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Last updated: Thursday, September 21, 2017

 

Interpreting the Appeal of Chu Lai Open Economic Zone

Posted: Friday, June 16, 2017


Without much difference in mechanisms and policies from other ordinary economic and industrial zones, Chu Lai Open Economic Zone has become a destination for hundreds of investment projects in the past years, created breakthroughs in industrial development in Quang Nam province in particular and in the whole country in general, and provided strong momentum and launch-pads to accelerate the cause of industrialisation and modernisation of the province. So, what factors make Chu Lai Open Economic Zone so appealing to investors?

Convergence of advantages
Chu Lai has a strategically important position in central Vietnam. It lies in the middle of Vietnam, with one side being a long coast and another side being a vast expanse of land. It has a convenient traffic system interconnected with other localities of Vietnam and the world via National Highway 1A, national coastal road, trans-Vietnam railway, seaway through Ky Ha Port, airway through Chu Lai Airport, and blueprint Da Nang-Quang Ngai Expressway. In addition, Quang Nam province has an abundant young, industrious and quick-minded labour force.

To facilitate the development of Chu Lai Open Economic Zone, Quang Nam province has paid special attention to investing in completion of technical infrastructure system. In Chu Lai Open Economic Zone and coastal areas (east of Thang Binh and Duy Xuyen districts), some essential infrastructure works have been built to connect Quang Nam with other parts of the nation and the world like upgrading Ky Ha Port for ships of 10,000-20,000 tonnes, restoring Chu Lai Airport, building a road linking Tam Hiep Port to expressways. In addition, overland roads interlinking other localities in Quang Nam have also been invested, for example, Cua Dai Bridge, a coastal road from Hoi An to Tam Ky (phase 1), and trunk roads in five industrial zones. Urban resettlement areas with adequate traffic, power, water and communication infrastructure systems are assured sufficient for displaced households. Infrastructure in four industrial zones, tourist sites, water supply facilities, central hospitals and vocational schools has also been invested for construction.

With the synchronous infrastructure system, the effort to bring peculiar special advantages into full play together with the dynamism and creativity of Quang Nam provincial government, the Chu Lai Open Economic Zone Authority has continuously introduced new appropriate strategies, stuck to decided strategies, waited for the opportunity, taken the initiative in development thinking with a daring spirit to create new momentum and new driving forces to quickly make Chu Lai Open Economic Zone a new attractive destination to investors. As of December 20, 2016, Chu Lai Open Economic Zone had 118 licensed projects with total investment capital of US$2,159 million (including 32 FDI projects with US$1,069.734 million), of which 74 projects came into operation with US$922.897 million of registered capital disbursed. In 2016 alone, 14 projects were licensed with a total registered capital of VND2,216.9 billion (US$105 million), including six FDI projects.

At present, the open economic zone is employing about 20,295 labourers, mainly working for garment, textile and dyeing companies in Tam Thang Industrial Park (3,500 people) and Truong Hai Automobile Manufacturing and Assembly Complex (8,778 people). Some sectors in the economic zone have created key industrial products such as automobiles, construction glass and electronic products, facilitating economic restructuring and contributing significantly to the overall development of Quang Nam and the central key economic region, especially Truong Hai Automobile Manufacturing and Assembly Complex, which has made important contributions to the development of Vietnamese automotive engineering industry and joined global value chains.

Attentive support, attractive incentives
Together with advantages of geographic location, natural resources, human resources and complete technical infrastructure system, Chu Lai Open Economic Zone strongly draws investors because of attractive investment support and incentives. With its determination for better investment attraction efficiency, Chu Lai Open Economic Zone always welcomes investors with a lot of investment incentives and active support for investors. Specially, on April 21, 2014, Quang Nam People's Committee issued Decision 08/2014/QD-UBND on preferential policy and investment support in Chu Lai Open Economic Zone. Accordingly, in addition to preferential policies stipulated by the Government of Vietnam, when investing in Chu Lai Open Economic Zone, domestic and foreign investors are entitled to preferential tax policies (corporate income tax, import, export tax, duty in non-tariff area) and land incentives.

In addition, the Provincial People’s Committee has paid much attention to assisting investors like supporting shared infrastructure, supporting construction of worker houses, supporting vocational training for displaced people in project areas, supporting land compensation and clearance, supporting product advertising and introduction. Among them, the most important and practical content is the support for settlement of administrative procedures. Accordingly, the open economic zone has applied the one-stop single-window mechanism to investment and business administrative procedures issued by the Quang Nam Provincial People’s Committee. The Chu Lai Open Economic Zone Authority is an agency that receives, solves and coordinates in settlement of procedures related to project investment when projects are deployed in the open economic zone, including business establishment, investment registration and environmental impact assessment. Investors do not have to pay any service fees in the process of settling investment procedures in Chu Lai Open Economic Zone, except for fees provided by the State. Relevant authorities in the province are responsible for coordinating with the Chu Lai Open Economic Zone Authority to promptly solve investment administrative procedures in the open economic zone upon the request of lead agencies or investors.

Ripple effects
Under the construction and development orientation, Chu Lai Open Economic Zone must be a dynamic development area and an industrial-urban-tourism-coastal service centre of the province. It will focus on developing six groups of Southeast economy project programme tied with strategic investors: Nam Hoi An urban-tourism zone project group; automobile industry and automobile supporting industry centre project group; garment and textile industry and garment and textile supporting industry group tied with Tam Ky urban zone development; industrial and service development project group tied with Chu Lai Airport; oil-electricity project group and energy-used industries; and fishing port, mooring site and storm sheltering system project group. These six key project groups will be deployed on a total land area if more than 10,000 ha spreading across the east of four districts and cities of Duy Xuyen, Thang Binh, Tam Ky and Nui Thanh. These localities will become economic growth engines of these localities in particular and of Quang Nam province in general.

By defining focused areas and key projects, selecting breakthroughs and taking appropriate steps to create growth drivers, Chu Lai Open Economic Zone has attracted many powerful domestic and international investment such as Chow Tai Fook (Hong Kong); SunCity (Macau); VinaCapital, Panko, Korea Textile Trade Association, Mazda (Japan); Hyundai (South Korea), Peugeot (France) and ExxonMobil (US). The picture of lively investment in the open economic zone has created a new driving force and promised the formation of a vibrant market development in the potential land of central Vietnam.

Grasping this great opportunity, Chu Lai Open Economic Zone is concentrating on clearing land, creating clean land fund, and investing in synchronous infrastructure development. It is focusing on developing coastal roads from Hoi An City to Chu Lai Airport, connecting National Highway 1A and Da Nang-Dung Quat Highway, upgrading Chu Lai Airport infrastructure, dredging passageways into Ky Ha Seaport and expanding piers to accommodate ships of over 30,000 tonnes. In addition, Chu Lai Open Economic Zone is training and preparing human resources and improving the investment environment for enterprises.

Thanh Tung








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