State firms barred from Vietnam contract bids

The government has temporarily stopped state-owned companies from bidding for fresh contracts in Vietnam, several sources familiar with the matter said, as the two countries are embroiled in an increasingly bitter dispute over territorial claims in the South China Sea.

An official working at a state-owned enterprise, who asked not to be named, said the group had been informed of the move on the phone by the Ministry of Commerce.

Three other Chinese contractors operating in Vietnam have also been told, sources with the firms said.

A member of staff working at the ministry's bidding permit office confirmed the suspension, but said it was not known how long the ban might last.

China's economic and commercial counsellor in Vietnam, Xu Qisong, decined to comment.

Xu Liping , an expert on China's relations in Southeast Asia at the National Institute of International Strategy at the Chinese Academy of Social Sciences, said Beijing may be trying to put economic pressure on Vietnam's government.