Frequent Strikes, Soaring Prices And Investment In Vietnam Need Caution

Under the plight of frequent strikes and low productivity, economic difficulties such as soaring prices and continued devaluation of the Vietnamese shield have made the manufacturing industry worse.

The strike, which erupted at the end of the year, was brought to the front by now, all because of the economic recession caused by inflation and stock market crash.

The coffee shop on the street in Vietnam is always full of people.

Although the local people's income is not high, the catering business is very popular.

This kind of "Romance" is regarded as laziness by Taiwanese businessmen. It is said that the efficiency of Vietnamese workers is only 60% of that in the mainland of China.

On the streets of Hu Zhiming City, there is a great army of motorcycles.

Traffic backwardness is one of the bottlenecks restricting the development of Vietnam's manufacturing industry.

Compared with the beginning of the year, the price of rice rose from 9000 shield / kilogram to 13000 now / 13000 kilograms, and the pork increased from 60 thousand shield / kg to 77 thousand shield / kg.

Compared with the same period last year, consumer goods prices generally rose by 5% to 33%, and prices rose more than 25% in May this year, exceeding the level of GDP growth.

Since 2002, the wages of Vietnamese workers have increased by about 15% per year, while in 2006 the 40%. monsoon has not risen according to the season, which makes the monsoon countries Vietnam very uncomfortable.

"By the end of 2007, we had already raised wages before the new wage standard came out, but we have to increase 10% to 20%. in the near future." in June 8th, Jiang Yaoting, general manager of Vietnam Jingyang Co., said, "moreover, not only are foreign workers going on strike, but domestic workers are also on strike.

Because prices are rising too much. "

In recent years, Vietnam has become a darling of international capital, and the Vietnamese government has also implemented the ultra conventional development route. It looks forward to integrating into the global community as soon as possible: formulating many preferential policies to attract foreign investment, further opening up the financial market and accelerating capital liberalization.

From 2000 to 2007, the average annual growth rate of Vietnam's economy reached 7.5%, second only to China, ranking second in the world.

But with the overheating of the economy, the huge foreign trade deficit, the continued depreciation of the shield this year, the global inflation caused by the oil price rise, and the worsening stock market crash and so on.

Foreign investment companies have complained about Vietnam's investment environment, and now they are adding more economic pressure.

Jiang Yaoting said with great reluctantly, "do less and lose less.

Now, orders are not always a good thing.

Now, not more than money, but endurance.

We must be patient and let it go. "

Prices rose and wages rose. The price of spare parts increased by 40% compared with March, and some small suppliers began to fail. Since 2002, the wages of Vietnamese workers have increased by about 15% per year, while 2006 has increased by 40% compared with 2005. Foreign enterprises have changed the fate of HUYNHMINHLUC, otherwise, he may help people to fish in the sea.

He came to the economically developed Hu Zhiming city from Qinghua Province, central Vietnam. Although the distance between them is only 500 kilometers, it is only two days before they arrive.

At present, Vietnam does not have a highway that meets international standards, and the speed of railway pportation is not enough.

And the construction of infrastructure such as electricity, telecommunications, ports and so on, are far behind the fast running economic train in Vietnam.

On the streets of Hu Zhiming, this banner is written in Vietnamese characters, "please obey traffic rules and promote economic development".

It can be seen that the Vietnamese government has recognized the seriousness of this problem.

In March 12th, Hu Zhiming announced the pportation development plan to 2020. By 2020, Hu Zhiming will invest 410 trillion shield (about 25 billion 900 million US dollars, according to March March exchange rate, the same below), and build 6 high flow expressways, 4 elevated roads, 22 bridges and other infrastructure.

HUYNHMINHLUC's sister-in-law is the manager of Huafeng Shoes Co., Ltd. (hereinafter referred to as "Huafeng"), so he came here to work after he retired from the army.

This is a Taiwanese funded enterprise. There are also factories in Zengcheng, Guangzhou, China.

Now, he gets 1 million 200 thousand yuan a month (about 85 dollars).

In the old home, because factories are few, it is hard to find such a job, and even if there is work, more efforts must be made to get such a salary.

Even in Hu Zhiming, a city with a higher level of consumption, his income is much higher than that of domestic enterprises.

In Vietnam, the wages of domestic employees are only 1/3 of foreign capital.

But from the afternoon of March 12th, HUYNHMINHLUC responded to the call of the workers, and the four thousand or five thousand men went on strike, demanding that the company raise wages.

Their reason is that prices are rising faster than wage increases.

Like other countries, Vietnam's prices are soaring as crude oil prices rise.

Among the higher prices of goods, grain and food are the largest, followed by residential and building materials.

This has reduced the standard of living of most people and increased the cost of production.

In June 8th, Jiang revealed that some smaller suppliers began to fail, because the price of spare parts continued to rise, rising by 40% compared with March, and other prices were also the same, for example, the price of rice increased by 1 times.

"If the supplier is supplied by ordinary people and retailers, there is no problem; but if it is supplied to the factory, it will be very troublesome, because the supply to the factory will adopt the way of" monthly knot ", but the supplier's purchase price is high, plus credit, his money will be difficult.

So if factories can't "knot", they will not supply.

Iron, carton and rubber wood are hard to purchase now. "

Jiang Yaoting said.

The closed northern provinces are relatively calm, but the production and sales of motorcycles, automobiles and other bulk commodities have been significantly affected.

House prices will also be greatly affected.

"Many people in the stock market have been locked up, some of them are selling houses or lending stocks, and now the Vietnamese economy is very depressed."

