BRITAIN yesterday called for greater access to Vietnam's fledgling financial and manufacturing sectors and Chancellor of the Exchequer Kenneth Clarke warned Vietnam against protectionism and over-regulation. Mr Clarke wrapped up a two-day mission by representatives of Britain's financial services sector with a clear plug for 'outward-looking' British involvement in unshackled banking and capital markets. 'I come here seeking greater access to the future financial services market,' Mr Clarke told top Vietnamese trade officials. 'Liberalisation here must be a priority . . . offering enormous potential rewards, but a strong manufacturing base must be complemented by efficient and effective financial services. 'There is a great danger that legitimate concerns to protect emerging domestic markets from being swamped by foreign competition may be misplaced. 'Protectionism which keeps out the very things one has most need of is the most damaging. 'Protectionism does not help the objective of equitable distribution of wealth . . . over the long term all stand to lose.' But he stopped short of directly referring to the tightly controlled Vietnamese economy, now growing at more than eight per cent a year. Earlier, Mr Clarke told Vietnamese bankers that banks with British experience - both foreign and domestic - needed government freedom to operate to their fullest capacity. He warned against 'insensitive' intervention, but again stopped short of directly referring to Vietnam's powerful State Bank, which keeps a tight rein on both foreign and domestic banks. Standard Chartered recently opened its first Vietnam branch in Hanoi and is now seeking approval for a second in Ho Chi Minh City, while Hongkong Bank is expected to formally apply for permission soon. Several foreign bankers say privately that they are assessing long-term joint venture involvement with Vietnamese banks to snare a slice of the domestic market, but only once more market freedom is introduced and more reliable information becomes available. Mr Clarke's mission, which included top officials from Coopers and Lybrand, Standard Chartered, Baring Securities and the Association of British Insurers, has pledged help from the London Stock Exchange in setting up capital markets. The visit is the most high-powered that Britain has mounted, as it seeks to broaden its somewhat subdued role in Vietnam. Britain is the 12th largest investor. Mr Clarke said an exchange now had to be a priority for Vietnam to maintain growth and attract foreign capital. Vietnamese officials aim to establish a market within 18 months. However, Standard Chartered chief executive Malcolm Williamson said that auditing standards had to be developed from scratch and that Vietnam had to decide what sort of market it wanted to operate. Giles Vardey, a member of the Board of Management of the Stock Exchange of London, said the details of technical help for Vietnam would soon be hammered out in London.