Hundreds of people have been arrested in what the New York Times calls the “worst public unrest in recent Vietnamese history,” as crowds ransacked more than a dozen foreign-owned factories in an industrial park near Ho Chi Minh City.
The riots were initially a protest against the mainland Chinese government, though a majority of the factories damaged were actually owned by Taiwanese or South Korean companies. To some extent they seem also to have been motivated by anger over working conditions and a lack of representation inVietnam’s authoritarian government.
China and Vietnam have been locked in a tense feud since the beginning of the month, when a Chinese oil rig was parked in the disputed Paracel Islands, which are claimed by both countries. The rig’s presence has led to clashes and collisions at sea and increasingly angry protests by the Vietnamese government.
As wages have risen in China in recent years, there’s been a shift of labor-intensive manufacturing to countries like Vietnam where wages are significantly lower. While China’s economic boom was once built on providing cheap manufacturing for Western companies, Chinese manufacturers have increasingly been moving their operations to Southeast Asian countries including Vietnam. Wages have been rising amid the country’s economic boom, but at about $100 a month, the average unskilled Vietnamese makes about a third of what a similar worker makes in China.
Chinese investors poured $2.3 billion into the country last year and despite political tensions, China remains Vietnam’s largest trading partner.
Labor rights groups have criticized working conditions and low wages in Vietnam’s factories and the country’s official trade unions, which are controlled by the ruling Communist Party, are generally fairly nonconfrontational, though wildcat strikes are becoming increasingly common.
Given that the crowds in Vietnam seem motivated both by anger at the factories themselves and at the Chinese government’s territorial ambitions, it’s possible that we could start to see cases in which Chinese foreign policy begins affecting the bottom line for Chinese businesses. Though in this case, countries that are entirely uninvolved in China and Vietnam’s maritime dispute are also a paying a price.