VZCZCXRO3520
PP RUEHCN RUEHDT RUEHGH RUEHPB RUEHVC
DE RUEHHM #0622/01 1640651
ZNR UUUUU ZZH
P 130651Z JUN 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC PRIORITY 2732
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 1953
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 2931

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000622 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SOCI ECON CH VM
SUBJECT: ETHNIC CHINESE IN SOUTHERN VIETNAM: A PRIMER 
 
HO CHI MIN 00000622  001.2 OF 003 
 
 
¶1. (SBU) Summary:  The ethnic Chinese community is Vietnam's 
most influential and affluent minority group.  Accounting for no 
more than two percent of Vietnam's population, the ethnic 
Chinese -- concentrated in HCMC and the Mekong Delta -- are 
responsible for generating roughly 10 percent of the nation's 
output.  Although powerful economically, ethnic Chinese shun 
politics and government, preferring to exert influence 
behind-the-scenes by building relationships with key government 
and Party bosses.  The ethnic Chinese have relative autonomy and 
are allowed to run Chinese-language schools and their own 
linguistic, social and cultural organizations.  Vietnam's ethnic 
Chinese are well plugged into both regional and world-wide 
ethnic Chinese business networks.  Having suffered an 
anti-Chinese backlash during Vietnam's 1979 war with China, the 
ethnic Chinese community remains very sensitive about 
advertising any strong links to the PRC.  End Summary. 
 
Vietnam's Ethnic Chinese 
------------------------ 
 
¶2. (SBU) The 1999 census put the number of ethnic Chinese or 
"Hoa Viet" in Vietnam at 862,371, representing 1.1 percent of 
the country's population.  This makes the Hoa Viet the sixth 
largest ethnic group in Vietnam.  Over half of the Hoa Viet live 
in HCMC.  Hang Vay Chi, a Hoa Viet businessman and leader of 
HCMC's Cantonese Community, claims the number of ethnic Chinese 
in Vietnam now is about 1.8 million, with over 800,000 in HCMC. 
 Mr. Chi claims the Hoa Viet are underrepresented in the 
official census because many chose not to identify themselves as 
ethnic Chinese due to fears of discrimination. The bulk of 
ethnic Chinese reside in four urban areas of HCMC -- districts 
5, 6, 10 and 11. 
 
¶3. (U) The majority of Vietnam's ethnic Chinese population are 
descendants of people from China's southern coastal provinces 
who settled in central and southern of Vietnam during the 19th 
and early 20th centuries. Other Chinese, mostly from Guangdong 
and Fujian Provinces, settled in Vietnam in the late 1940s in 
the wake of the Chinese Communists' defeat of the Kuomintang on 
the Mainland.  A smaller number of ethnic Chinese from Southeast 
Asia migrated to the Republic of Vietnam between 1945 and 1960 
when anti-Chinese movements flared elsewhere in the region. 
 
¶4. (U) According to researchers of the Southern Institute of 
Social Sciences (SISS), early ethnic Chinese settlers in Vietnam 
coalesced in communities based on dialect and kinship.  These 
groups eventually created community organizations known as 
congregations to coordinate social and business activities.  Hoa 
Viet life still revolves around five primary congregations: 
Fukiens (Fujianese), Hainanese, Cantonese, Teochews 
(Chaozhounese) and Hakkas.  In the Republic of Vietnam, ethnic 
Chinese congregations elected their own leaders, and ran their 
own hospitals, temples and schools.  According to Dr. Tran Hoi 
Sinh, Deputy Director of the GVN-run Institute for Economic 
Research in HCMC, the Hoa-Viet came to dominate the economy of 
the Republic of Vietnam, creating large amounts of capital, 
developing modern industries and establishing a number of joint 
ventures with foreign companies.  The Cantonese from the 
northern and western Guangdong province dominated the restaurant 
and hotels business while the Teochews from southeastern 
Guangdong were involved in food processing, transportation, 
shipping and import/export activities.  Ethnic Chinese 
controlled four of the five largest metallurgical companies in 
Bien Hoa Industrial Park, Vietnam's first Industrial Zone. 
 
