In mid-April, a scheme was approved on rearranging administrative units and local government organisations. In the north, the province of Bac Giang will be incorporated into Bac Ninh province; in the south, Ba Ria-Vung Tau and Binh Duong provinces will be incorporated into Ho Chi Minh City.

Bac Ninh and Bac Giang are jointly known as the industrial capital of the north and the production base of many large corporations. “Merging these two provinces is expected to bring many significant advantages, especially in strengthening the production supply chain and attracting foreign direct investment,” said Van Duc Phu, deputy manager in charge at the Northern Investment Promotion, Information, and Support Centre under the Ministry of Finance.

The merger will create an economic entity with a significantly larger scale, including a larger population of about 3.4 million people and a high aggregate regional GDP, potentially in the top five of the country. “This scale creates greater attractiveness for large-scale investment projects and global supply chains,” Phu added.

Both provinces have strengths in industry, especially electronics, with the presence of big corporations such as Samsung, Foxconn, and other suppliers. The merger will create an industrial metropolis with the largest industrial zone (IZ) network in the north, including more than 30 IZs, facilitating the linkage and development of supporting industries and logistics serving this industrial cluster.

“The merger helps optimise the use of infrastructure and common resources, allowing for more synchronous planning and development, helping to maximise decentralisation to local authorities at the provincial and communal levels and simplifying administrative procedures, such as reducing transaction costs, saving time and creating better conditions for businesses and investors,” Phu emphasised.

In the south, Phu said management boards of export processing zones and economic zones of the expanded Ho Chi Minh City need to plan priority developments, where to reserve large amounts of land to attract major groups, and where to locate satellite areas.

“The city should take advantage of its market of about 40 million people that includes the Mekong Delta, high-quality labour, a ready supply chain for a number of existing industries, and its integrated transportation system,” Phu said.

At present, Binh Duong is known as the capital of Vietnamese industry. According to the Vietnam Association of Real Estate Brokers, the province is the largest IZ area province with more than 12,700 hectares, accounting for one-quarter of the IZ area in the south and 13 per cent of the whole country.

According to industrial real estate consultants Redsunland, Binh Duong has been successful in luring overseas funding thanks to the strong development of IZs, but still needs to expand the port system, warehouses, telecommunications, and especially banking and financial facilities, which are concentrated in Ho Chi Minh City now.

Meanwhile, Ho Chi Minh City is the industrial-logistics centre of the country but has limitations in land and traffic infrastructure, although it has a sea frontage of about 23km. Ba Ria-Vung Tau has more than 300 km of coastline and Cai Mep-Thi Vai deepwater port, offering a great advantage in the supply chain and international trade.

The merger of provinces and cities not only expands the total land area but also puts land availability under unified management. Land use planning is to become more comprehensive and strategic, Redsunland said on its company website in April.

“This is also an opportunity for localities to develop supporting, specialised, ecological, and high-tech IZ complexes. Thereby, businesses can optimise operating costs and access labour resources more conveniently, and the strengths of each region will be maximised,” it added.

The restructuring of administrative units in Vietnam is a momentous move, reflecting a broader vision to streamline governance, improve infrastructure, and create more integrated urban-industrial ecosystems, according to Thomas Rooney, senior manager of Savills Hanoi’s Industrial Services.

“If carried out thoughtfully and systematically, the merger could lead to the formation of large-scale urban industrial regions that operate more efficiently and attract stronger foreign investment,” Rooney said. These markets could complement one another, leveraging mutual strengths while offsetting existing limitations. Moreover, it presents a valuable opportunity to accelerate urbanisation across localities.”

While it will certainly come with growing pains for investors, such as adjusting to new jurisdictions or shifting relationships between local authorities, it also opens up opportunities for more cohesive long-term planning and economic development.

“Adjusting administrative boundaries will likely have ripple effects on land-related procedures,” Rooney explained. “In the short term, we may see some delays or confusion as new authorities take over and regulations get realigned. However, with clear communication and coordination between departments, this transition could simplify processes in the long run.”

