The Motorbike Economy

The Vietnamese are riding into the economic big league, atop millions of motorbikes.

One way to get to the global economy.

Ho Chi Minh City, Vietnam - The TV screen in a hotel room in Singapore a fortnight ago poured out awful images from New Zealand's Christchurch earthquake. A week later, in Saigon, the earthquake had given way in the news to images of fighting in the streets of Libya. So this, too, is the global village, the whole world watching the same disasters and dramas over dinner.

But a "Libya" isn't quite the same story in Vietnam as in the U.S. America's great-power status obliges that the center of concern is "the U.S. response." In emergent Vietnam, whose 89 million people make it the world's 13th largest nation, the bigger concern is whether its rapidly inflating currency, the dong, at about 20,000 dong to the dollar, will slow this nation's march to economic power.

Don't count on it. No one in Vietnam is "marching" to the future. "There's nowhere to walk here," explained a waitress in a Saigon restaurant. "The sidewalks are covered with motorbikes." Saigon has been described as a city of nine million people and 30 million motorbikes. That's an understatement. It is an infinity of motorbikes. Imagine an entire city population riding atop a 100cc Honda or Yamaha. It's impossible to imagine unless you see it.

One is engulfed by motorbikes seconds away from Ho Chi Minh City airport (HCMC is the city's official name, and though busts and portraits of Uncle Ho abound in public buildings, I never heard anyone in Saigon call it Ho Chi Minh City). Saigon sprawls, like Los Angeles, and virtually every street, from end to end, from morning into the night, is filled with someone on a bike, often with baby sitting in front, holding the handlebars, faces wrapped in large pollution masks, going somewhere, at 35 mph.

There are cars and trucks, but they look like whales surrounded by schools of fast fish. Welcome to Vietnam, the motorbike economy—adept, efficient, always in forward gear.

The country is run by one of the world's last Communist parties, which had the sense 20 years ago to open the economy to the world but has a bad habit of degrading the value of Vietnam's currency. Still, it's doubtful that even a Bernankian flood of liquidity will crash the motorbike economy for long.

I hadn't come to Vietnam to see the motorbikes (though one could). It was to visit a symbol of Vietnam's rise—the new, 500,000-square-foot Intel microchip assembly and test factory on the edge of the city. In five years Intel hopes to hire 5,000 workers. Over a lunch of pho ga (chicken noodle soup) in the cafeteria, I talked with six of them. Naturally, I asked about the motorbikes.

"We now have a motorbike culture," said Nguyen Thi Bich Lan, who got a masters in industrial and operations engineering at the University of Michigan. "I can't wait to get home to ride my bike," she says.

To where? "We hang out with our friends," said Do Hoang Tram, a logistics manager. "It's easy to get around," she said, "so we ride all over the city, looking for new cafes or the latest good restaurant."

This is Vietnam's emerging middle class—in their 20s or 30s, working for a household-name technology company. Two studied outside Vietnam. All spoke English (the country's literacy rate is over 90%) with such relaxed self-confidence that after about an hour the eerie thought occurred that if these six were sitting in the cafeteria of our building in New York, you'd assume they had been there for years.

Saigon, a city in chaos 36 years ago, is a place that seems almost impenetrably Vietnamese but also wholly open to the world's new rhythms. Something more than money is going on here.

We talked about health care. It is a public system, but private hospitals and clinics run by private doctors can bill Intel's insurance plan. We talked about American movies. "We get all of them here," said Lam Binh Thanh, a senior engineer.

These six represent the best part of the Vietnam story right now. Leaving Intel's state-of-the-art plant, a drive to the Mekong Delta takes one past miles of pretty shabby corrugated-steel shops, food stands and houses. See them while you can. Indochina Capital, an investment house based in Vietnam, issued a report this week predicting that by 2050, Vietnam will be the world's 14th largest economy on a purchasing-power basis of total GDP—ahead of Canada, Italy, South Korea and Spain. Nokia said yesterday it would build a mobile-phone plant near Hanoi, "with further sizeable investments thereafter." Indochina Capital estimates an annual growth rate through 2025 of about 7%.

All is not lost, America. The techs in Intel's Saigon plant mostly have masters or vo-tech degrees. For its new factories in Oregon (wafer fabrication) and Arizona (making beyond-small 14-nanometer microchips), Intel needs loads of lunch-bucket workers with Ph.D.s—if they can find them in the U.S.

Vietnam's millions, rolling endlessly forward on their agile motorbikes, seem to know where they want to go. Next question: Do we?



DANIEL HENNINGER