A non-confidence vote in Vietnam's investment environment

Chinese ships arrived in Vietnam on Monday to evacuate thousands of its nationals from the Southeast Asian country after two Chinese were killed and more than 100 others injured last week in anti-China violence unchecked by Hanoi.

The evacuation is an emergency response to the worsened security situation in Vietnam and a non-confidence vote in Vietnam's investment environment.

For the Vietnamese government, its failure or inaction to prevent such tragedy can only tarnish its image as a favorable destination for international investment and tourism, which could bring about severe consequences for its own economy.

The deadly attacks and social unrest disrupted the normal operations of foreign-invested companies and undermined the confidence of not only Chinese investors, but outside investors too.

Among the Chinese nationals evacuated, many are from China 19th Metallurgical Corporation, a contractor of an iron and steel complex badly hit by the violence.

The steel plant in Vietnam's central Ha Tinh province, owned by the Formosa Plastics Group of Taiwan, is expected to be Southeast Asia's largest steel-making facility when completed in 2017, but it is now doubtful whether the deadline will be met.

Besides Chinese companies, a large number of South Korean, Japanese and Singaporean plants also fell prey to Vietnamese mobs, with their factories forced to shut down.

Such a tough situation will certainly prompt foreign investors to have second thoughts about or recalculate the risks of doing business in Vietnam -- a country whose fast-growing economy is thirsty for foreign capital.

China, holding sufficient economic leverage over Hanoi to protect its legitimate interests, has so far exercised maximum restraint and hasn't announced any retaliation, but it did advise its nationals against travelling to Vietnam due to safety concerns and suspended part of its bilateral exchange plans with Hanoi.

Official figures showed Chinese tourists paid 1.8 million visits to Vietnam last year, giving a significant boost to the Vietnamese economy.

And now, despite Vietnamese tourism authority's pledge to ensure the safety of foreign guests, Chinese tourists are canceling planned trips.

It is worth noting that any mishandling of the anti-China protests and the territorial disputes behind would sacrifice Hanoi's ties with Beijing, which have been generally stable in recent years.

It is advisable for the Vietnamese government to think of the bigger picture and not to get stuck in extreme nationalism so as to avoid escalation of violence and complication of the situation in the South China Sea.

By immediately stopping the violence and any further provocations, Vietnam can work with China to tap the full potential of their economic cooperation in such areas as financial services and industry transfer.

It would also help Vietnam regain its reputation as a stable and friendly country for foreign investors and tourists, rather than a place with violence ready to burst forth anytime.