Anti-Chinese Backlash 
--------------------- 
 
¶5. (SBU) Of the estimated 1.2 million ethnic Chinese in unified 
Vietnam in 1975, more than 300,000 ethnic Chinese in the north 
and 100,000 in the south fled in the late 1970s.  The ethnic 
Chinese were driven out by a combination of the post-1975 
nationalization of businesses and redistribution of wealth and 
xenophobia triggered by rising tensions with China.  The GVN 
banned the ethnic Chinese social congregations and took over Hoa 
Viet hospitals and schools.  The majority of ethnic Chinese 
businesses and production facilities were turned into 
cooperatives or business groups managed by the State.  The 
exodus was reinforced following the outbreak of war between 
Vietnam and China in 1979 when GVN officials imposed numerous 
unofficial anti-Chinese policies, such as barring Hoa Viet from 
senior positions in government or State-Owned Enterprises.  HCMC 
scholars and contacts in the Chinese community say that most 
resettled in the U.S., Australia, Canada, Taiwan and Hong Kong. 
Very few went to mainland China. 
 
And Better Times 
---------------- 
 
¶6. (SBU) The ethnic Chinese community in HCMC quickly reasserted 
 
HO CHI MIN 00000622  002.2 OF 003 
 
 
itself when the GVN launched its market-based economic reform 
program (Doi Moi) in 1986.  Many resumed trading activities. 
Others set up medium- and large- scale manufacturing 
enterprises, usually with capital from relatives who fled 
overseas after 1975.  Over the past twenty years, local Chinese 
enterprises have become leading players in plastics, textiles 
and garments, shoes and food processing.  Although they only 
make up perhaps 10 percent of the HCMC population, Hoa Viet now 
account for at least 30 percent of HCMC's output, according to 
Dr. Pham Hao Hon, Chairman of the HCMC Business Association and 
former Deputy Director of the HCMC Trade Department.  Key 
Chinese-owned corporations include the Kinh Do consumer foods 
group, Thai Tuan textiles group, Southern Bank, SACOM bank, 
Bitis and Bitas footware companies, Thien Long pen company and 
Minh Long ceramics.  Kinh Do and SACOM bank are among the blue 
chips on the HCMC Stock Exchange.  Many of the other leading 
ethnic Chinese corporations also plan to list on the exchange or 
have entered into deals with foreign venture capital funds. 
 
¶7. (SBU) Similarly, ethnic Chinese congregations began to 
re-emerge after 1986.  Dao Nhieu Linh, Chief of the HCMC 
Committee for Ethnic Chinese Affairs (CECA), the official Party 
agency responsible for oversight of the Chinese community, told 
us that the congregations focus on business promotion and social 
mobilization, preservation of ethnic Chinese culture, and 
operating charities and pagodas. In 1996, the congregations 
formed the Chinese Language Education Sponsorship Association 
(CLESA).  The association is responsible for developing 
curriculum for the 70 dual language (Chinese/Vietnamese) schools 
throughout Vietnam.  The 20 Chinese schools in HCMC serve some 
20,000 students.  Each of the five ethnic Chinese congregations 
has a representative on the CLESA management board.  According 
to Mr. Chi, the congregations are able to work independently of 
the Party's CECA. 
 
Apolitical By Choice 
-------------------- 
 
¶8. (SBU) Mr. Chi and Phan Chanh Duong, Deputy Director General 
of Tan Thuan Processing Zone Development Corp., told us that the 
Hoa Viet do not want to become involved in politics and 
government.  They noted that, despite the Chinese community's 
financial power and position, there is only one Hoa Viet in the 
National Assembly and fewer than 3,000 ethnic Chinese in the 
Communist Party: less than one tenth of one percent of the 
Party's overall membership.  Ethnic Chinese Party members hold 
some senior district-level positions in the HCMC districts which 
they dominate, but overall are minimally represented in city 
government or in the HCMC People's Council (local legislature). 
 
 
¶9. (SBU) Our contacts in the Chinese community tell us that the 
Hoa Viet are much more comfortable exerting influence behind the 
scenes.  They cultivate relationships with People's Committee 
Vice-Chairmen and key Party officials who have influence over 
their fields of business.  Often these relationships are 
strengthened by giving key officials shares in their businesses 
or allowing them to purchase shares at preferential rates.  They 
also donate heavily to the Fatherland Front for its charitable 
and humanitarian assistance drives. 
 
