A street in Hanoi, Vietnam. Vietnamese industrialists are concerned with the amount of construction work given to China (Dinkum/Wikimedia Commons)

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All our work is going to China, say industrialists in Vietnam

8 July 2014 | By Rod Sweet | 0 Comments

Vietnamese industrialists have slammed their government for giving all the best construction and development work to China, resulting in heavy economic dependence on their much larger neighbour.

From 2003 to 2011 Chinese contractors won five out of the country’s six chemical projects, both of its mineral processing projects, 49 of 62 cement manufacturing projects, and 16 of 27 thermal power projects, claimed Nguyen Van Thu, chairman of the Vietnam Association of Mechanical Industry.

“But most of the projects lagged behind schedule,” he told a conference held last week by the Vietnam Chamber of Commerce and Industry, as reported by Vietnam’s Thanh Nien News. “Some were finished two to three years behind schedule, and the quality of materials and equipment provided for the projects proved so poor they usually had to be replaced.”

Whenever investors are authorised to choose contractors who offer the cheapest prices, the jobs go to Chinese firms, he said, adding that his association had asked the government to investigate all projects now being implemented by Chinese contractors.

The conference in Hanoi last Thursday took place amid rising tensions between the two countries caused by China’s deployment of a mobile oil rig in Vietnamese waters in early May, which Vietnam says is illegal.

Other speakers had even harder words. Dr Le Dang Doanh, former head of the Central Institute for Economic Management, told the conference that Chinese investors were “masters of bribery” and that they exerted undue influence over certain groups and individuals. He did not elaborate on who they were but described their influence as “obvious”.

“[Bribery] led to loopholes and eventually to Vietnam’s economic dependence on China,” he said, and called on the government to investigate individuals who had awarded too many important projects, especially energy projects, to Chinese contractors. He also called for revisions to Vietnam’s procurement process and its Bidding Law.

Representatives from the Vietnam National Textile and Garment Group (Vinatex) told the conference that its industry was also too dependent on China, with 46% of its materials imported from there.

As Vietnam-China economic relations continue to sour, Vietnamese textile and garment companies are seeking new partners to provide materials for production, said Dang Phuong Dung, secretary-general of Vinatex.

Overall, Vietnam should speed up negotiations on its free trade agreement with Europe and expand other opportunities for Vietnamese exporters, said Dr Vo Tri Thanh, vice director of the Central Institute for Economic Management.

Nguyen Hong Hai, secretary-general of Vietnam Association of Financial Investors, said Vietnam should take more drastic measures to prevent smuggling and tax fraud as a huge number of goods continue to be smuggled into Vietnam from China, contributing to a widening trade gap.

“Vietnam is good at producing rice, coffee and rubber, so, as a vendor of these products, we can freely choose our trading partners and markets,” he said.