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

    Video Rubio Looks to Surge in New Hampshire

    Republican presidential candidate has moved into second place in several recent surveys and appears to be gaining ground on longtime frontrunner Donald Trump

    UN Calls for Global Ban on Female Genital Mutilation

    Recent UNICEF report finds at least 200 million girls and women alive today have undergone female genital mutilation in 30 countries

    UN Pilots New Peace Approach in CAR

    Approach launched in northern town of Kaga Bandoro, where former combatants of mainly Muslim Seleka armed group and Christian and animist anti-Balaka movement are being paid to do community work

    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.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.