguyen Tan Dung at the recent opening ceremony of Vietnam's National Assembly. This was better than the IMF projections of 5.6 per cent for 2015 and 5.5 per cent for 2014.

Hot third quarter: Government data showed an acceleration of GDP in the third quarter at a rate of 6.19 per cent, compared with 5.42 and 5.09 for the second and first quarters, respectively.

Reaccelerating growth: Growth above 6 per cent is still below the rampant 7-per-cent average of the past decade. Yet it's better than the average 5.5 per cent from 2011 to 2013, when the country is said to have been mired in bad bank loans and low domestic demand.

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