Chinese and Taiwanese manufacturers have been slowing their investments in Vietnam, and some have even begun moving out of the country, since the anti-Chinese riots in May this year, the Hong Kong Economic Journal reported Monday, citing industry players.
Following the riots in southern Vietnam, which claimed over 20 lives, Chinese and Taiwanese firms are moving to other nations such as Myanmar and Cambodia, the report said.
The riots also affected some Hong Kong, Japanese and South Korean enterprises which were operating in Vietnam.
Huang Chih-peng, Vietnam-based director of Taipei Economic and Cultural Office, admitted that Taiwanese firms have significantly slowed their investments in Vietnam, especially in the shoes and electronics manufacturing sectors.
Some manufacturers who were interested in moving to Vietnam due to the potential Trans-Pacific Partnership (TPP) agreement with the United States are now adopting a wait-and-see stance, the report said.
Mainland Chinese manufacturers’ investment confidence in Vietnam has been dented following the May incidents, Miao Renlai, chairman of the China Business Association in Ho Chi Minh City, was quoted as saying.
Large and mid-sized firms have hesitated to push forward their planned investments, while some are considering moving to Myanmar and Cambodia, he said.
The TPP will be a positive factor for Vietnam, but so far it has helped draw in only some small Chinese manufacturers, Miao said.
Vietnam authorities forecast a 23-percent fall in inbound foreign direct investment this year, compared to the level in 2013, the report said, citing Dang Xuan Quang, deputy director of the Foreign Investment Agency under Vietnam’s Ministry of Planning and Investment.
Affected factory owners have yet to receive any compensation from the local governments for their properties and assets that were destroyed in fires.
Vedan International Holdings Ltd. (02317.HK) is among the firms that are considering expansion in Cambodia and Indonesia, as they seek non-Vietnam options.
Nine Dragons Paper Holdings Ltd. (02689.HK) and Country Garden Holdings Co. Ltd. (02007.HK), meanwhile, are said to be holding back their projects in Vietnam.
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