Vietnam offers help to riot-hit companies

Staff Writer
Columbus CEO

HANOI, Vietnam (AP) — Vietnam has offered tax breaks for companies whose factories were damaged or destroyed during anti-Chinese riots last week.

The move shows Hanoi in damage control mode and trying to limit the fallout from the rioting, which dented Vietnam's 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.

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.

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.