Hoa Viet overseas connections 
------------------------------ 
 
¶10. (U) Before 1975, the Hoa Viet had extensive economic and 
cultural ties to ethnic Chinese throughout Southeast Asia and 
participated in conferences and exchanges throughout the region. 
 The Hoa Viet reestablished their overseas economic ties quickly 
once Doi Moi began, particularly with ethnic Chinese in 
Southeast Asia, Taiwan, Australia and Europe, and through 
participation in organizations such as the Overseas Chinese 
Merchants Association. 
 
¶11. (SBU) While the strength of the Hoa Viet's ties with ethnic 
Chinese elsewhere in Southeast Asia is undisputed, there is 
disagreement on the extent of ties between the Hoa Viet 
community and Mainland China.  Community representatives 
downplay the extent of the relationship, noting that there are 
few family connections in their ancestral homeland.  They also 
noted that the Hoa Viet fear provoking GVN suspicion by 
cultivating strong ties with Beijing.  However, the Head of the 
Party's Committee for Ethnic Chinese Affairs in HCMC told us 
that family, cultural and business relationships between the Hoa 
Viet and the PRC is very strong.  She said a number of Hoa Viet 
families are sending their children to live with relatives in 
Mainland China to attend schools and Chinese officials and 
exchange groups are meeting with the HCMC ethnic Chinese 
community virtually on a monthly basis. 
 
China's View 
 
HO CHI MIN 00000622  003.2 OF 003 
 
 
------------ 
 
¶12. (SBU) In a recent meeting with ConGenOff, the Chinese Consul 
General in HCMC, Xu Mingliang, said  that ethnic Chinese, 
particularly the Teochews, are the richest people in Southern 
Vietnam despite "experiencing serious prejudice from the 
Vietnamese authorities." (Note: Xu is Teochew.  End Note.)  He 
stated that the ethnic Chinese in southern Vietnam, particularly 
the Teochews, have been delighted to receive him and voiced 
their intention to maintain close ties with the Chinese 
Consulate General in HCMC.  He also noted that Vietnamese 
authorities are quick to remind PRC officials that the ethnic 
Chinese in Vietnam are Vietnamese nationals and that they should 
not refer to them as "Chinese" or "overseas Chinese."  Xu also 
indicated that the PRC is comfortable with the friendly 
relations that most influential Hoa Viet have with Taiwanese 
businesses and officials.  (Comment:  The Hoa Viet, like other 
overseas Chinese communities, are in many respects a bridge 
between the PRC and Taiwan on "neutral ground." End Comment.) 
 
Integration and Assimilation 
------------------------------ 
 
¶13. (U) Professor Phan An of the Southern Institute of Social 
Sciences (SISS) said nearly all literate ethnic Chinese youths 
can speak and read Vietnamese fluently while only half of them 
have good command of Chinese.  Over 35 percent of Hoa Viet 
between 16 and 30 are married to a non-ethnic Chinese and 
roughly a quarter of ethnic Chinese children have an ethnic 
Vietnamese parent.  SISS researchers say that rates of 
inter-marriage are higher in the Mekong Delta, where ethnic 
Chinese marry both ethnic Vietnamese and ethnic Khmer.  SISS 
data also shows that about seven percent of unmarried ethnic 
Chinese between 16 and 30 have told researchers that they want 
to marry an ethnic Vietnamese; another 65 percent say that they 
would be open to marrying a non-ethnic Chinese.   According to 
SISS researchers, the 16-30 generation of Vietnam's ethnic 
Chinese is better integrated and recognizes Vietnam as its 
homeland. 
 
Comment 
------- 
 
¶14.  (SBU) Vietnam's ethnic Chinese will continue to ride high 
on the nation's economic expansion but will remain poorly 
integrated socially and politically.  In part, this is by 
choice: the ethnic Chinese community is focused on preserving 
its separate linguistic, cultural and organizational identity, 
and there is little cross-fertilization between Chinese and 
Vietnamese businesses.  The Hoa Viet community remembers the 
anti-Chinese backlash in the late 1970s, and is sensitive to 
being overtly seen as too powerful or too influential.  And 
despite the claims to the contrary from government and Party 
officials, many Vietnamese still suspect the ethnic Chinese 
community of having split loyalties.  End Comment. 
WINNICK