With Sino-Vietnamese relations at their lowest in November 1978, the exodus of Hoa-Chinese from the north and the south of Vietnam had reached an all-time high. After suffering under persecution from the Vietnamese government from as early as April 1978, particularly in the southern city of , Hoa communities fleeing Vietnam numbered in the 100,000s.
Following Vietnam’s break with China and the development of closer ties with the Soviet Union in June, some Vietnamese leaders evidently feared the potential for espionage activities within the Chinese business community. Chinese-owned businesses controlled trade in a number of goods and services, such as pharmaceuticals, fertilizer distribution, grain milling and foreign-currency exchange, that were supposed to be state monopolies. These were largely repossessed by the Vietnam government after laws were passed in April banning Chinese entrepreneurship. Further government policies later in the year forced former owners to become farmers in the countryside or join the armed forces and fight on the Vietnam-Cambodia border.
China’s attempt to close its land border with Vietnam in order to stem the increasing tide of refugees did nothing but increase the amount of Hoa-Chinese wishing to leave Vietnam. However, by November 1978, the Vietnamese government not only encouraged the exodus but took the opportunity to profit from it by extorting a price of five to ten taels of gold or an equivalent of $1,500 to $3,000 US dollars per person wishing to leave the country. The Vietnamese military also forcibly drove thousands of border refugees across the China-Vietnam land border, causing numerous border incidents and armed clashes, while blaming these movements on Chinese saboteurs. This new influx brought the number of refugees in China to around 200,000.[