Chen Yaokui, President of the Taiwan chamber of Commerce in northern Vietnam said.

This has also forced the Vietnamese government to adjust the minimum monthly wage standards for Vietnamese workers almost every year.

The new standard implemented in January 1, 2008 is Hanoi and Hu Zhiming. The minimum monthly salary for Vietnamese workers in foreign enterprises is 1 million shield (about 62 US dollars), and the rest area is 50 dollars or 60 dollars.

Li Tianqi, President of the Federation of Taiwan chamber of Commerce in Vietnam, admitted that the wages of Vietnamese workers were very low and should be increased, but the rate of increase was too fast. Since 2002, it has increased by about 15% per year, while in 2006 it has risen by 40%. over 2005. This also makes strikes as popular as plagues, because resistance is effective.

Plague strikes, frequent strikes and low productivity problems are plaguing foreign-funded enterprises. They believe that these are enough to offset the advantage of low land price and low labor cost in Vietnam. As early as January 1st, according to the new standard set by the government, "Huafeng" raised the basic wage of workers to 850 thousand shield (about 425 yuan), which used to be 560 thousand shield.

However, the workers reflected that 1.5 hours of overtime worked 1 times before, and now that the basic wage rises, overtime pay is the same as usual.

Therefore, the actual income of workers is different from that before adjusting wages.

HUYNHMINHLUC lives in a rented house near the factory. A wooden loft is about ten square meters, and not a piece of furniture. He sleeps on the floor.

He lived next door to two women workers, his colleagues, and their furnishings, like him, were also sleeping on the floor.

In fact, although Huafeng did not provide dormitories for male workers, it provided free dormitories for all female workers, paying only 20 thousand yuan per month for water and electricity, about 10 yuan per month.

In the past, women workers lived in dormitories, but they felt more and more free from their friends and relatives. They could not live in dormitories with them.

Gradually, more people moved out.

The room in which HUYNHMINHLUC lives (two people share the rent), the rent is 410 thousand yuan, which is the new price after the government adjusted the minimum monthly salary standard for foreign employees in January 1st this year.

Before, the rent was 310 thousand yuan.

"Huafeng" provides a free lunch for workers, and provides free meals if they work overtime.

Therefore, HUYNHMINHLUC costs 5000 yuan per day for breakfast, 8000 yuan for dinner, 390 thousand yuan for a month, 8000 yuan for fruit and coffee per month, about 200 thousand yuan, and about 400 thousand yuan extra.

If he meets a friend on his birthday or gets married, he will not be able to save so much money.

So the workers asked the factory to really raise salaries.

"No compromise!"

"If you compromise this time, you may strike another day," said Xu Guangzhong, the top manager of the long term Vietnam.

In particular, unreasonable demands can also be resolved because of strikes, which will have a great impact on the future.

His deputy Dan Wenxiong said that their insistence is also responsible for the nearby factories, because "we compromise, other factories will follow suit".

In southern Vietnam, several factories often strike together, or several industrial zones strike at the same time, or even strike in several provinces.

Frequent strikes and low productivity problems are plaguing foreign-funded enterprises. They believe that these are enough to offset Vietnam's low land price and low labor cost.

In recent years, the plant has gone through 3 strikes.

Li Tianqi has arrived in Vietnam since 1989.

He said the strike began in 2005, and strikes were like plagues, which broke out every year.

"Because Vietnam's wages are the lowest in Southeast Asia, in addition, the industrial zone is growing at a fast pace, and there are more and more investment enterprises. One is bigger than one, and the workers are limited. Moreover, in order to balance regional differences and increase investment in the central and northern part of the country, many northern workers are no longer coming back."

Li Tianqi said.

In the past, Huafeng employees accounted for 1/3 in the north, central and southern parts of the country, but this year, workers in the North almost never came back.

According to the actual capacity, Vietnam Jingyang limited needs 1800 workers, but now there are only 1200.

Workers are tight, and strikes will increase.

In March 12th, more than 4000 workers were on strike in Huafeng, and more than 200 workers were on strike on the same day in the VinaInah company of the new Shun export processing zone in Hu Zhiming.

And in the Longan province near Hu Zhiming, as of March 10th, 24 workers strike this year, close to the strike in 2007 of the province (a total of 26 in 2007).

All strikes call for increased revenue.

The difference between Vietnam and foreign governments in respect of domestic and foreign enterprises has made many foreign investors operate in the form of domestic joint venture to avoid these unreasonable regulations and systems. In March 14th, the third day of the strike, Huafeng posted a notice to require employees to resume work.

But on the second day, a few people do not allow most people to work.

In March 17th, some people refused to let others work.

Xu Guangzhong believes that in Vietnam, it is easy to organize a strike.

"Managers are Chinese and do not understand Vietnamese language, so workers can organize strikes in the workshop.

And if only a few people can organize it, everyone else will follow it blindly. "

"Vietnam has strong trade unions, every factory has trade unions, and there are government organizations that manage trade unions.

As long as trade unions are inclined to the interests of employees, the government looks back on the idea of avoiding trade unions.

Most trade unions protect workers' interests. "

Xu Guangzhong said.

The Vietnamese government has strict regulations on strike, such as application, approval, and strike.

But workers do not act according to law.

Moreover, only the judiciary can decide whether the strike is legal or not.

When the workers were on strike, the local government sent people to the scene, but they did not discourage them.

"The government believes that as long as workers do not destroy, they will not dissuade them. They think strike is the right of workers."

Xu Guangzhong said.

Li Tianqi believes that the central government does not want foreign businesses.