News / Asia

Investors Return to Vietnam after Anti-China Protests

FILE - A worker checks a new assembly line at the Ford Hai Duong production facility in Hai Duong, Vietnam.
FILE - A worker checks a new assembly line at the Ford Hai Duong production facility in Hai Duong, Vietnam.
Ralph Jennings

Anti-China rioting in Vietnam earlier this year damaged more than 400 foreign-owned factories, sending thousands of foreign investors fleeing in fear of more violence. But foreign capital flows have resumed to pre-protest levels as the government pledges to protect investors, the economy grows and business costs remain low.

Factories pumping out clothes, furniture and consumer electronics have returned to business since the anti-China protests in May. The protests that killed 20 and injured hundreds followed China’s deployment of an oil rig in ocean waters claimed also by Vietnam. The act reignited centuries of Sino-Vietnamese hostilities, which include a 1979 border war.

But the foreign investors who power 17 percent of Vietnam’s economy and 66 percent of its exports have returned. Vietnam’s Communist government pledged to stop any further upsets. The government has also created investment conditions, including cheap factory labor, to keep foreign capital coming in. Ralf Matthaes, owner of the Ho Chi Minh-based market consultancy In Focus, says Vietnam bounced back because the government demanded stability for investors.

“I think the biggest change is that things have settled down. I don’t think there’s been an awful lot of fallout honestly. It’s business as usual. It wasn’t that big of a flare-up. The government is all powerful here and when they put their foot down they put their foot down, that’s it,” said Matthaes.

Foreign investors led by Japan, Singapore, South Korea and Taiwan have moved into Vietnam since the Communist government dropped investment barriers in 1987. Their projects have helped lift Vietnam’s $155 billion economy and eased rampant poverty by adding jobs.

Beijing’s deployment on May 2 of a rig operated by state-owned China National Offshore Oil Corp. inflamed Vietnam, which had designs for exploration in the same tract of the South China Sea near the country's east coast. As about 20,000 people protested, their rage expanded to include other foreign investors, especially those of Chinese heritage or with Chinese words in their signage. About 9,000 investors, largely Taiwanese, fled. Vietnamese authorities arrested 85 people in connection with the riots.

Since then, China and Vietnam have met formally to review the incident, and in July Beijing removed the oil rig. Ethnic Chinese now say they feel safe. Theng Bee Han, president of the Malaysian Business Chamber in Ho Chi Minh City, says ethnic Chinese are looking toward factory expansion in Vietnam.

“Putting aside the problems or the issues between Vietnam and China, from the entrepreneur’s perspective I think there is no threat at all for the Chinese investments, be they Chinese from Taiwan, Chinese from Hong Kong, Chinese from Malaysia or Chinese from Singapore. In fact people are very positive, moving toward the better side of Vietnam,” said Han.

Chinese from China are also making another run at Vietnam. China had ranked as Vietnam’s seventh largest investor before the riots. It poured $2.3 billion into the country last year, more than six times what was invested in 2012. But much of its investment is in the form of raw materials for textiles, machinery and consumer goods. Those supplies have dipped since May as Vietnam, wary of depending too much on China, explored its own resources instead.

Foreign investors are also excited by the return of Vietnam’s stock market to pre-protest levels after a 15 percent drop and by economic growth expected at 5.6 percent this year as export markets such as the United States improve economically. Analysts consider another upset unlikely as Vietnam draws half its tax revenue from foreign investment.

Michel Tosto, managing director at Viet Capital Securities in Ho Chi Minh City, says investors look back at the protest violence as a minor incident.

“It’s a short term blip. The market fell 15 percent, [which is] major, but it also recovered. So it adds to risk, but it doesn’t change anything to the long-term story,” said Tosto.

Over the long term Vietnam is expected to simplify investment permitting, expand land use rights for overseas investors, and build new transportation systems linking Ho Chi Minh City to outlying industrial areas.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comment Sorting
Comments
     
by: william li from: canada
August 15, 2014 12:03 PM
well, China can simply send another oil rig to the sea for a month, then those foreign companies are going to be hit again. lol I am sure those foreign companies will learn the lesson next time.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More