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- Hai Phong is the largest port metropolis of Northern Vietnam, the third-largest metropolis after Ho Chi Minh and Hanoi, and probably the most vital industrial hubs of the nation.
- Over the previous 5 years, Hai Phong was one of many fastest-growing cities by way of GRDP throughout Vietnam.
- With an upgraded infrastructure system, a positive geographical location along with the immense help from the federal government, Hai Phong carries important potential for international funding alternatives.
Situated about 120 kilometers east of the capital Hanoi, Hai Phong just isn’t solely the largest coastal metropolis within the northern area of Vietnam but in addition one of many main financial facilities of the nation. It’s amongst 5 municipalities of Vietnam, together with Hanoi, Ho Chi Minh Metropolis, Can Tho, and Da Nang. With an space of 1,527 sq. kilometers and a complete inhabitants of two.05 million individuals as of January 2021, it’s the seventh-most populated metropolis within the nation.
Strategically located on the sting of the Crimson River Delta and with shut proximity to the border with China, Hai Phong serves as a significant buying and selling hub. Being the one metropolis within the North that has 5 modes of transportation, together with railways, roadways, airways, inland waterways, and maritime, Hai Phong has the potential to become a middle of large-scale manufacturing, industrial parks, and financial zones throughout Southeast Asia.
Hai Phong statistics
In recent times, Hai Phong has managed to keep up its place among the many high two quickest gross regional home product (GRDP) rising localities in Vietnam. The common annual development fee of Hai Phong within the 2016-2020 interval was 14.02 %, which is double that of the 2011-2015 interval, and a pair of.1 instances larger than the nationwide common.
In 2020, Hai Phong ranked second nationwide by way of GRDP development fee, reaching roughly US$8.3 billion, up 11.22 % 12 months on 12 months. Regardless of having the bottom development fee in comparison with the final three years partially because of the pandemic, it was nonetheless comparatively excessive amongst Vietnam’s 63 provinces (solely after Bac Giang with 13.02 % development).
Within the first half of 2021, Hai Phong’s GRDP continued to extend by 13.52 % in comparison with 10.87 % year-on-year.
Sector development
The business and building part proceed to develop the quickest at 18.85 % within the first half of 2021. In comparison with the primary half of 2020, the development sector grew by 6.89 %, whereas the business sector with a development fee of 20.02 % performs a significant position within the metropolis’s economic system.
The providers sector elevated by 8.92 %. The agriculture, forestry, and fisheries sectors barely elevated by 1.03 %.
Financial construction
Hai Phong’s financial construction continues to shift in direction of industrialization within the quest for financial growth, by which the business and providers sectors’ share of the town’s GDP might be rising whereas the agriculture sector’s share might be declining.
As of 2020, the business and building sectors remained dominant, accounting for the very best share of 49.73 % of the town’s GDP, adopted by the providers sector at 39.51 %. The agriculture, forestry, and fisheries sectors solely accounted for 4.6 %.
Commerce
In comparison with the identical interval final 12 months, Hai Phong’s complete export turnover within the first six months of 2021 is estimated at US$11.74 billion, up 31.31 % 12 months on 12 months. In the meantime, complete import turnover in six months of 2021 is estimated at US$11.66 billion, up 32.9 % 12 months on 12 months.
Infrastructure
As well as, the native authorities are stepping up the town’s infrastructure system. In response to the Folks’s Committee Chairman of the town, Hai Phong plans to construct one other 100 bridges with a complete funding of US$3.6 billion. Hai Phong’s Lach Huyen port – the biggest deep-sea port in Northern Vietnam can even be expanded with the development of Terminal 5 and 6. Upon completion, the 2 terminals are anticipated to have the ability to obtain vessels of 100,000DWT, facilitating shipments from Northern Vietnam on to the EU and the US markets.
The Hanoi – Hai Phong Expressway and Hai Phong – Ha Lengthy Expressway are components of a collection of vital regional infrastructure tasks. As soon as the Van Don – Mong Cai Expressway’s building in Quang Ninh is accomplished, it should create the longest freeway in Vietnam, linking all main financial facilities, industrial zones, and worldwide airports within the North, together with Noi Bai (Hanoi) – Cat Bi (Hai Phong) and Van Don (Quang Ninh), all the best way as much as Mong Cai worldwide border gate. This can deliver down the time and thereby the price of transportation, fostering cross-border commerce between Vietnam and China and different ASEAN international locations.
