Chinese acquisition of prime land worries Vietnam defense ministry

Between 2011 and 2015, Chinese individuals and businesses bought 135 pieces of land in Da Nang, the central coastal city, the ministry has said in a recent letter responding to voters enquiring about a reported increasing trend of Chinese people investing in prime Vietnamese land.

The purchased land lots are located along seaside residential areas in Ngu Hanh Son and Son Tra Districts, as well as around the Nuoc Man Airbase, which was used as a military airport by the U.S. during the Vietnam War and is now deployed as a fuel warehouse.

Chinese national Liang Zhipei, 45, head of the construction supervision team at the Silver Shores Investment Development Company, Ltd., and Taiwanese national Chiu Chen Tai, deputy director of Pu Fong Trading and Service Co. Ltd, used Vietnamese locals to acquire 84 plots measuring 20,000 square meters and costing more than VND100 billion ($4,300).

The Silver Shores company has also invested in a series of multi-storied hotels in Da Nang.

Apart from the two individuals, seven private limited companies with Chinese investment - Nguyen Thinh Vuong Trading Travel and Service; Silver Park Tourist, Trade & Service; Silver Sea Trieu Nghiep; Hoang Gia Trung Tourist, Trade & Services; Golden Wynn Da Nang; V.N. Holiday Trading Travel & Service; and Silver Shores Hoang Dat, have acquired 51 plots in different prime locations of Da Nang.

Of these, Da Nang had leased out 200,000 square meters to Silver Shores Hoang Dat for 50 years until June 21, 2056, and on March 21, 2017, the city granted a certificate of land use right to this firm.

Vietnamese front

In order to get their hands on prime land in Da Nang, the Chinese established joint ventures with Vietnamese partners, with the latter supposedly contributing the land as their capital.

At first, the Chinese investors contributed smaller capital, and via different methods, they gradually increased their capital contribution to the point of earning the right to operate the business and eventually owning it, along with the plot of land, the ministry said.

Another path that the Chinese have taken to acquire land in Da Nang is giving Vietnamese citizens, ethnic Chinese in most cases, to buy the land. Authorities have recorded several cases in which the buyers clearly do not have the financial capability, but are official owners of 10 to 12 land lots at prime locations.

The defense ministry said it was reasonable that voters raise such questions over the Chinese owning land in Vietnam, because in all cases, the Chinese have acquired land on major streets or along the coast, which does not just facilitate business activities but have significant national defense implications.

Legal, but...

In September last year, Da Nang authorities announced that the city had abided by laws in Chinese nationals securing land use rights of 21 plots along the Nuoc Man Airbase.

Of these plots, one is under the name of the Chinese-owned Silver Shores Investment and Development Co. Ltd., which is implementing the Silver Hoang Dat special international tourism and entertainment project. The remaining 20 cases are projects to build mansions along the border of the Nuoc Man Airbase.

In all 21 cases, land use rights certificates had been granted to Vietnamese nationals. However, Chinese nationals used several methods including buying shares and contributing capital to have land use rights transferred to them, according to the municipal Department of Natural Resources and Environment.

The defense ministry said in its letter that these moves by Da Nang City were a matter of concern and that Prime Minister Nguyen Xuan Phuc has assigned related agencies to clarify the acquisition.

Not just Da Nang

The trend of Chinese people acquiring prime land is not confined to Da Nang.

By the end of last year, 149 companies with Chinese investments were operating in border areas of 22 cities and provinces across Vietnam, including 24 along the land border and 125 along the sea border.

These companies have a total investment capital of almost $31 billion.

All the companies were established before December 2018 and operate in diverse fields including hospitality, restaurant, tourism, entertainment, garment, aquaculture, leather shoes, packaging, children's toys, and electronics components.

They are using a total of 4,239 Chinese employees, of whom 3,865 are working in coastal companies.

The ministry said while these companies have basically followed the regulations in Vietnam, they have been instances of bringing Chinese workers into Vietnam as tourists and using their work without reporting it to the authorities.

Meanwhile, several companies have hidden themselves behind the cover of a Vietnamese firm. This means that the firm is legally Vietnamese, but its owners, operators and managers are all Chinese.

In some cases, some firms have been found disguising themselves as normal companies to commit hi-tech crimes and even producing and/or trading in narcotics. Other firms have evaded taxes and caused severe environmental pollution.

So far, authorities have handled a number of cases involving Chinese companies, including three cases in which 63 Chinese laborers failed to declare temporary residence, three with 87 Chinese laborers having no work permits, and one involving 285 Chinese workers clashing with Vietnamese workers.

Review the projects

The ministry said it has suggested that the government directs ministries, departments and localities to review the evaluation of foreign investment projects, especially those related to China in border and coastal areas of strategic importance for national defense and security.

The review should enable related agencies to detect shortcomings and loopholes to make needed adjustments to the Law on Investment and the Land Law, it added.

Vietnam allows foreigners to buy property except land, but not more than 30 percent of a residential quarter or an apartment project, as long as the project is not located in areas deemed vital to national security.

The government said last year that it will crack down on locals acting as proxies for foreigners to buy land.

The move came after lawmakers at the National Assembly session in May last year expressed concern over Vietnamese acquiring property in their name for foreigners.