News / Economy

Anti-China Riots Shake Vietnam’s Investment Prospects

FILE - Stacks of 100,000 Vietnamese Dong notes ($4.70) are pictured as employees count money at a branch of the Bank for Investment and Development of Vietnam (BIDV) in Hanoi, Jan. 20, 2014.
FILE - Stacks of 100,000 Vietnamese Dong notes ($4.70) are pictured as employees count money at a branch of the Bank for Investment and Development of Vietnam (BIDV) in Hanoi, Jan. 20, 2014.
Marianne Brown
In Vietnam, businesses affected by last week’s deadly anti-China riots are beginning to piece their operations back together. But questions remain over whether any permanent damage has been done to the country’s investment prospects over the protests that got out of control.

Vietnam is still reeling from riots which erupted in industrial parks on the outskirts of Ho Chi Minh City and later in central province Ha Tinh, where two Chinese workers were killed and over 100 wounded.
 
FILE - Firefighters rest near a damaged Chinese owned shoe factory in Vietnam's southern Binh Duong province, May 14, 2014.FILE - Firefighters rest near a damaged Chinese owned shoe factory in Vietnam's southern Binh Duong province, May 14, 2014.
x
FILE - Firefighters rest near a damaged Chinese owned shoe factory in Vietnam's southern Binh Duong province, May 14, 2014.
FILE - Firefighters rest near a damaged Chinese owned shoe factory in Vietnam's southern Binh Duong province, May 14, 2014.
The riots broke out following heightened tensions over a Chinese oil rig deployed between Vietnam and the Paracel islands - which both countries claim.

Jerry Shum, investor relations director at Yue Yuen Industrial Holdings Ltd, a sports shoe manufacture which supplies Nike Inc. and Adidas AG, said operations in South Vietnam were now running normally.

“We have confidence, given what we have heard from our sources, that the Vietnamese government will restore law and order soon,” he said in an emailed comment to VOA.

He said the company took precautions last week and did not experience any damage or violence, adding: “We are still committed to operate in Vietnam and see it as an important part of our operations.”

Return to normal will take time

It will take time before things are back to normal, says Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, and the business community is encouraging the government to help in a fair and transparent way.

“Talking to Taiwanese and Koreans and others, the big issues now are how to handle the logistics of getting things back to normal. That involves some of the technical stuff like wage payments, social and health insurance and stuff. In the time period when things weren’t working because things were shut down, who pays for that?” he said.
 
Protesters chant slogans during an anti-China protest in front of the Chinese embassy in Hanoi, Vietnam, May 13, 2014.Protesters chant slogans during an anti-China protest in front of the Chinese embassy in Hanoi, Vietnam, May 13, 2014.
x
Protesters chant slogans during an anti-China protest in front of the Chinese embassy in Hanoi, Vietnam, May 13, 2014.
Protesters chant slogans during an anti-China protest in front of the Chinese embassy in Hanoi, Vietnam, May 13, 2014.
Sitkoff says although the riots have temporarily shaken investor confidence, they will not affect Vietnam’s long-term investment prospects.

This is partly because the government has made it very clear that this will not happen again, Sitkoff says.

“It’s done a very effective job of reaching out to key stakeholders and making sure that people understand that their priority is to continue calm and stability here and to let foreign investors know that the attributes that make Vietnam an attractive destination for investment are still going to continue here and that people don’t need to worry,” he said.

At a news conference on Saturday, Do Nhat Hoang, director of Vietnam’s Bureau for Management of Foreign Investment under the Ministry of Planning and Investment, said Taiwanese companies had been mistaken for Chinese.

Wait-and-see

Hoang said Vietnamese authorities are taking appropriate measures to assist investors in restarting production.

However, not everyone is so confident.

Economist Vuong Quan Hoang, co-author of What We See, Why We Worry, Why We Hope: Vietnam Going Forward says he believes investors will keep a “wait-and-see attitude” for some time.

He said part of the problem is that the government’s decision-making process on this issue is not clear from the outside, and analysts are left to speculate.

“I don’t know whether such a political will be able to make things happen the way politicians and leaders want," said Hoang. "Apparently they didn’t want to see the riots and the kind of effect we’ve been seeing over the past week. Nobody wanted that.”

The crisis could also lead to changes within the country. Some observers have said anti-China protests sparked riots among factory workers because of grievances over poor working and living conditions.

Need for reforms

Hoang said it is good that this issue has been raised.

“Now they also raise [the] issue about the roles of trade unions in those factories. I know that the issue is not easy to solve, but at least big brains in society will have to sit down and agree that these are things we have to discuss," he said.

Sitkoff says the current environment is a good opportunity for Vietnam to make itself even more attractive to foreign business and undertake some of the reforms that have been necessary for a long time to make the country more competitive.

The Vietnamese government feels bad, he says, and it wants people to come back.

Factories Torched in Anti-China Protests in Vietnam
 
  • Protesters targeted an industrial area in Binh Duong. The crowd set everything on fire, from materials, computers, equipments to other machines.
  • Protesters set truck on fire during a protest against China in the southern province of Binh Duong.
  • Protesters gathered at Amata Industrial Park, Bien Hoa City, Dong Nai Province, Vietnam.
  • Protesters gathered at Amata Industrial Park, Bien Hoa City, Dong Nai Province, Vietnam.
  • A foreign company displays banner supporting Vietnam in Dong Nai.
  • A factory in Binh Duong was set on fire. Banner says “We love Vietnam. Please protect our rice bowl."
  • A factory in Binh Duong was set on fire. Banner says “We love Vietnam. Please protect our rice bowl."
  • Protesters gathered at Amata Industrial Park, Bien Hoa City, Dong Nai Province, Vietnam.
  • Protesters gathered at Amata Industrial Park, Bien Hoa City, Dong Nai Province, Vietnam.
  • A banner says “Our company is not a Chinese company” in Binh Duong.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

This forum has been closed.
Comment Sorting
Comments
     
by: We just fade away
May 20, 2014 5:57 PM
When the oil rig is moved away in August as scheduled, there will be no real winner but both sides will declare victory and things will calm down until ???


by: We just fade away
May 20, 2014 5:42 PM
What riots? -There will not be any riot because the government says so.
A shooting war between Vietnam and China is unlikely to break out. Labor costs are rising in China, more and more investors are considering moving their operations out of China to somewhere else, and Vietnam will be getting a good portion of that and that means more jobs for the people and exports growth for the country.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.