In the longer term, it could also encourage more consistent and transparent permitting frameworks across merged zones, which investors would welcome, he added. “The downside is that during the transition period, inconsistencies or overlaps in policies could lead to bottlenecks if not managed proactively.”

However, if this restructuring is carried out in tandem with infrastructure investment and improved transport connectivity, it could present an opportunity to expand the labour supply pool, enhance recruitment quality, and ultimately improve living and working conditions for workers in the long term, Rooney added.

Source: https://vir.com.vn/modern-industrial-system-targeted-128653.html

Financial centres will ensure new standards

At a conference on building Vietnam’s international financial centre (IFC) by the Ministry of Finance in coordination with Ho Chi Minh City People’s Committee on March 28, domestic and international experts shared ideas to shape different support services, helping Ho Chi Minh City’s IFC carve out its own position and be competitive enough.

According to Jens Lottner, CEO of Techcombank, the IFC is opening up many new opportunities for the market.

“For example, the whole market will have to raise its standards according to international transaction criteria, and businesses can borrow capital in Vietnam without having to go through other bridges like Singapore,” Lottner said.

Great opportunities also lie in the technology sector. According to Lottner, Asia has countries that provide advanced financial services and develop digital assets such as cryptocurrencies. “Therefore, it is key that Vietnam can look for suitable simulation models, especially blockchain products, cryptocurrencies, and AI applications in commercial products,” he said.

In addition to digital assets, the second service group that should be focused on is green finance, in which Vietnam has many advantages, such as large renewable energy sources.

“Vietnam needs to quickly build a green finance portfolio according to international standards, establish promotion systems and have clear regulations on carbon emissions to motivate investors,” he said.

Traditional asset management companies are also facing new opportunities, in the context of a market size that is still very modest compared to international standards.

According to Nguyen Hoai Thu, chairwoman of VinaCapital Fund Management, if Ho Chi Minh City becomes an IFC, it will help pull in more new investors as well as international capital flows to the Vietnamese market.

“In this context, fund businesses that are slow in terms of technology management will also have to change. When there are many new high-tech products such as blockchain, for example, existing systems in the capital market will also need to change accordingly,” Thu said.

In terms of products, Thu also believes that tokenising traditional financial products will make them easier to trade and more attractive to foreign investors. “Some changes are definitely needed to help the capital market develop more strongly in the future, including tax incentives or removing barriers that are no longer practical,” Thu said.

Nguyen Thi Bich Ngoc, Deputy Minister of Finance, commented that the construction of an international financial hub in Vietnam must have its own identity, different from any other country, taking advantage of comparative factors in terms of economy, society, and geopolitics.

“Vietnam has strongly integrated into the international economy, and so this is an opportunity for Vietnam to develop special types of finance trade finance. Vietnam also has stronger conditions to build an IFC based on the export of agricultural products and traditional goods. It is also possible to build commodity exchanges based on blockchain,” Ngoc said.

Andrew Oldland, head of the International Financial Centre Working Group under TheCityUK, said that Vietnam needs to adjust its IFC construction model to suit the context, in which it must create a difference from successful financial centres in the world.

“When building policies, Vietnam needs to have a mechanism for free money flow, clearly identify innovation trends in financial centres such as fintech and green finance,” Oldland said. “Modern financial services can only be truly effective when an IFC meets two core conditions: infrastructure and talent human resources.”

Nguyen Thuy Hanh, CEO of Standard Chartered Bank Vietnam, suggested that financial centre must ensure a stable and safe foreign exchange trading environment, simplify the process of granting work permits and international investment cooperation.

“Owning this environment will make it easier for international financial institutions to co-finance large projects, especially in the fields of infrastructure and green finance. Good infrastructure is an essential condition to pull in international investment sources,” Hanh said.