Overseas direct funding
FDI figures and efficiency
In response to the Ministry of Planning and Funding (MPI), as of 2020, Hai Phong was the sixth-largest recipient of FDI in Vietnam with a complete registered funding capital of US$20.20 billion. As of June 2021, the town has 12 industrial parks in operation, by which there have been 875 FDI tasks by international buyers coming from 36 international locations and territories. Most buyers are from Japan, South Korea, China, the EU, the US, and Taiwan.
Some main tasks embrace the LG Show mission from South Korea (value US$5.84 billion), the Bridgestone tire plant from Japan (value US$1.2 billion), and Microsoft and Apple meeting companion – Pegatron electronics manufacturing plant from Taiwan (value US$481 million).
As reported by the Hai Phong Financial Zone Authority (HEZA), the FDI tasks in Hai Phong industrial parks and zones account for greater than 60 % of the town’s industrial manufacturing and greater than 70 % of its export turnover.
In 2021, Hai Phong goals to attain between US$2.5 – 3 billion in FDI, said by the Head of the administration board of HEZA. Within the first half of 2021, the overall worth of newly registered capital from 26 new tasks, adjusted capital from 35 current tasks, and capital contribution or share buy by international buyers in Hai Phong reached US$1.1 billion. This made up 44.3 % of 2021’s objective, and is 3.9 instances as excessive as that in H1 of 2020.
The vast majority of new international capital is invested within the manufacturing and processing business.
Following Decision No.45-NQ/TW specializing in the financial growth of Hai Phong Metropolis for the 2021-2025 interval, the authorities encourage international investments within the high-tech business, seaports-logistics, and tourism-commerce because the three pillars of Hai Phong’s economic system. HEZA additionally goals to construct 15 extra new industrial parks with a complete space of 6,418 hectares, in preparation for the brand new wave of international funding alternatives.
Authorities incentives in Dinh Vu – Cat Hai Financial Zone
The Dinh Vu – Cat Hai Financial Zone is without doubt one of the main coastal financial zones in Vietnam and is at present residence to eight industrial zones in Hai Phong. Underneath the present legislation, Dinh Vu – Cat Hoi enjoys many funding incentives:
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- Incentive tax fee of 10 % inside 15 years (calculated from the primary 12 months the enterprise has income from new funding tasks); and
- Tax exemption for 4 years, and discount of fifty % for the subsequent 9 years (calculated from the date of taxable revenue from the brand new funding tasks);
- Private revenue tax: discount of fifty % for many who instantly work within the financial zone; and
- Import-export tax, value-added tax, particular consumption tax: tax exemption in non-tariff zones.
Hai Phong as a China+1 location
With such fast growth into a significant manufacturing hub, Hai Phong is a strategic funding location for international buyers contemplating supplementing their manufacturing operations based mostly on the China plus one technique. Traders can select to arrange alternate manufacturing amenities in one other aggressive market reminiscent of Vietnam for provide chain diversification. In Could 2020, Germany’s Tesa, an industrial adhesive tape producer, confirmed to speculate US$55 million into Haiphong following the China plus one mannequin and reiterating Hai Phong as a producing base.
In 2020, Hai Phong ranked seventh out of 63 provinces in Vietnam, by way of provinces having probably the most favorable enterprise surroundings, based on the 2020 Provincial Competitiveness Index (PCI) evaluation. The Index of Industrial Manufacturing (IPP) of Hai Phong in H1-2021 is estimated to extend by 20.5 % 12 months on 12 months, which is among the many highest development charges of provinces and cities with massive industrial-scale manufacturing in Vietnam.
With an advantageous geographical location, along with the infrastructure increase in addition to quite a few incentives to draw FDI from the authorities, the continued industrial growth of Hai Phong won’t solely strengthen Vietnam’s reference to the worldwide provide chain, but in addition make it one of many excellent areas for buyers who’re contemplating shifting their manufacturing operations and enhance commerce with the East and Southeast Asian international locations.
About Us
Vietnam Briefing is produced by Dezan Shira & Associates. The agency assists international buyers all through Asia from places of work the world over, together with in Hanoi, Ho Chi Minh Metropolis, and Da Nang. Readers could write to vietnam@dezshira.com for extra help on doing enterprise in Vietnam.
We additionally preserve places of work or have alliance companions aiding international buyers in Indonesia, India, Singapore, The Philippines, Malaysia, Thailand, Italy, Germany, and the United States, along with practices in Bangladesh and Russia.
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