2 - The position of the Chinese in key economic sectors of South Vietnam before 1975

Summary

In Chapter 1, it was established that before the French colonial period, the ethnic Chinese community already played an active and significant role in several sectors of Vietnam's economy, for example, trade, mining, and handicraft. The French colonial period brought die beginnings of a modern capitalist economy, and how the Chinese business community adapted to this new challenge and expanded their role in it were to have a long-lasting effect right into the independence years. This chapter will look at the extent to which the Chinese have established themselves in the economy as a whole and in the individual economic sectors of the country during the years of the French, and thereafter in the Republic of Vietnam (ROV) in the South after the country was partitioned in 1954. No attempt is made here to look at the economic role of die Chinese in the Democratic Republic of Vietnam (DRV) in the North for two reasons. Firstly, the ethnic Chinese community was not that large in die North and secondly, after 1954 the DRV started to establish a centralized economy which eventually so marginalized private capital, whether of Vietnamese, ethnic Chinese, or foreign ownership, that it became irrelevant.

A common factor ran through the shifting patterns of the ethnic Chinese community's participation in the economy. That was the shaping force of die politics of whichever regime was in power. Starting with the French colonial period, Chinese enterprises engaged themselves mainly in commerce and a few processing industries such as the milling of rice. They refrained from investing heavily in other industries because the French excluded local and other foreigners (Chinese) from die industrial sector. It was not till after the Nanjing Agreement between France and China on 16 March 1930 that die Chinese in Vietnam got their right to participate in foreign trade and industrial activities.