The issue of talent human resource is also a key condition that many businesses mentioned, especially the banking sector and fund management companies, together with the other pillars of legal framework and infrastructure, according to Iain Frew, British Ambassador to Vietnam.

“IFCs require specific skills and higher standards. The younger generation can do it, but how to engage resources to implement this initiative is an important question that Vietnam must answer,” Frew said.

Source: VIR

The return of Donald Trump to the US presidency signals a renewed focus on trade imbalances that could impact Vietnam’s booming trade relationship with the US. Last year, Vietnam enjoyed a trade surplus of nearly $100 billion with the US, making it America’s third-largest trade partner after China and Mexico.

While this relationship has propelled Vietnam’s economic growth, it may also place Vietnam under closer scrutiny, with Trump’s administration keen on correcting significant trade deficits.

Michael Kokalari, chief economist of VinaCapital, emphasised Vietnam’s unique role in helping the US reduce its reliance on China, particularly for low-cost goods.

“Vietnam can be seen as a useful partner for the US, helping reduce dependency on low-cost Chinese goods,” he explained, noting that Vietnam’s high wages and limited skilled factory labour make it less competitive for low-value production.

Kokalari suggested that the US may begin to focus on high-value imports from Vietnam, such as liquefied natural gas and aircraft engines, that could offset the trade imbalance, ultimately reducing the likelihood of severe tariffs targeting Vietnamese goods.

Staying resilient in the face of tariffs

Koh Eng Meng, Deputy Director of Investment and Asset Management of KTG Industrial

Although Trump’s administration has a history of tariffs, experts predict that Vietnam will remain resilient.

Koh Eng Meng, Deputy Director of Investment and Asset Management of KTG Industrial – a major industrial real estate developer in Vietnam, highlighted Vietnam’s strategic advantage in Southeast Asia, noting that the country has largely avoided the harshest penalties impacting Chinese exports.

“Vietnam’s minor trade deficits with the US and its favourable position in Southeast Asia make it an essential destination for foreign investment,” he said.

Koh underscored that this resilience stems from Vietnam’s stable economic policies, which have kept foreign direct investment (FDI) flowing despite global uncertainties.

Moreover, Koh highlights Vietnam’s rising middle-class and expanding domestic consumer market as pivotal factors in its sustained appeal to investors.

“Vietnam is poised not only to become a regional manufacturing centre but also to grow as a significant consumer market,” he noted.

This development aligns with the ‘China + 1’ strategy, where companies are diversifying production away from China to other hubs, with Vietnam emerging as a top choice.

Koh explained, “This trend strengthens Vietnam’s manufacturing sector while driving consumer growth, making it an attractive destination for multinational companies looking to mitigate risk amid ongoing US-China tensions.”

Adding to this optimistic outlook, the World Bank projects Vietnam’s GDP growth to reach 6.1 per cent in 2024, rising to 6.5 per cent in 2025. Similarly, UOB Bank has revised its 2024 growth forecast upward to 6.4 per cent, higher than its previous projection of 5.9 per cent.

These positive economic forecasts reinforce Vietnam’s potential to attract foreign investors and cultivate a robust and dynamic domestic market.

Government initiatives to prepare for trade uncertainties

Trump’s campaign rhetoric signals a shift towards protectionist policies, raising questions about potential tariffs on Vietnamese imports.

In its latest report, SSI Research cautions that this uncertainty may cause some foreign-invested enterprises to delay decisions, pending clearer guidance from the new administration on tariffs affecting Vietnamese imports.

“Ahead of these challenges, the Vietnamese government is implementing measures to make its economy more resilient and attractive to investors,” according to SSI Research.

According to the brokerage, these initiatives include tax incentives for semiconductor manufacturing, amendments to streamline investment certification processes for new industrial zones, and infrastructure investments such as the North-South expressway and rail links with China.

The firm suggested, “These upgrades not only support Vietnam’s industrial base but also help secure FDI inflows in the face of potential US tariff measures.”

