Factories torched in anti-China riot in Vietnam

Some non-China operations also mistakenly attacked

By
Kelly Tay

Flames of fury: Angry mobs - vexed by China's recent deployment of an oil rig in disputed
waters - looted factories and set industrial property alight in the southern province of Binh
Duong. - PHOTO: AFP
[SINGAPORE] Anti-China protests in Vietnam took a violent turn on Tuesday night, as
angry mobs - vexed by China's recent deployment of an oil rig in disputed waters - looted
factories and set industrial property alight in the southern province of Binh Duong. Two
Sembcorp-run Vietnam Singapore Industrial Parks (VSIPs) were among several industrial
zones hit by the unrest.
The Singapore government yesterday urged the Vietnamese authorities to restore law and
order "before the security situation worsens and investor confidence is undermined".
While businessmen The Business Times spoke to appeared largely unfazed by the protests -
most said the turmoil was likely a one-off isolated incident - analysts warned that undertones
of antagonism towards China could be a recurring theme in the socialist republic.
Reuters reported Tran Van Nam, vice-chairman of Binh Duong Province People's
Committee, as saying to local reporters: "About 19,000 workers were demonstrating against
China's violation of Vietnam's territorial waters . . . Some workers turned angry, destroying
companies' gates and entering the compounds and asking other workers to join a strike."
Reports suggest that the rioters had wanted to target Chinese companies and employees, but
ended up trashing Japanese, Korean, Taiwanese, and Hong Kong factories instead, after
mistaking them for Chinese-owned facilities - perhaps because of Mandarin-looking
characters on logos and signboards.
Several industrial parks were said to be affected too, with more than a dozen foreign-owned
factories torched - although no official numbers have been given. There were no reports of
casualties; police are said to be holding almost 500 people for questioning.
At the two VSIPs, four factories from China and Taiwan (which made garments and
electronics) were set on fire. Of the 424 companies operating there, 99 tenants were affected
by the protests, when crowds bashed windows and doors in, and looted factories.
The two VSIPs were set up in 1996 and 2006, as part of Vietnam's efforts to attract foreign
investments into the country. The parks are the result of a collaboration between Vietnam's
state-owned Becamex IDC Corp and a Singapore consortium lead by Sembcorp. The latter
effectively holds a 47 per cent share in the joint-venture company that manages the parks.
Mainboard-listed Sembcorp said that protesters were still circling the two parks as at press
time, though riotous activities were being controlled by VSIP security officers and local
police who remained on-site. Though more than 200 people have been evacuated from the
two VSIPs, BT understands that some parts of the industrial zone remain unaffected and
some tenants are continuing with operations.
The tumult in Binh Duong comes days after protests were staged in Hanoi and Ho Chi Minh
City over the past week. Earlier this month, China moved a drilling rig to a location 120
nautical miles off the coast of Vietnam, in a part of the South China Sea claimed by the latter.
Yesterday, a spokesman for Singapore's Ministry of Foreign Affairs (MFA) said that MFA
had called in the Vietnam ambassador to Singapore to register its "serious concerns" about
the security situation in VSIP I and II, and the attacks on foreign companies in the two
industrial parks. The spokesman added: "Singapore views this issue very seriously given our
close economic cooperation with Vietnam."
But businessmen who have a stake in the Binh Duong VSIPs do not seem too ruffled by the
incident. T Chandroo, chairman and CEO of Modern Montessori International (MMI) - which
has poured $2 million to build its first school in Vietnam - told BT: "So far we've never heard
of any such incidents happening in Vietnam. I take it as a one-off thing, and I'm very
confident things will settle down."
But analysts have another take. Said Barclays economist Leong Wai Ho: "I think it's a rude
awakening for foreign investors and potential foreign investors, and these things are going to
be factored into any company's strategic investments in Vietnam. If your production and
supply chains straddle China and Vietnam (as many operations do), things may not be so
smooth.
"No one saw this coming, and this anti-Chinese sentiment is not going to go away anytime
soon. It looks more like it's going to be a protracted series of geopolitical risk flares, which
will result in more of what we've just seen (in Binh Duong)."
Added CIMB economist Song Seng Wun: "We've already seen this happen between Japan
and China - they squabbled over islands, and two-way trade (took a hit) for a good year or so.
Depending on how officials respond, the same thing could happen here this time."