Smash hit

At the beginning of the year, Vietnam was the second-fastest growing economy in Asia, celebrating annual growth of 8.5 per cen, a rate that was second only to China's.

Leading businessman say that, as an emerging economy, Vietnam is going through a process that China began 15 or 20 years ago and it is no surprise that growth has been so rapid.

Huynh Thanh Phong, who established the Prudential's Vietnamese business, said: "In the last five years we have seen a big difference. The boom-time feeling began before the Asian crisis [of 1997]; what we are seeing now is the second wave."

Mr Huynh Thanh, managing director of the UK group's Asian insurance operations, said that the main financial transformation the country had undergone was the Government's decision in 1998 to allow people to set up their own businesses.

Ten years on, and an increasingly liberal - although Communist - regime has eased rules governing foreign ownership, supported the growth of a capital market, and paved the way for a $200 billion (£101 billion) investment programme to provide the infrastructure necessary for growth.

The Government is likely to provide about $100 billion over the next ten years, with the private sector expected to provide the remainder.

"The Vietnamese Government is convinced of the need for economic reform and the need to drive it through," John Hutton, the Secretary of State for Business and Enterprise, said last week as he became the first UK trade minister to visit the country.

The expansion drive has prompted the development of an entrepreneurial culture in the country, where the average age is 26 and 80 per cent of the population is under 45.

David Thai, a businessman who grew up in the US, opened his first Highlands Coffee branch in Saigon in 2002, having set up with $100 of capital. His firm is now estimated to be worth $100 million.

Do An Nguyen Duc, the chairman of HAGL, a Vietnamese property company, said recently that he was looking to buy a stake in Arsenal FC, the British football club.

Ho Chi Minh City plays host to a crowd of international businesses, including HSBC and Citigroup, the banking groups, and Prudential.

BP, the oil and gas group, Rolls-Royce and Mercedes-Benz, as well as GlaxoSmithKline, the pharmaceuticals giant, are committed to invest in their operations in the country. Serious luxury manifests itself through cars and Mercedes has a factory in Vietnam and wealthy local entrepreneurs ensure that not every model is exported.

The multinationals sit alongside high-end Western retailers, such as Louis Vuitton, which are helping to supply the city's retail malls that sell luxury goods.

If it is true that Vietnam is like China, eventually it will become another economic powerhouse as economists predict that any downturn should last little more than a year.

And, by then, the ranks of Vietnam's rising rich may have sold their mopeds in favour of cars.

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