Vietnam Protests Over China Oil Rig Damage Taiwan-Owned Factories

May 14, 2014

Anti-China rallies sparked by the placement of an oil rig in waters near Vietnam damaged factories owned by Taiwanese companies, with some plants closing as Vietnam detained hundreds of protesters.

Vietnam’s government has called for the removal of the Chinese exploration rig from waters near the contested Paracel Islands, with Prime Minister Nguyen Tan Dung describing China’s move as “extremely dangerous.”

Taiwanese companies with factories in Vietnam halted operations, with some citing damage to plants from the protests. One person was slightly injured and more than 200 Taiwanese people took refuge at a hotel in the southern province of Binh Duong, according to Chen Bor-show, director general of the Taipei Economic and Culture Office in Ho Chi Minh City.

“The workers are not choosing from which country the factory belongs,” said Bob Hsu, general manager of Taiwan’s Great Super Enterprise Ltd., which has closed its garment factories in the southern province of Dong Nai. Protesters looking at company names “are just trying to find a Chinese word. It includes Korean, Japanese factories.”

“I asked the local police to protect my workers,” Hsu said today in Ho Chi Minh City. “We moved staff outside. I am worried, so we are destroying any Chinese words in the logo.”

Operations Halted

Formosa Chemicals & Fibre Corp.’s Vietnam unit halted operations and is assessing damages, the company said in a statement to the Taiwan Stock Exchange. Kenda Rubber Industrial Co., Headway Advanced Materials Inc., Sanitar Co. Ltd., Advanced International Multitech Co., Tainan Spinning Co. and Yung Chi Paint & Varnish Manufacturing Co. were among those announcing temporary closures.

Advanced International said its plant suffered damage and items were stolen yesterday after an anti-China demonstration. Formosa Taffeta Co. said the office building and computers of its Vietnam unit were damaged by intruders yesterday.

Among stocks affected by the protests in Vietnam, Sanitar Co. lost 5 percent to NT$32.40 and Tainan Spinning fell 2.8 percent to NT$19.35 today. Taiwan’s benchmark Taiex Index rose 0.7 percent.

Police are holding almost 500 people for questioning over the damage to property in Binh Duong, according to Mai Cong Danh, deputy chief of the province’s police. The situation is stabilizing, he said today by phone.

Protesters targeted the Vietnam-Singapore Industrial Park and other factory parks in Binh Duong yesterday, “specifically manufacturing companies that are owned and/or managed by Chinese as well as Chinese expatriates working for other companies,” the industrial park said in an e-mailed statement.

Singapore Concerns

“During the night the protesters set fire to three factories,” it said in the statement. “There are no reported casualties. The local police are on site and have taken over security of both industrial parks.” About five companies’ factories were damaged by fire, according to Danh from Binh Duong police.

Singapore called in Vietnam’s ambassador to the country to voice concerns over the protests, according to a statement from the foreign ministry.

“Singapore views this issue very seriously given our close economic cooperation with Vietnam,” the ministry said in the statement. The government has “requested the relevant Vietnamese authorities to restore order urgently.”

Taiwan condemned the violence, according to a statement on the website of Taiwan’s Ministry of Foreign Affairs. The ministry urged Vietnamese to restrain from “irrational acts” and asked the government to protect people’s safety and property.

Companies Vandalized

Hundreds of companies in Binh Duong were vandalized during demonstrations yesterday, with Chinese, Taiwanese and South Korean-owned plants affected, online news service VnExpress reported. The VnExpress report included a photo a South Korean flag being draped over the Chinese characters on the sign of a company outside a factory in Binh Duong.

China and Taiwan have been separately governed since 1949, when China’s Nationalist government fled to the island during a civil war against Communist forces. China still claims Taiwan as part of its territory, and Taiwan’s official name is the Republic of China.

Last year Vietnam exports to Taiwan were $2.2 billion, according to Vietnam government data, while Taiwan exports to Vietnam were $9.4 billion. Taiwanese companies were early investors in Vietnam, Raymond Wu, a business consultant in Taipei, said today by phone.

Mira Hotel

Unless attacks on Taiwanese companies subside soon “there will be lasting consequences,” Wu said. “This is a big surprise. We hope this is something of an isolated incident and will not cause permanent damage to the investment confidence of not only Taiwanese investors but investors from other countries.”

More than 200 Taiwanese people took shelter at the Mira Hotel in Thu Dau Mot, according to Chen from the Taipei Economic and Culture Office. There are more then 1,000 Taiwanese companies in nearby areas, Chen said, and airlines are putting on larger planes to bring nationals back to Taiwan.

China is taking action to protect its citizens in Vietnam, Foreign Ministry spokeswoman Hua Chunying said today in Beijing.

“We urge the Vietnamese side to immediately take necessary steps to stop these activities and seriously punish crimes to ensure the security of Chinese citizens and institutions in Vietnam,” Hua said.

‘Any Factory’

The U.S. Consulate-General in Ho Chi Minh City sent a statement to its citizens warning about demonstrations “aimed at Chinese-affiliated companies and factories in and around Ho Chi Minh City and Binh Duong province.” The Chinese embassy in Vietnam posted a statement on its website urging workers to avoid unnecessary outdoor activities.

“There’s a lot of concern about it,” said Nate Herman, the Arlington, Virginia-based vice president of international trade for the American Apparel & Footwear Association, in an interview today during a visit to Ho Chi Minh City.

“It seems to be an issue where protesters are targeting any factory they think is Chinese-owned, and maybe because of a lack of understanding they seem to also be targeting Taiwanese and Korean-owned factories,” Herman said. “It just seems to be a nationalistic issue where people are taking out their frustration with China against anything that resembles Chinese.”

U.S. State Department spokeswoman Jen Psaki said on May 8 that China had engaged in “dangerous conduct and intimidation” over the rig. Hua from China’s Foreign Ministry said last week the U.S. should stop irresponsible comments that encouraged some countries to take provocative maritime actions.

Vietnam and China fought a border war in 1979, with ties normalized in 1991. Vietnamese history over the last two thousand years has been characterized by Chinese incursions into what is now Vietnam’s territory, and streets in cities are regularly named after heroes from those conflicts.

–With assistance from John Boudreau in Hanoi, Yu-Huay Sun in Taipei, Sharon Chen in Singapore and Edmond Lococo in Beijing.

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