Hanoi Encourages Investment in Urban Development
After nearly 1,000 years of establishment and development, Hanoi is now the centre of culture, politics and economics in Vietnam. The capital's economy has developed with an orientation towards industrialisation and modernisation, with the trade-services sector now accounting for 57.2 per cent and industrial sector 40.4 per cent. The city's gross domestic product growth reached 9.6 per cent in the first six months of this year and the growth rate expected for the whole year is 10.83 per cent. Notably, the private sector has been gradually expanded and developed. To date, Hanoi has over 24,000 small and medium size enterprises with total registered capital of VND40 trillion.
Since the Foreign Investment Law was issued, Hanoi has become one of the most attractive destinations for foreign investment, with an annual growth in foreign fund attraction of between 20-25 per cent. So far, it has licensed 633 foreign-invested projects for investors from 42 countries and territories with total registered capital of US$9.18 billion. In the first six months of this year, Hanoi attracted 35 new foreign-invested projects and licensed ten existing ones to boost capital, with total registered capital of US62.5 million. Hanoi now has five large industrial parks and dozens of industrial zones for small and medium size businesses, most of which operate in automobile and motorbike assembly and IT and telecommunications equipment manufacture. With a stable political system and a fast-growing economy, Hanoi is recognised by the international community as one of the safest places for investors.
Additionally, with the advantage of being home to 43 universities and hundreds of vocational schools, Hanoi has access to an abundant labour force for the development of key industries, which require high technologies and accompanying skill-sets, such as electricity, electronics, IT and machine engineering.
According to expert calculations, the city's demand for housing will rise in coming times in accordance with the expected population increase and higher earnings of the capital's residents. As of 2010, Hanoi's population is forecast to increase 1.3 fold and demand for housing by 4.5 fold, so plans for development of infrastructure are being set as a strategic goal of Hanoi.
Dr. Nguyen Quoc Trieu, chairman of Hanoi People's Committee, said that the capital would focus in the future on encouraging investment in urban development. Hanoi not only requires investment capital, but also technology and labour for developing infrastructure over a total area of 6,000 hectares of land. Apart from building new urban areas, Hanoi will also focus on the construction of a system of roads, water supply and drainage facilities, hospitals and schools for these new urban areas.
Mr. Trieu added that in order to upgrade the current transport system Hanoi will need to build three to five more bridges over the Red River and three over Duong River to link the city's urban areas. Moreover, it must have a complete system of roads to ensure normal operation of the city, which already has around four million people. To this end, Hanoi will require huge investment capital, advanced technologies and assistance from foreign experts.
Based on the potential of the city, Mr. Trieu believes that from now to 2010, Hanoi will be able to attract around US$9 billion worth of foreign investment in development of the city's major industries and in construction of urban infrastructure. He is working to ensure that the city progressively improves its policies, creating more favourable conditions, reducing risks, and offering a fair business environment for local and foreign investors alike.
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