In a workshop on doing business in Vietnam, Theodore Huang, chairman of the Taipei-based Chinese National Association of Industry and Commerce, said the growing number of strikes in Vietnam is an even more serious problem than the country's anemic economy, and urged authorities to deal with the issue.

"The economy is not a big problem in Vietnam, as foreign capital will soon arrive. The real difficulty lies in the tide of strikes, " Huang said.

According to local media reports, about 300 strikes have been staged in Vietnam to date this year because of inflation and low wages. The frequency of the labor actions has even led to bankruptcies among Taiwanese-invested firms.

The stakes are high for Taiwan, the third largest investor in the country after South Korea and Singapore according to Bureau of Foreign Trade statistics.

Huang said that up to February this year, Taiwanese businesses had registered 1,817 investment projects in Vietnam worth more than US$10 billion and is one of the country's biggest trading partners.

Huang, who himself has investments in Vietnam, said the country offers many advantages to foreign investors, such as a large and diligent workforce, a large land area and many harbors.

To avoid the strikes that are plaguing some foreign-invested facilities, Huang advised companies there to sign a clear contract with employees and set up a complaint channel to deal with problems before they explode.

If workers still go on strike, however, the local government must impose its authority to deal with the problem, he contended.

In response, Nguyen Ba Cu, director of the Vietnam Economic and Cultural Office in Taipei, argued that Vietnam is still a good place to invest, and said his government has adopted eight important measures to improve the country's investment environment.

They include a tighter monetary policy, a better market monitoring system and more concentrated development of the manufacturing, agricultural and service sectors.