Hanoi walking a tightrope after chaos

It has to confront China, balance outrage at home and restore credibility with foreign investors

At a Taiwanese factory in a Singapore-run business park just north of Ho Chi Minh City, security men sitting behind shattered plate glass in a guardhouse said there is no question the Paracel islands in the South China Sea belong to Vietnam.

From the tiny guardhouse at the industrial estate to the high towers of Hanoi and Ho Chi Minh City, the universal view in Vietnam is that China's oil rig, HD981, is parked inside Vietnamese waters.

Since news of the rig's location became public on May 3, the Vietnamese government has been holding meetings in auditoriums across the country where local political elites have objected to China's action in the disputed waters.

The Vietnamese media has been filled with condemnation of China. Anti-China protests have even been allowed on the streets of major cities.

Yet the attacks that rocked the Taiwanese factory - one of hundreds targeted last Tuesday - came as a shock and a public relations disaster for the government.

The events have left the government walking a tightrope - confronting China, balancing nationalist outrage at home, and now also needing to restore its credibility with foreign investors.

"The state does not want to repress public displays of patriotism, but they need them to be orderly, they can't afford chaos," said Vietnam specialist Jonathan London at the City University of Hong Kong in a phone interview.

"The Vietnamese state, however, has little experience with organic, non-scripted politics. The country was searching for a way to let the world know there was anger at what the Vietnamese see as a blatant challenge from China," he said.

"Obviously the chaos that ensued in some places was a disastrous outcome, and a harmful development with respect to Vietnam's efforts to make a reasonably strong case to international public opinion."

The government says it has arrested well over 800 people, and is blaming provocateurs who allegedly paid others to demonstrate. But more protests are planned today, presenting another challenge - though few expect a repeat of last Tuesday.

"This has been an embarrassment; it is unprecedented," said Dr Net Le, a partner at the law firm LNT and Partners in Ho Chi Minh City.

"But things are now improving. The Ministry of Public Security has already given a guarantee to protect foreign investors. If the government makes sure this is not repeated, investors will be comfortable."

Still he warns that there may be more to the violent protests than the South China Sea issue.

"The government controls the trade unions, and says it represents the working classes," he said. "But they need to understand the workers."

One Vietnamese analyst, who asked not to be named, warned that "masses" of Chinese workers brought in by big investors recently for some projects - like Taiwan's Formosa steel plant in central Vietnam that saw a pitched battle between Chinese and Vietnamese workers - had raised some concerns.

Drawing a guarded comparison, he said: "We have no ill feelings towards Singapore investors. That is not always the case with Chinese investors.

"The government has to be conscious of public opinion. If you don't allow society to de-stress, it becomes a pressure cooker. This is a wake-up call. But it is also a signal that if elements of the government are pro-China, it may not go down well with the people.''

At the Taiwanese factory in the industrial park, a few workers have trickled back and begun to sweep up the debris. The 32-year-old head of the security unit, who did not want to be named, had a bandage on one hand where it was injured by flying glass shards.

He said he disapproved of the attacks on the factories.

But he added: "We Vietnamese have to protect our territory. The government must ensure it. I am not afraid of these mobs. Our men are out there at sea facing the Chinese. This is nothing.''