Localities push each other to lure in foreign investment

Manufacturers are more likely to invest in facilities outside the main cities of Vietnam, photo Le Toan

Statistics published by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, indicated that in the first six months of this year, foreign investors registered $13.43 billion in Vietnam.

Almost 1,300 new projects were granted investment registration certificates in the period, with total registered capital of over $6.49 billion, up 72 per cent in the number of projects and up 31 per cent on-year in terms of capital.

The adjusted capital of around 630 ongoing projects stood at about $2.93 billion, up 29.8 per cent on-year in number but down 57.1 per cent in capital terms.

Apple supplier Foxconn has been working with the investor of Yen Lu Industrial Park (IP) in the northern province of Bac Giang to rent a 50 hectare land plot for its expansion. The 50ha factory with a cost of $300 million in Quang Chau IP started construction in early May.

Foxconn is the largest foreign-invested group in Quang Chau, with projects first established in 2019. Currently, the group’s total leased land area is up to 70ha and the total registered capital is $773 million. Its member companies, Fuhong, Fuyu, and Fukang, have also poured million-dollar investments into Quang Chau IP.

In the first six months of 2023, Bac Giang was runner-up in the list of 50 cities and provinces receiving foreign-invested capital inflow with a total investment capital of $1.05 billion, four-times higher than the figure in the same period in 2022, according to the FIA.

Many big names selected Bac Giang as the production hub, including the $621 million Fulian precision technology factory project, which is invested by Ingrasys (Singapore) Pte. Ltd. and has Fulian Co. Ltd. as operator. Meanwhile, Hainan Longi Green Energy Technology Co. Ltd. signed an MoU to manufacture solar panels with an investment capital of $140 million, starting in the first quarter of this year.

Deputy Minister of Planning and Investment Tran Quoc Phuong said that he appreciated the province’s effort in completing its master plan for 2021-2030. The effort to improve the investment environment was shown via a leap of 29 steps in the Provincial Competitiveness Index ranking in 2022.

Along with Bac Giang, Hanoi has also overcome many heavyweight rivals to maintain the top spot in the first months of the year. The biggest deal was the $1.5 billion agreement between Sumitomo Mitsui Banking Corporation, Japan’s second-largest banking group, and VPBank. The purchase of a 15 per cent stake in VPBank was the biggest acquisition ever recorded in Vietnam’s banking industry.

In recent times, many localities, such as Nam Dinh, Hung Yen, Thai Binh, Nghe An, Quang Binh and Long An, have seen strong action to awaken the potential in attracting foreign-invested capital.

Thai Binh is a good example. The province was renowned as a ‘rice hometown’ in recent years, but has started to develop large-scale IPs to welcome investors, including the 590ha Green iP-1, developed by Green I-Park JSC. The park was selected as a key pioneer project in Thai Binh Economic Zone thanks to its many advantages to meet the strictest requirements of investors.

After more than two years of construction, Green iP-1 has attracted seven projects, with a total value of $721 million. The funding has brought Thai Binh good standing, ranking ninth out of all cities and provinces nationwide in terms of foreign direct investment.

Speaking at a meeting between Prime Minister Pham Minh Chinh and foreign-invested enterprises organised in late April, Nakajima Takeo, chief representative of the Japan External Trade Organization in Hanoi, said, “I have witnessed that investors are tending to invest in provinces located in the periphery of the country, such as Thanh Hoa, Quang Ninh, and Thai Binh, about 150-200km from Hanoi. This is a precious opportunity for such provinces to recover their economy.”

So far this year, Singapore is the top foreign investor in Vietnam with $3 billion, accounting for 22.3 per cent of foreign direct investment into the country in the period. The runners-up were Japan ($2.2 billion), China ($1.95 billion), and South Korea ($1.22 billion).

Key road opens investing avenues The megaproject of Ring Road 3, which started construction this month, can help more clearly shape the face of a multipolar Ho Chi Minh City urban area and create new development impetus for the real estate market.

Attracting FDI crucial for Mekong Delta Exploiting foreign direct investment (FDI) capital inflows can create the driving force to promote the development of the Mekong Delta - the southern key economic region.