KTG Industrial Yen Phong IIC Phase 2 is expected to meet high demand from manufacturing companies in Bac Ninh

Frederic Neumann, chief Asia economist at HSBC, noted that Vietnam’s diversification efforts could buffer it against trade impacts from the US.

“Vietnam can deepen trade ties with other markets, just as China diversified its export destinations,” he said.

“Even if Vietnam were to face certain tariffs, its strong manufacturing base and competitive advantages would allow it to pivot and deepen trade ties with other regions, including Europe and emerging markets,” Neumann added.

Similar to how China adapted by diversifying its export destinations, Neumann believes that Vietnam has the potential to mitigate any negative impact by strengthening partnerships beyond the US market.

Vietnam’s position as a key regional investment hub

Despite the looming threat of trade restrictions, Vietnam continues to solidify its standing as a key investment destination.

Koh Eng Meng believes that Vietnam’s stable policies and strategic location make it an attractive choice for foreign investors across multiple high-potential industries.

“Vietnam has firmly established itself as a top investment destination, driven by its stable policies, strategic geographic location, and a proactive approach to economic diversification. The country has become a critical hub for industries such as technology, electronics, and renewable energy,” said Koh.

Koh Eng Meng spoke at the Enterprise Global Exchange meeting in Shenzhen, China

“Tech and electronics, in particular, face global scrutiny due to political sensitivities, but Vietnam’s positioning has enabled it to emerge as a leader in these sectors. Additionally, the country’s push towards green energy and sustainable production is opening doors for innovation and investment,” he said, before adding that Vietnam’s potential extends beyond its traditional manufacturing strengths.

“Vietnam is increasingly tapping into emerging sectors like biotechnology, logistics, and digital transformation, which promise robust growth and opportunities for investors looking to diversify into high-value industries,” Koh explained.

By leveraging its strategic policies and focus on future-ready industries, Vietnam strengthens its appeal to foreign investors, even in the face of global economic challenges.

Vietnam may be one of the fastest-growing emerging markets by 2035. Photo: Le Toan

The S&P Global Look Forward Journal, titled “Emerging Markets: A Decisive Decade”, which considers the opportunities and challenges the next decade will bring for emerging markets’ economic growth in terms of energy transition, supply chain integration, and labour productivity.

Among the findings, S&P Global opine that emerging markets will play a crucial role in shaping the global economy over the next decade, averaging 4.06 per cent GDP growth through 2035, compared with 1.59 per cent for advanced economies. By 2035, emerging markets will contribute about 65 per cent of global economic growth, driven mainly by emerging economies in Asia, including China, India, Vietnam, and the Philippines.

Supply chain relocation will remain a key trend that could benefit emerging markets, including Vietnam. The country’s ties with the United States have been developing quickly, even before the pandemic. Vietnam’s exports to the US have increased fourfold since 2013 and accelerated following tariffs imposed on China in 2018. The country became the seventh-largest goods supplier to the US in 2023.

“We estimate that Vietnam could become one of the fastest-growing emerging markets by 2035, buoyed by policy consistency and a focus on reinforcing its trade potential. Vietnam’s strong presence in evolving global supply chains will be determined by sustained progress in addressing infrastructural, labour and resource constraints,” the report noted.

In addition, emerging markets are also setting sector-specific objectives. Among them, Vietnam aims to secure a 10 per cent share of the world’s semiconductor market by 2030 through its National Semiconductor Industry Strategy.

The report identifies critical development needs that emerging markets face in facilitating this growth, including additional investment in adopting new technology such as AI and automation. Furthermore, emerging markets will need to adapt to new policies and extraterritorial legislation from advanced economies to secure more foreign direct investment and take advantage of favourable demographics expanding their labour force and consumer markets. Markets that produce critical minerals for the energy transition like copper, cobalt, nickel, and lithium will likely record exponential demand growth in the next 10 years, and others will benefit from global supply chain relocations.

