Industry - Engine of Economic Growth

9:48:22 AM | 27/10/2020

Since the province was re-established over 23 years ago, the industry of Vinh Phuc has kept growing to hold a pivotal position in the economy, boost economic growth every year, generate jobs and improve people’s livelihoods.

Based on the development viewpoint “Industrial development is the foundation, service - tourism development is the spearhead, and agriculture and rural development is an important task”, Vinh Phuc province has stepped up regional and sector planning, launched and adjusted industrial development planning to 2020 and further to 2030, and industrial park development planning to 2020 and further to 2030. At the same time, the province has prepared land fund and infrastructure development, especially transport infrastructure in industrial zones, provided favorable and equal access to land resources, power grid, water supply infrastructure, communication network, tax incentives, capital, worker training and recruitment. Vinh Phuc has also accelerated administrative procedure reforms, creating an open, attractive and competitive investment and business environment to attract domestic and foreign investors.

In addition to investment incentives regulated by the central government, Vinh Phuc offers various local specific preferential policies for investors and businesses, including the corporate income tax of 10% in 15 years applied to high-tech companies engaged in software, renewable energy, clean energy, waste-to-energy energy, composite material, rare and precious material; and a corporate income tax of 20% in 10 years for projects engaged in high-end steel manufacturing, agricultural machinery and equipment manufacturing. Depending on industries, projects and companies will be entitled to other tax holidays such as corporate income tax exemption for 2-4 years and a 50% tax reduction for 4-9 years, in addition to exemption and reduction of import tax and land rent in some cases.

Attracting selective investment projects and providing timely support policies helped Vinh Phuc exceed the target of corporate establishment. By the end of September 2020, the province had nearly 13,000 companies; 17 out of 32 planned industrial complexes, covering ​​over 358ha, were formed; and eight out of 12 large-scale industrial parks were put into operation by infrastructure investors, including Kim Hoa, Khai Quang, Binh Xuyen, Ba Thien, Ba Thien II, Binh Xuyen, Binh Xuyen 2 and Thang Long Vinh Phuc. The occupancy rate of industrial zones reached 63%, with Binh Xuyen, Kim Hoa and Binh Xuyen 2 fully leased, Khai Quang leasing 98% and Binh Xuyen leasing 85%. To actively assist the local business community to overcome difficulties, especially during the nine-month effort of carrying out the “dual task” of fighting against the COVID-19 epidemic and fostering business performance” in 2020, the province maintained stable growth and affirmed the driving force of industry in economic growth, and led the economy in the right trajectory. Expectedly, by the end of 2020, the share of industry and service will account for 86.5%, an increase of 3.7% over 2015, and the share of agriculture, forestry and fishery will make up for 6.8%, down 3.7% compared to that in 2015.

According to a report released by the Vinh Phuc Provincial People's Committee, in 2015-2020, the industrial and construction sector expanded 12.15% a year on average, nearly doubling the target set in the Resolution of the 16th Provincial Party Congress, always higher than the economic growth. This sector accounted for 65% of the province’s overall growth. In particular, the processing and manufacturing sector always made up for a high share in the industrial structure and accounted for 4.5% of the added value of Vietnam’s manufacturing and processing industry. Many key industrial products expanded well in the period, with electronic component manufacturing contributing nearly 48% to industrial output value. Supporting industries were robustly developed, especially to serve mechanical engineering, manufacturing and ICT, to raise the localization rate and bring the budget revenue to GRDP ratio to 30.38% in 2016-2020, higher than the target set out in the Resolution.

With the right approach, disruptive and innovative methods, the industrial sector of Vinh Phuc province is expected to play a key role in the landscape of socioeconomic development and make Vinh Phuc’s economy a growth engine in the north and the country.

By Nguyet Tham, Vietnam Business Forum

Forthcoming Events