Vietnam offers help to riot-hit companies

AP News
Posted: May 22, 2014 3:00 AM
Vietnam offers help to riot-hit companies

HANOI, Vietnam (AP) — Vietnam on Thursday pledged to help companies whose factories were targeted during anti-Chinese riots last week, offering tax breaks and other incentives to try and undo some of the damage to its reputation as a low-risk country for foreign manufacturers.

The riots, the worst unrest to hit the tightly controlled country in years, followed peaceful demonstrations against China's deployment of an oil rig on May 1 in a part of the South China Sea also claimed by Vietnam. At least three Chinese workers were killed and more than 100 injured.

"We pledge our appropriate assistance to affected companies to recover and continue their business," Vietnam's Deputy Prime Minister Vu Duc Dam told a conference in Tokyo attended by business and political leaders from the region. "Almost all have now returned to normal operations."

A government statement late Wednesday said businesses hit by the riots would be entitled to a reduction of up to 30 percent in a special consumption tax and reduced import and export tariffs. Rents will also be reduced or waived for companies with damaged factories, the statement said.

Companies making everything from sandals to smartphones have set up shop in Vietnam in the past decade, attracted by the country's reputation for political stability, low wages and relatively skilled workforce. Many have congregated in industrial parks where they are shielded from some of the infrastructure problems apparent elsewhere in the country.

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While the rioting was triggered by anger at China, most of the factories looted, vandalized or set alight were not Chinese. Companies from around the world were affected, with Taiwanese firms especially badly hit.

The sudden violence shocked a foreign business community used to good security, but it may have been contained soon enough to limit damage to investment plans or the broader economy.