SOURED of investing in China, stiff-armed by North Korea, and wary of business in Laos or Cambodia, Japanese companies are eagerly eyeing another of Asia's communist states: Vietnam. Japanese companies have so far made limited investments in Vietnam, less than some European nations. The government here treads carefully in dealing with the old adversary of the United States by generally supporting a US-led economic blockade of Vietnam.
The US has done little to restrain its allies from trading with Vietnam, but strongly discourages sizable investments. A US Senate resolution helped to stop plans by Honda Motors Co. in 1987 to open a motorcycle plant in Ho Chi Minh City.
But diplomatic efforts and lobbying by some US companies are slowly lifting Hanoi out of isolation, leading some Japanese leaders to wonder if it is time for Tokyo to buck the blockade.
Precedent set in China
There is a precedent. Last July, Japan broke with its Western partners and normalized economic ties with China by resuming a credit program, eroding the international sanctions imposed after the 1989 Beijing massacre.
``The go-sign for Japanese corporations to invest in Vietnam will be the time when the Japanese government decides to give economic assistance,'' says Teizo Taya, international expert at the Daiwa Institute of Research. ``That time is coming quickly.''
The US, which gave a wink of approval to Japan's renewed embrace of China, may look less kindly on a similar Japanese move toward the hard-line Communist regime in Hanoi.
The issue of ties with Vietnam touches deep emotions in the US. Washington helped organized the sanctions against Vietnam after its troops invaded Cambodia in 1978 and installed a loyal Marxist regime there, and it is withholding diplomatic recognition of Hanoi until it accounts for the remains of some 1,700 US soldiers believed to be missing from the Vietnam war.
But the US also has encouraged Japan to assert diplomatic leadership more in Asia, and Japan has looked for opportunities to do so. Japan especially wants to use its economic power as a force to stabilize its communist neighbors.
US sends mixed signals
``Normalizing relations with Vietnam before the US does will be the test case for Japan on whether it can be an independent player in Asia,'' says Osamu Nariai, researcher at the International Institute for Global Peace.
Vietnam itself, after losing much of its economic support from Moscow and former allies in East Europe, has tried to break the embargo, with only limited success. It rejects Soviet and US calls for a United Nations role in managing war-torn Cambodia until elections are held.
Hanoi's chief hope is to stop the US and Japan from blocking attempts by the International Monetary Fund (IMF) to provide a financial aid package to debt-ridden Hanoi. An IMF stamp of approval would help bring Western investment.
Japanese leaders point to the US decision last July to open direct talks with Vietnam, and to the October visit of Vietnam Foreign Minister Nguyen Co Thach to Washington, as encouraging signs that Japan can likewise move closer to Vietnam, and in its own way.
Mr. Thach also stopped in Tokyo after his US visit, the first time that a Vietnamese foreign minister had officially visited Japan in 12 years. As one sign of a shift by Japan, Thach was promised a grant for a national television station. He stayed for six days, visited a car plant, and met with business leaders.
In anticipation of a government green light for investment, Japanese companies began to flock to Vietnam late in 1990. With a new liberal investment law, Vietnam offers the prospects of low-wage workers, a market of 67 million people for Japanese goods, and a large source of resources, such as oil and timber. In 1987, a Japanese company was first in line to buy Vietnam's first export of oil.
Two-way trade between Vietnam and Japan jumped more than 70 percent last year, according to the Japan-Vietnam Trade Association. Japan has become the leading non-Communist trading partner for Vietnam. Japanese investments, which technically violate the embargo, remain small at $71 million. But that amount puts Japan as the fifth largest investor, with an estimated 10 to 12 percent of total foreign investment.
Some Japanese investments announced in recent months include a $2 million soap factory, a $300,000 glue factory, and a fertilizer plant. Showa Shell Sekiyu, a Japanese oil company, is reported to be negotiating with Vietnam to do offshore drilling. Vietnam is making plans for 15,000 Japanese tourists this year, up from 2,000 last year.
Keeping a low profile
Powerful Japanese trading companies, such as Mitsubishi Corp., are opening offices in Vietnam. Some have kept a low profile in Hanoi and Ho Chi Minh City for years, laying the ground for full business relations, while trying not to jeopardize their access to the US market.
The Japanese press reported that Prime Minister Toshiki Kaifu was ready to announce a resumption of aid to Vietnam in an ``historic'' speech during a planned tour of non-Communist Southeast Asia nations in mid-January. But the trip was canceled because of the Gulf crisis.