STEVE INSKEEP, host:
When Americans spend less, the people who feel the difference include workers overseas. NPR's Michael Sullivan reports from one affected country - Vietnam.
MICHAEL SULLIVAN: It's still a little early to predict what a slowdown in U.S. consumer spending will mean for Vietnam. But, on the production floor at state-owned garment factory Hanosimex, workers are already worried. Nguyen Thi Thao(ph) make about $70 a month here and is grateful for it. She's 28 with a husband and a 9-month-old baby.
Ms. NGUYEN THI THAO (Vietnamese Factory Worker): (Vietnamese spoken)
SULLIVAN: I watch the news on TV, and I hear about all the trouble in the U.S. she says, and I know it will affect us because if the U.S. economy slows down Americans might reduce orders and spending. And that might mean fewer jobs for people like me she says. She's not the only one who thinks so.
Mr. ADAM SITKOFF (Executive Director, American Chamber of Commerce, Hanoi): The United States is Vietnam's number one single largest export destination. About half of all exports from Vietnam to the U.S. are in what we would consider fashion items like clothing and footwear.
SULLIVAN: Adam Sitkoff is the executive director of the American Chamber of Commerce in Hanoi.
Mr. SITKOFF: As American consumers withdraw their spending and head into a sort of financial cocoon, you're going to see these exports drop. And that's bad for the Vietnamese economy, it's bad for Vietnamese workers, and it's bad for bilateral trade.
SULLIVAN: The U.S. market accounts for about 60 percent of the exports at garment-maker Hanosimex. And the company's deputy director, Nguyen Thanh Bingh(ph), says her clients have already started cutting back on orders.
Ms. NGUYEN THANH BINGH (Deputy Director, Hanosimex): (Vietnamese spoken)
SULLIVAN: Among our high-end customers, orders are down about 40 percent from last year she says. Orders for less expensive items are off about 10 percent, reflecting trends in the U.S. as consumers shift spending from high-end retailers to box stores like Wal-Mart and Target. And almost all our customers Nguyen Thanh Bingh says, are asking her to lower prices. Nguyen Thanh Bingh says her company has no plans to lay off workers for now, but large, state-owned companies like hers are better equipped to ride out the economic downturn. Smaller producers here, private producers in Hanoi and Ho Chi Minh City have already started letting people go. Vietnam's economic growth has been phenomenal in recent years, averaging about 8 percent, second only to China.
A record 60 billion dollars in foreign direct investment was pledged this year, but that was before the global economy went south. Dr. Phan Huu Thanh heads Vietnam's Foreign Investment Agency. He says Vietnam may end up with only a third of what's been pledged as credit and capital become tight worldwide. But, he insists, that will still be enough.
Dr. PHAN HUU THANH (Head, Foreign Investment Agency, Vietnam): Even though the Dow turned off the economy of the world, but we're concentrating to get to a good condition for investor to implement their project in Vietnam now.
SULLIVAN: The government is expecting a drop in economic growth this year - from about 8 percent to roughly 6 percent. That's bad news for a developing economy but not as bad as it could be. Again, Adam Sitkoff of the American Chamber of Commerce.
Mr. SITKOFF: But, the good news is that Vietnam is still one of the fastest-growing economies in the world. Day by day, week by week, we still see more international companies looking at Vietnam as a destination to do business, a destination to manufacture. And so as the world economy seems to sink and contract here, companies all around the world are going to be looking at the bright spots where there is still positive growth. And I think Vietnam is going to remain one of those locations.
SULLIVAN: Michael Sullivan, NPR News, Hanoi.
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