Vietnam has rejected the proposal by the Formosa Plastics Group from China's Taiwan for the establishment of a special steel economic region, local media reported Wednesday.
Vietnam did not agree to the proposal because the current law in the country had no regulation on giving investors a special mechanism for attracting more investment, said Nguyen Van Nen, head of the Office of the Vietnamese government, at a press briefing Tuesday, local online newspaper Dan Tri (Knowledge for People) reported.
The Taiwanese company's proposal came after it sustained the heaviest loss in a series of riots against foreign companies in southern and central Vietnam in mid May, which left four Chinese nationals brutally killed, around 20 foreign factories burned down and some 1,100 foreign companies affected.
In response to Formosa's proposal to Vietnamese Deputy Prime Minister Hoang Trung Hai in June, Vietnamese Minister of Planning and Investment Bui Quang Vinh said Tuesday that the ministry did not agree with the company.
Since the Taiwanese company demanded in the proposal the economic region be managed by a management board under the Vietnamese government office and related ministries, Vinh's ministry stated that the current management board of the Vung Ang Economic Zone is a state-run agency responsible for dealing with the implementation of the Formosa project. Therefore "there has been no need to establish a special steel economic region in Vung Ang."
The Formosa-invested project licensed in 2008 aims to build a steel factory with a closed production line and the largest deep- water port in Southeast Asia within a land lease duration of 70 years.