Ri­ots dampen coun­try’s in­vest­ment cli­mate

China Daily (Canada) - - CHINA - By ZHANG JIAN­HUA in Hanoi Xin­hua News Agency

Wen Yong, a Chi­nese busi­ness­man in Viet­nam’s south­ern Binh Duong prov­ince, re­called the hor­ror on May 13 when anti-China ri­ots broke out there.

“I could only speak in a low voice. We called the po­lice, but it seemed they wouldn’t come very soon,” he said.

Wen, who owns the Yong Hao Shoe Co in Binh Duong prov­ince, was one of the many Chi­nese in­vestors caught up in the ri­ots.

Wen and other Chi­nese staff were hid­ing in the com­pany’s up­stairs of­fice, as the down­stairs of­fice was al­ready strewn with bro­ken glass and smashed fur­ni­ture.

“Nearly 20,000 people were ri­ot­ing. Po­lice used rub­ber bul­lets and tear gas but failed to con­trol the crowd,” Wen said.

Se­cu­rity forces had been de­ployed to Ho Chi Minh City to pro­tect the coun­try’s eco­nomic hub, leav­ing Binh Duong out of con­trol, he said.

“Any Chi­nese here?” a mob­ster asked the Viet­namese em­ploy­ees who stayed down­stairs. “No, they’ve al­ready fled,” came the an­swer from the em­ploy­ees, and Wen breathed a sigh of re­lief.

Wen, who ar­rived in Viet­nam 10 years ago from Jiangxi prov­ince, couldn’t have imag­ined that his busi­ness would be at­tacked three times on May 13.

The ri­ots in cen­tral and south­ern Viet­nam have tar­nished the coun­try’s im­age as a safe in­vest­ment en­vi­ron­ment.

Since open­ing its doors to for­eign in­vestors, Viet­nam has of­fered pref­er­en­tial land and tar­iff poli­cies to at­tract for­eign in­vest­ment. Af­ter en­ter­ing the World Trade Or­ga­ni­za­tion in 2007, for­eign in­vest­ment in Viet­nam hit a peak of $71.7 bil­lion in 2008, but that fell af­ter the out­break of the global fi­nan­cial cri­sis.

In 2013, Viet­nam at­tracted $21.6 bil­lion in for­eign di­rect in­vest­ment, up 54.5 per­cent year-on-year thanks in part to China’s in­dus­try up­grade.

Tak­ing the tex­tile in­dus­try as an ex­am­ple, Viet­nam’s 600 gar­ment and tex­tiles com­pa­nies earned more than $20 bil­lion from ex­ports in 2013, up 18.5 per­cent year-on-year, cre­at­ing 5 mil­lion di­rect and 2.7 mil­lion in­di­rect jobs, govern­ment fig­ures show.

But dur­ing the ri­ots, Chi­nese com­pa­nies suf­fered the most.

Re­porters learned that on May 13 alone, at least 19 Chi­nese com­pa­nies were burned down — 15 of them in Binh Duong.

In ad­di­tion, 10 com­pa­nies from Ja­pan, 55 from South Korea and some Sin­ga­porean com­pa­nies were also dam­aged and forced to close.

Pre­lim­i­nary es­ti­mates show the di­rect losses of Tai­wan­funded en­ter­prises in Binh Duong and its neigh­bor­ing prov­inces reached hun­dreds of mil­lions of dol­lars, ris­ing to bil­lions if in­di­rect losses are counted.

For­mosa Plas­tics Group from Tai­wan had planned to in­vest $23 bil­lion in Viet­nam’s cen­tral Ha Tinh prov­ince, but ri­ots there cost it $3 mil­lion, and losses from con­struc­tion de­lays are far larger.

The ri­ots have also af­fected

Nearly 20,000 people were ri­ot­ing. Po­lice used rub­ber bul­lets and tear gas but failed to con­trol the crowd.” WEN YONG OWNER OF THE YONG HAO SHOE CO IN BINH DUONG PROV­INCE

the coun­try’s eco­nomic sit­u­a­tion. The con­glom­er­ate’s in­vest­ment in Ha Tinh con­trib­utes nearly half the prov­ince’s tax budget.

When Xin­hua re­porters ar­rived in Ha Tinh on May 18, or­der had been re­stored but the Vung Ang eco­nomic zone ap­peared un­usu­ally quiet.

Sev­eral sand and gravel plants along the road from Ha Tinh to Nghe An prov­ince were still shut; shops were closed; and there were few cars.

For­mosa Plas­tics has claimed $3 mil­lion in com­pen­sa­tion for property dam­age.

Other Tai­wan en­ter­prises in Binh Duong and neigh­bor­ing prov­inces have also claimed dam­ages of hun­dreds of mil­lions of dol­lars, or $1 bil­lion if in­di­rect dam­ages are in­cluded.

Viet­nam is con­sid­er­ing re­duc­ing land and cor­po­ra­tion taxes and pro­vid­ing pref­er­en­tial loans among other mea­sures to com­pen­sate en­ter­prises af­fected by the ri­ots.

“We don’t want those. What we want is cash,” a busi­ness­man from Tai­wan said.

Wen, the shoe com­pany owner, told Xin­hua that “if there is any feel­ing of in­se­cu­rity again, we will not be able to con­tinue” to in­vest in Viet­nam.

On May 14, Viet­namese au­thor­i­ties threat­ened to use live ammo to dis­perse the ri­ot­ers. Wen and other Chi­nese staff then left Binh Duong for Ho Chi Minh City.

“I have to send them to Ho Chi Minh first, then come back to deliver wages for the em­ploy­ees, or they would think that I left with­out pay­ing them,” Wen said

Zang Xiao­hua, a rep­re­sen­ta­tive of Tai­wan’s Allover World, ex­pressed hope the Viet­namese au­thor­i­ties will strengthen se­cu­rity for for­eign in­vestors and their em­ploy­ees.

Viet­namese Min­is­ter of Plan­ning and In­vest­ment Bui Quang Vinh early on May 16 told MPI pub­li­ca­tion Viet­nam In­vest­ment Re­view each Viet­namese had re­spon­si­bil­ity to pro­tect for­eign in­vestors and em­ploy­ees, other­wise the coun­try’s in­vest­ment rep­u­ta­tion would be hurt.

The im­age of a safe in­vest­ment en­vi­ron­ment Viet­nam had built in the past 20 years was turn­ing very ugly, he said.

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