The move is in line with a commitment the country made when it joined the World Trade Organization in January last year, the ministry said on its Web site.

Since the country joined the WTO, foreign investors have been allowed to hold stakes in retail joint ventures with local partners, it said. "We shouldn’t panic when further opening up the market to foreign investors, but we shouldn’t be careless either," Deputy Minister Nguyen Cam Tu said. Tu said there won’t be a rush of foreign retailers to Vietnam as the market will be open with conditions conforming to the WTO commitments.

Vietnam won’t also open the market for such commodities as rice, cigarettes, crude oil, medicines, books and magazines, rare metals and gemstones, the ministry said. The country will allow foreign retailers to import tractors, cars, motorbikes from Jan. 1, and alcohol drinks, cement, fertilizer, steel, paper, tires and visual and audio equipment from January 2010, it said. "Vietnam’s retail market is more suitable with small-sized retailers so domestic companies will be able to maintain their foothold," said Hoang Tho Xuan, head of the ministry’s domestic-market department. Another senior official from the ministry forecast that large retail groups will enter Vietnam from 2009, but mostly under franchising agreements.