Local Economy

Last updated: Friday, March 22, 2019


Chu Lai Open Economic Zone: Economic Growth Locomotive

Posted: Monday, July 23, 2018

Chu Lai Open Economic Zone is a coastal economic zone established by the Prime Minister on June 5, 2003 and chosen by the Government as one of eight key national economic zones. From a “three-no” open economic zone (no infrastructure, no human resource and no material), after 15 years of ongoing efforts for development, Chu Lai Open Economic Zone has turned an almost uncultivable region to an industrial and service hub and confidently affirmed its position in economic development of Quang Nam province and the region.

Fruit on a poor land
Chu Lai Open Economic Zone has unparalleled competitive advantages to any other localities, industrial zones and economic zones across the country. Particularly on infrastructure, in addition to carrying out Resolution 08-NQ/TU dated April 5, 2012 of the 9th Provincial Party Congress (20th term) on construction of a synchronous and efficient infrastructure system to make Quang Nam a modern industrial province by 2020, Quang Nam province has invested in building 29 works, basically completed 15 projects and mobilised other capital sources for many other important projects to boost the capacity of economic and technical infrastructure and serve development requirements. The ground traffic system links functional areas and the coastal road to Da Nang - Tam Ky and, in the near future, to Nui Thanh, Quang Ngai. Chu Lai Airport has been planned to be an international passenger and cargo airport, thus opening new opportunities for Quang Nam to welcome investors and firmly advance their integration process. Particularly, the seaport system has been upgraded to receive international ships of 20,000 tonnes and to accommodate vessels of 30,000 - 50,000 tonnes soon. In addition to domestic routes, Chu Lai Port has international routes to China, Korea, Singapore, Thailand and Japan.

Since Chu Lai Open Economic Zone was founded, residential, industrial, urban and tourism zones have been established. Many gigantic projects have been located in the economic zone, including Chu Lai Floating Glass Factory, Panko Tam Thang Garment Factory, CCI Electronic Parts Factory, and Vinpearl Nam Hoi An Resort. Especially, Chu Lai - Truong Hai Automotive Complex has helped develop the automotive engineering industry in Vietnam and made some Vietnamese-branded products for global value chains.

Chu Lai Open Economic Zone now has eight industrial parks, including five in operation and three under construction. By the end of March 2018, the economic zone attracted 147 investment projects with a total capital of more than VND85,900 billion (US$4.2 billion), including 89 projects in operation and over US$1.3 billion of registered investment capital disbursed. Particularly, 2017 was seen as an extremely successful year for Chu Lai Open Economic Zone. The Chu Lai Open Economic Zone Authority advised the Provincial People’s Committee to hand investment decisions and sign strategic investment agreements at the Quang Nam Investment Promotion Conference, grant investment licences to 27 projects with over US$2 billion of registered capital, surpassing 667 per cent of the full-year plan of US$300 million, and rising 20 times over the value licensed in 2016. “In the past 14 years, 2017 is the year that the authority attracts most investment projects and value,” said Mr Do Xuan Dien, Director of the Chu Lai Open Economic Zone Authority.

The industrial production value made by tenants in the economic zone increased 45 per cent annually on average (accounting for 57 per cent of the province’s industrial output value in 2016); export value rose 18.5 per cent on average (accounting for 19 per cent of the province’s total). Tenants in Chu Lai Open Economic Zone contributed 75 per cent to the province’s budget revenue in 2016 and 70 per cent in 2017. By the end of 2017, Chu Lai Open Economic Zone provided nearly 23,000 jobs and was expected to generate 24,500 jobs by the end of 2018.

Tenants in Chu Lai Open Economic Zone have made most use of locally available resources such as white sand, quarries, timber and seafood, specially Ca Voi Xanh (Blue Whale) gas field to make glass, paper, building materials and furniture and form industrial factories like Chu Lai Floating Glass Factory, Uc Thinh Vietnam Glass Manufacturing Factory, Plastic Sand Factory, Wood Pellets Production Factory, Hoa Chen Feed Production Factory, Bac Giang Non-baked Premium Brick Production Project, and the project that brings offshore gas ashore to fuel the Central Power Centre and gas-fuelled industries. Some industries have created key industrial products, facilitated local economic restructuring (automobile, construction glass, electronics and apparel), and contributed significantly to the overall development of Quang Nam and the central key economic region. Notably, Chu Lai - Truong Hai Automobile Complex has become a driving force for the development of Vietnam's automobile engineering industry and engaged some products to global value chains.

More open mechanism
Director Dien said, at first, the Politburo advocated piloting special preferential mechanisms and policies with a favourable, open environment appropriate to international standards (possibly offer incentives beyond the current law) but Chu Lai Open Economic Zone only used the highest incentives specified in the law rather than beyond the law. The 15-year development of Chu Lai Open Economic Zone has been made by the province, from asking for mechanism to planning, training and recruitment. Indeed, Chu Lai Open Economic Zone is considered a local economic zone, not sticking to the original intention of the Politburo: Building Chu Lai Open Economic Zone towards international standards and applying international rules.

For that reason, the Chu Lai Open Economic Zone Authority proposed the central government to soon adopt a law on economic zones to avoid overlapping, provide economic zones with a strong and consistent regulatory framework for administrative management, investment policy and capital sources. It also asked the central government to supplement special preferential policies, higher than those applied to ordinary economic zones, to add competitive advantages and create remarkable differences from other areas; give more incentives to big and good taxpayers; supplement investment capital sources for traffic system construction and development in order to smoothly connect local roads with Da Nang and Quang Ngai; and upgrade trunk roads such as National Highway 14 and Nam Quang Nam to get to the Central Highlands, Southern Laos and Northern Cambodia as well as traffic routes to urban, tourism and service areas.

In addition, the Chu Lai Open Economic Zone Authority proposed the central government to apply specific mechanisms to big projects like allowing Vietnamese people to play lottery and casino in Nam Hoi An project and offer development support policies for the National Automotive Engineering Centre, supporting industries for the garment and textile industry, and adopting financial mechanism for Chu Lai Airport.

Cong Luan

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