1. Socialist transformation of the southern economy and the decline of Chinese business

After the collapse of the Republic of Vietnam (ROV) regime in Saigon (30 April 1975), the socialist government of a united Vietnam embarked on a programme to transform the capitalist economy of the South from one based on the market principle to a centrally planned one. An ideological requirement of this exercise would be the removal of a wealthy class of people at the top and the redistribution of their wealth. That being the case, the prosperous business community of the entire South, whether Vietnamese or ethnic Chinese, were affected. However, the Chinese suffered more because of their disproportionately high involvement in business. The effort to convert the southern economy proceeded in stages in this order: the anti-compradore bourgeoisie movement and first currency reform in late 1975, and then the socialist transformation of private capitalist industry and trade, accompanied by another currency reform in 1978.

a. The anti-compradore bourgeoisie movement and first currency reform in September 1975

One of the first things the Hanoi government did after liberating the South was to start eliminating the compradore bourgeoisie. “Compradore” bourgeoisie (from the Portuguese word for “buyer”) was the formal communist term for those local agents acting on behalf of foreign capitalists and who had made money through playing such an economic role. In the context of Vietnam, the southern compradore bourgeoisie were said to be big businessmen who were “reactionary in politics”, who colluded with imperialism and the Saigon regime. This was a political criterion to define that class. There was also an economic criterion which typified compradore bourgeoisie as people who made their fortunes in contract work or commerce in support of the U.S. and Saigon administrations. They were also guilty of using their economic clout to establish monopoly control over markets. They were regarded as an “instrument of the U.S. imperialists for carrying out their neocolonialist policy” and as the “principal social basis” of the Saigon regime “which in turn relied on it to grow rich”.