High-end restaurants are overflowing, fashionably dressed young women fill chic stores, and everyone seems to be talking on cell phones while plowing motorbikes through roundabouts swarming with Honda scooters and SUV taxis. Vietnam's main stock market, after losing 66 percent last year, has been riding a seven-month high, up more than 20 percent this year.

But the conspicuous consumption masks the reality that the global economic implosion is rippling across the Pacific and jolting this Communist Southeast Asian country, which had enthusiastically ridden the rising tide of globalization.

Small Taiwanese manufacturers of low-end tech products silently closed plants in Vietnam for good during the New Year Tet celebration without telling workers.

The once-sizzling real estate market has seen home prices drop by as much as 40 percent in some areas. And Vietnam's young information technology industry - the embodiment of the country's entrance on the world stage - is being hit by widespread layoffs and the sober realization among young workers that global business is far riskier than they ever thought.

"The median age in Vietnam is 27. Most people started careers within the last seven years. So most people in the tech industry have only experienced boom times," said Jonah Levey, chief executive of Navigos Group, an executive search firm in Ho Chi Minh City. "This has been a massive shock."

The downturn, triggered by the meltdown of financial institutions on the other side of the globe, has stunned workers across Asia who had seen earnings improve dramatically in recent years as countries hitched their fortunes to the West by furnishing everything from T-shirts to software and iPods.

Vietnam was late to the global economy, following the rise of neighbors China and India. But it made up for lost time in recent years, courting foreign investors, corporate giants like Intel and Vietnamese-American technologists from Silicon Valley to jump-start its IT industry.

More than anything, Vietnam's nascent tech industry best represents the country's ambitions to lift itself up.

"The IT industry has been a fast-track for opening up to the world," said former Silicon Valley executive Steve Cook, now chairman of Enclave, a Da Nang-based software company. "It's a perfect fit for Vietnam, with its heavy emphasis on science education."

In 2007, Vietnam's GDP increased by 8.3 percent from the previous year, fueled by billions of U.S. dollars in foreign investment and booming industrial production. Intel made a US$1 billion investment to build a massive semiconductor factory along the Hanoi Highway in Ho Chi Minh City.

Other companies - Hewlett-Packard, IBM, Sun Microsystems - rushed to open up operations in the nation that had been off limits to U.S. businesses until just a few years ago.

Vietnam views Intel in particular as critical to its economic hopes. Government officials nervously ask Intel's Vietnam country manager Than Trong Phuc if the construction of its plant, which eventually will provide some 4,000 jobs, is still on track.

"Nothing has changed," he said in an interview, a ray of hope amid all the bad news.

But in many other ways, the global recession has dampened the Vietnam Dream.

Vietnam's low-end export industry - from clothing to coffee - has blunted some of the pain because it was not as exposed to high-end spending cutbacks in the West as countries such as Taiwan are.

Nonetheless, Vietnam's GDP growth is expected to shrink from 6.2 percent between 2007 and 2008 to 3.3 percent this year over last, according to the International Monetary Fund. Industries exposed to global markets - particularly technology - have felt the brunt of the downturn.

Just about all of the city's Internet companies have slashed jobs, said blogger Nguyen Thi Khanh "Chip" Huyen, a technology evangelist for ePi Technologies, a media portal based in Ho Chi Minh City.

Meanwhile, hundreds, if not thousands, of software positions have been lost and a few software companies have even folded. The US$600 million a year software industry, which had been growing at about 30 percent a year in terms of revenue and directly employs about 60,000 people, could see no growth this year, according to local tech associations.

Just a few months ago, engineers like Son Nguyen and Vu Duong were hotly sought after by companies, at times receiving multiple offers. A few weeks ago, though, they were handed pink slips along with scores of others by Virginia-based outsourcer CSC.

"We didn't think we were on the list," said Nguyen, who sat in a cafe on a weekday with his former work mate. "They needed to cut costs. They needed to cut some people with high salaries."

The engineers, both in their 30s, earned about US$1,200 a month - a princely salary in a country where many still live on less than US$1 a day.

Some workers assumed they'd stay with their companies their entire careers, said unemployed engineer Vu Ngoc Phan. "Some people are very panicked when they get laid off," he said. "They scream. They feel angry. A lot of girls just cry."

It wasn't long ago that talented engineers could get job offers overnight - and 50 percent pay hikes, said Navigos CEO Levey, who also oversees Vietnamworks.com, a jobs site; Caravat.com, a business networking site; and Vietnamskills.com, a marketplace for training programs.

Industry leaders know better times will return. They are more concerned with longer-term obstacles facing the young IT industry, including better technical education, said Phi Anh Tuan, vice president of the Ho Chi Minh City Computer Association. Intel, for one, has complained loudly about a dearth of technically adept workers coming out of college.

But the slowdown has some college students rethinking careers.

"Two or three years ago, everyone wanted to study technology," said Huyen, the blogger. "Now, they want to study something more realistic, like marketing or PR."

Veteran Silicon Valley entrepreneur Thinh Nguyen has seen orders for his Ho Chi Minh City company Pyramid Software Development drop 30 percent. Nguyen believes if he could just pick up a few small projects he'll be able to avoid layoffs of workers whose families often pooled all of their resources to give their children a technology education and a shot at the middle class. "For a 20-, 30-person project, you'll get our full attention," he said.

Some of those laid off have expressed anger at what they see as reckless behavior on the part of the United States. Most, though, understand it's the price for tying their country's economic fate with that of the rest of the world.

"We are now integrated with the world," engineer Phan said. "Everything is connected."