Firms from Taiwan bear brunt of riots in Vietnam

More than 100 Taiwan-owned firms attacked; many have suspended work

WEDNESDAY night was a hot night in Vietnam. And inside the Taiwan-owned steel mill being built in the central Ha Tinh province, temperatures were even higher, hitting 45 deg C.

So when Vietnamese workers taunted their Chinese counterparts about the dispute in the South China Sea, it lit up the already combustible atmosphere. Words turned into blows between both sides, which numbered about 500 each, and the facilities were set on fire.

As the conflagration raged on, a Chinese worker sought refuge in an "enclosed space" where he was later found dead from heat stroke.

The incident at Taiwan conglomerate Formosa Plastics Group's steel plant is the first confirmed fatality from the rash of anti-China protests that erupted across Vietnam this week.

Mr Yu Chin-chang, assistant to vice-president at Formosa, said over the phone from its headquarters in Taipei that the workers involved were hired by a Chinese contractor for infrastructure building. He declined to give more details about the dead worker.

Work at the US$20 billion (S$25 billion) steel mill has ground to a halt, he said. It was slated for completion in 2017, when it would be South-east Asia's largest steel-making facility.

Prestige projects and smaller factories alike owned by ethnic Chinese interests have been the collateral damage in popular Vietnamese anger at China over its oil rig deployed in disputed waters off the Vietnamese coast.

Firms from Taiwan, Vietnam's fourth-largest foreign investor, have borne the brunt. More than 100 Taiwan-owned firms were attacked and 10 set on fire, said Taiwan's Vice-Economics Minister Shen Jong-chin yesterday. Some 400 have suspended operations.

The costs will add up. Accumulated investments from Singapore, Taiwan, Hong Kong and mainland China in Vietnam, a popular investor destination in the past decade for its relatively cheap and hard-working workers, totalled US$75 billion last year.

Yesterday, those in Vietnam described a grim atmosphere. Some expatriates disguised themselves as locals by donning factory uniforms to flee factories; others checked into hotels for security.

"There is a real sense of fear," Mr Chen Bor-show, director-general for the Taipei Economic and Cultural Office in Ho Chi Minh City which acts as Taiwan's consulate, told The Straits Times.

"Over 1,000 Taiwanese have left and we are arranging for more to go." More than 40,000 Taiwanese businessmen and their families live in Vietnam.

He added, however, that things have calmed down, with the office calling local police to help those trapped in factories to leave.

The Taiwanese government yesterday said it will distribute 20,000 posters with the words "I am Taiwanese, I come from Taiwan" to its people in Vietnam.

But this - even if effective - comes too late for many.

A spokesman for Toung Loong Textile said it has closed its two factories in Binh Duong province after doors and windows were damaged, and put up its Taiwanese workers in hotels while discussing if they should return home. Its more than 300 local workers were told to stay home.

Investors from Hong Kong have also been hit. Esquel Group, which makes cotton for brands such as Ralph Lauren and Muji, has had its factory burned down, confirmed a spokesman in Hong Kong. All its employees are safe.

With the crisis still spinning itself out, many firms are taking a wait-and-see approach to whether they will leave for good.

Political risk consultant Raymond Wu notes that many Taiwan companies have sunk money, effort and technology into Vietnam over the past 10 to 15 years.

"If things can be brought under control within a week or 10 days, and the government can give reassurances that the chaos will not be repeated, most will not want to relocate. But beyond that, the damage will be permanent."

Additional reporting by Pearl Liu