Economic Zone Authority Driving Force for Sustainable Growth of Hai Phong City

9:29:42 AM | 6/18/2024

Amid slowing global and domestic economies, industrial zones (IZs) and economic zones (EZs) in Hai Phong City have made great efforts to realize many solutions to achieve impressive investment attraction results. After 30 years of development, IZs and EZs have reaffirmed their important role in the city's socioeconomic development and become the driving force for growth of the northern coastal region. 

Breakthroughs in investment attraction

Hai Phong currently has 14 operational industrial parks with synchronously invested technical infrastructure on a total area of more than 6,000 ha, of which rentable industrial area is over 4,000 ha. The occupancy rate is about 60.5%. These IPs have an increasingly important position in economic restructuring towards industrialization and modernization, empowering the city to improve its business environment, enhancing competitiveness and boosting local development.

Mr. Le Tien Chau, Secretary of the Hai Phong City Party Committee, conducts a visit to LG Innotek Vietnam Co., Ltd

Hai Phong also has a plan to prepare for a new phase of industrial development with a vision to 2050. According to the construction planning, in addition to economic zones, Hai Phong planned 25 industrial parks with a total maximum area of 15,777 ha.

In 2023, the Prime Minister approved Hai Phong’s investment in Xuan Cau Industrial Park and Non-Tariff Area (752ha) and Tien Thanh Industrial Park (410ha). These two industrial parks are accelerating the progress of infrastructure construction and are expected to go into operation in 2024 - 2025.

In addition, Hai Phong will build 13 new industrial parks, with a total area of nearly 5,000 ha, Nam Trang Cat, Thuy Nguyen, Trang Due 3 and Giang Bien, with a total area of more than 1,383 ha. Applications for the formation of these IPs have been submitted to competent authorities for approval.

In 2023, although world and domestic economies faced many headwinds, IZs and EZs in the city still attracted US$4.5 billion of investment capital. Of the sum, foreign investment capital (FDI) accounted for US$3.5 billion, from 62 new projects and 37 existing projects that increased their capital fund, fulfilling 175% of the target and soaring 140% over 2022. Meanwhile, the domestic direct investment (DDI) was over US$1 billion (VND23,847 billion), from 15 new projects and 15 existing projects. The value equaled 238.47% of the yearly plan and surged 192% year on year.

To date, IZs and EZs in Hai Phong City have housed 933 FDI projects with a combined investment capital of over US$28.9 billion and 217 DDI projects with over VND328 trillion (US$14.2 billion) of investment capital. In the 2020 - 2023 period, IZs and EZs lured over US$10 billion of FDI funds, equal to 88.8% of the target stated in the resolution of the 16th Municipal Congress on FDI capital attraction in IZs and EZs in 2020 - 2025. 

In 2024, Hai Phong expected to attract US$2 - 2.5 billion of FDI funds. In the first two months of 2024, the licensed FDI value was US$165.24 million, up 26% year on year. Of the sum, 11 new grants in IZs and EZs registered to invest US$149.18 million, accounting for 99.27% of the total.

Strengthening innovation in investment promotion

The Hai Phong Economic Zone Authority (Heza) has actively carried out Resolution 06-NQ/TU dated April 7, 2022 of the Standing Board of the Hai Phong City Party Committee on main tasks and solutions of strengthening IZ and EZ management and development to 2025, with a vision to 2030.

The authority always pays attention to directing its professional units to focus fiercely, regularly and consistently on manufacturing and business recovery in the new context. It also intensifies inspection, guidance and support for tenants in IZs and EZs to comply with current laws. The agency actively approaches and helps investors and businesses in trouble in various aspects like capital contribution and disbursement, project progress, labor management, trade, import and export.

The serious implementation of administrative reform and digital transformation enhances the effectiveness and performance of administration. Businesses are treated as the center of service. As a result, local companies are facilitated to expand their operations while the business and investment climate has been increasingly improved, open, safe and transparent. Hai Phong has become a potential and reliable destination for investors. So, the city’s position and influence are increasingly raised.

The authority has actively applied solutions to attract selective investors, with emphasis on environmentally friendly high-tech investors with great potential, influence and contributions to the city and on domestic giant firms to develop the city’s three economic pillars: High-tech industry, seaport - logistics and tourism - trade.

Carrying out Resolution 50-NQ/TW dated August 20, 2019 of the Politburo on orientations perfecting institutions and policies, improving the quality and effectiveness of foreign investment cooperation to 2030, the authority has launched many programs and measures to enhance connectivity, support domestic business development, boost technological absorptivity, join supply chains, manufacture supporting products for FDI firms, and facilitate development cooperation between domestic and foreign enterprises.

New motivation from Hai Phong Southern Coastal Economic Zone

According to the plan, 20,000-ha Hai Phong Southern Coastal Economic Zone along the coastal highway consists of Van Uc River, Nam Do Son Port and Logistics Hub and Tien Lang Airport, stretching from Do Son district to Kien Thuy, Tien Lang and Vinh Bao districts. This is a third-generation multi-sector economic zone which focuses on high-tech industries and modern logistics. It will be Hai Phong's key point in regional and world value and supply chains. Preserving cultural values and strengthening national defense and security are also concerns.

Hai Phong Southern Coastal Economic Zone will be designed to develop a free trade zone, with priority given to building industrial parks, industrial clusters, international logistics centers and urban areas along coastal roads. It will utilize advantages from the Nam Do Son Port and an international airport in Tien Lang district.

By 2030, the economic zone will become a key driving force of the city’s economy, equivalent to 80% of the capacity of Dinh Vu - Cat Hai Economic Zone in 2023. It will play a particularly important role in connecting with neighboring economic zones, forming a chain of coastal economic zones, and driving regional development.

The formation of Hai Phong Southern Coastal Economic Zone is aimed at taking advantage of the development of Dinh Vu - Cat Hai Economic Zone, especially in the context of a strong investment wave from other countries into Vietnam. With an important position in the dynamic region of the Red River Delta, located in three important economic corridors, the economic zone will play a particularly important role in connecting with neighboring economic zones, forming a chain of coastal economic zones and serving as the driving force for regional development.

In 2023, the share of high technology, manufacturing and processing and logistics invested in Hai Phong's IZs and EZs exceeded 93%. Specifically, the electronics industry accounted for 34%; logistics and infrastructure, 15%; and manufacturing industry, 44%. Therefore, IZs and EZs closely follow the orientation of developing the three economic pillars of Hai Phong: High-tech industry, seaport - logistics, and tourism - trade.

Ngoc Tung (Vietnam Business Forum)