China prohibits businesses from bidding on projects in Vietnam

VietNamNet Bridge – The government of China has issued a decision that temporarily prohibits its state-owned businesses from joining projects in Vietnam, Hong Kong’s South China Morning Post newspaper quoted mainland China sources as saying.

Vietnam, East Sea tensions, bidding mechanism, projects

The newspaper quoted an official working for a state-owned corporation who asked to be anonymous as saying that he received the instruction via phone from the Ministry of Trade.

The other three Chinese corporations, which are executing package deals in Vietnam, have received the same instruction, the source confirmed.

A high ranking official at the bid licensing office of the ministry also confirmed that he heard the instruction, but he did not know how long the ban would be valid.

Xu Liping, a researcher on the relations between China and South East Asian countries at the Chinese Academy of Social Sciences, commented that Beijing is trying to put pressure on the government of Vietnam.

This is a sign showing that China is attempting to play the economy card. However, people still need to wait to see how the playing card shows its effects.

Vietnam-China relations have become tense since the day China unilaterally deployed its oil rig in the Vietnamese exclusive economic zone and continental shelf in early May. Since then, the Chinese protecting the rig have been repeatedly carrying out provocative activities toward Vietnamese fishing boats, thus raising deep concern in the international community.

The spokesperson of the Chinese Ministry of Foreign Affairs has accused Vietnamese ships of hitting Chinese ships 1,416 times in the area where China deployed its rig.

Commenting about this, Reuters’ readers said the figures declared by China, no matter 1,000, 2000, or 10,000, would have no significance to the international community, because no one believes the declarations.

China has been the largest trade partner of Vietnam since 2004. However, in the two-way trade relations, Vietnam has always been at a disadvantage with the increasingly high excess of Chinese imports over exports to China.

In terms of Chinese direct investment, China, including Hong Kong, now ranks 11th among the countries and territories which have foreign direct investment in Vietnam.

According to the Chinese Business Association, 113 Chinese companies are doing business in Vietnam, mostly in the fields of electricity and chemical production.

Zhang Jie, also a researcher of the Chinese Academy of Social Affairs, thinks that the ban by the Chinese Ministry of Trade would only cause “limited influence” in Vietnam.

China’s economic sanctions cannot be a threat to Vietnam’s economy because of China’s weak power in Vietnam.

In fact, Chinese contractors are now not welcomed in Vietnam after local newspapers discovered that many projects executed by Chinese contractors have low quality. The projects fell into disrepair quickly just after a short period of use.

Vietnamese experts have urged the government to amend the Bidding Law and set up new provisions that prevent low-quality technologies and incapable contractors from winning bids to implement projects in Vietnam. The low-quality technologies and incapable contractors are understood as technologies from China and Chinese contractors.

Zhang also thinks that that even if Chinese contractors join bids, they will not have the opportunity to win the bids.


Vietnam, East Sea tensions, bidding mechanism, projects