"DONG NAI ROUNDUP" ILLUSTRATES COMPLEXITIES OF CHINESE LABOR

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000510

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E.O. 12958: N/A
TAGS: ECON ELAB EIND PREL CM VM
SUBJECT: "DONG NAI ROUNDUP" ILLUSTRATES COMPLEXITIES OF CHINESE LABOR
IN VIETNAM

HO CHI MIN 00000510 001.2 OF 002



1. (SBU) SUMMARY. One aspect of the recent bauxite debate sure
to raise the blood pressure of any Vietnamese walking down the
streets of Ho Chi Minh City is the reported strong presence of
foreign -- read Chinese -- laborers, in the projects. Ever
since that debate prompted Prime Minister Nguyen Tan Dung to
order a review of work permits for foreigners, HCMC's newspapers
have been filled with stories of Chinese laborers in jobs the
writers assert could be filled by Vietnamese. Dong Nai
provincial officials say that June 22 media reports of a mass
repatriation of Chinese workers from the province illustrates
that these situations are complicated, with the media
sensationalizing events, and often, with skilled Chinese doing
work that local Vietnamese cannot. But perception may trump
reality. Chinese Consul General Xu Mingliang noted to the
Consul General recently that their "citizen services work load"
in the industrial provinces around HCMC has risen in the last
month, fueled by an uptick in detentions and repatriations.
END SUMMARY.

The Media Takes Stock of Labor
--------------

2. (SBU) In the past few months, the presence of illegal workers
in central and southern Vietnam has become a hot topic with the
HCMC media, and in turn, the provincial Departments of Labor,
Invalids and Social Affairs (DoLISA). Dong Nai, Quang Nam and
Lam Dong provinces were all reported to be major venues for
DoLISA investigations into illegal workers in May and June. As
unease about the impact of the global economic downturn on
Vietnam's economy persists, the press has given increasing
coverage to the presence of illegal labor. Some articles touted
the Prime Minister's call for greater measures to prevent
illegal foreign workers from entering Vietnam, while others
enumerated what conditions must be met in order for a foreigner
to work in Vietnam. More strikingly, other reports highlight
the "social evils" brought by illegal laborers; Vietnam Net
recently posted a video from April of a mob Chinese workers
attacking and beating a local family in Thanh Hoa.

Roundup in Dong Nai Province
--------------

3. (SBU) One story this week tied these economic and nationalist
anxieties together with one neat bow. On June 22, Vietnam Net
reported that Dong Nai DoLISA officials had repatriated illegal
unskilled Chinese workers from Phuoc Khanh commune. A Vietnam
Net reporter described witnessing taxis arriving at the Cong
Thanh cement factory on June 19 to transport 200 Chinese workers
to Tan Son Nhat Airport, adding that a Dong Nai taxi driver
confirmed the same account. One newspaper wrote that nearly
one-third of all foreign workers in Dong Nai are working
illegally. According to another report 1,500 of 7,000 foreign
workers in Dong Nai province are Chinese.

But Really, More Smoke Than Fire
--------------

4. (SBU) While warning she had not read the press reports, Dong
Nai DoLISA Director Ms. Le Thi My Phuong confirmed for the
Consulate that she is aware that a Chinese construction company
that Cong Thanh Cement Company hired to build its cement factory
in Phuoc Khanh commune employs unskilled Chinese workers.
Provincial DoLISA inspectors recently reviewed Cong Thanh
workers' entry visas and temporary residency permits, but issued
work permits only to Chinese laborers who have skills that
couldn't be found locally. She said that the workers have not
been repatriated to China, and that while the company had been
given a warning and workers fined 5 million VND ($275) and told
to return to China, the province doesn't have the legal
authority to compel them. She added that the workers were
brought to Vietnam by a Chinese construction contractor, who had
obtained visas and residence permits, but not working permits,
which are not available for unskilled laborers. Dong Nai police
later clarified that the relevant legal instrument (Decree
113/ND-CP) does not provide provincial officials with the
authority to deport/expel illegal workers.

COMMENT:
--------------

5. (SBU) Most labor experts in Ho Chi Minh City refuse to
believe that contractors could save money by bringing in
unskilled Chinese laborers -- cheap labor from China is more
expensive than cheap labor in Vietnam. But so long as
Vietnamese contractors choose Chinese subcontractors, language
and familiarity likely mean a steady flow of Chinese laborers on

HO CHI MIN 00000510 002.2 OF 002


construction sites in Vietnam. Vietnam walks a thin line here,
since a hostile work environment might scare off the Chinese
engineers, technicians and project managers crucial to a wide
range of energy and infrastructure vital to the country's
future. END COMMENT.


6. (U) This cable was coordinated with Embassy Hanoi.
FAIRFAX