Carlos Cardenas, head of Latin American insights and analysis for S&P Global Market Intelligence, noted that, “Despite these opportunities, emerging markets will traverse an evolving geopolitical environment marked by unresolved conflicts and other persistent disruptions. These countries must adapt to a world where policymakers, particularly within advanced economies, seem less willing to embrace limitless trade and globalisation, adding complexity to emerging markets’ growth prospects.”

Vietnam is ramping up investment attraction in high-tech areas, such as microchip production and AI, photo Le Toan

According to the Foreign Investment Agency under the Ministry of Planning and Investment, (MPI) in the first nine months, total registered foreign direct investment (FDI) reached more than $24.78 billion, an on-year increase of 11.6 per cent.

In September alone, the inflow was more than $4.26 billion, accounting for 17.2 per cent of the total registered FDI in the first nine months.

Many localities, such as Bac Ninh, Binh Duong, and Dong Nai, announced provincial planning towards 2030 and carried out investment promotion activities. At these events, many projects were granted new and expanded certificates. The total registered FDI, and additional capital, has accordingly reported the highest level since the beginning of the year.

There were three large capital adjustment initiatives in September, contributing to the total additional capital in January-September to more than $7.64 billion, an increase of 48.1 per cent on year.

The largest in Bac Ninh province, which added almost $1 billion, is in real estate and is the second billion-dollar project this year registered in Vietnam, following the $1.07 billion capital increase from semiconductor manufacturer Amkor.

Also in September, Luxcase Precision Technology was approved to increase its capital by an additional $299 million to $473 million. Meanwhile, Advance Tire Vietnam in Tien Giang province also increased its capital by more than $227 million, to over $615 million in total.

Luxcase initially had funding approved at the beginning of the year at $24 million, but has already increased its capital twice to reach nearly half a billion US dollars.

A government report sent to the National Assembly Standing Committee also highlighted the performance of FDI mobilisation. So far this year, disbursed FDI reached $17.3 billion, up 8.9 per cent on-year.

Bright spots in attracting such funding include ventures in pioneering industrial sectors, with the quality of FDI inflows improving significantly.

Many large projects in the sectors of semiconductor, energy (production of batteries, photovoltaic cells, and silicon bars), production of components, electronic products, and high added-value products have also received new funding and capital expansion.

In addition to Amkor’s capital increase, the Foxconn Bac Ninh FCPV factory is pumping in over $380 million; Goertek’s Nam Son-Hap Linh electronic and audio manufacturing factory has added $280 million; and Victory Giant Vietnam’s high precision printed circuit board venture has poured in an extra $260 million.

Amkor exported its first shipment recently, just months after going into operation, while Foxconn is also accelerating the production of iPads and Macbooks at its factory in Bac Giang province.

Numerous technology corporations are also interested in Vietnam, as made evident by the participation of Nvidia, Qualcomm, Intel, AMD, Samsung, and Meta at the Innovate Vietnam event on October 1.

At the event, tech leaders pledged to support Vietnam in developing semiconductors, AI, and innovation. Meta’s Global Affairs president Nick Clegg said, “Beginning 2025, Meta will expand manufacturing of its latest mixed reality device, Quest 3S, to Vietnam. This decision underscores Vietnam’s growing importance in Meta’s manufacturing ecosystem. The expansion is expected to create up to 1,000 jobs and contribute millions of US dollars to the Vietnamese economy.”

Previously, Samsung Group also planned to put another $1.8 billion in an LED screen factory in Bac Ninh.

The MPI reported that the total registered FDI in Vietnam should reach the same amount as last year, at about $39-40 billion. “Both the quantity and quality of capital flows will be improved, contributing to enhancing the quality of the economy,” the ministry highlighted.

In the first eight months of 2024, a total of 2,247 new projects were granted investment registration certificates, with registered capital of over $12 billion, up 8.5 per cent in the number of projects and up 27 per cent on-year in terms of capital.

Vietnam reports $20.5 billion in FDI in first eight months, Photo VNA

The adjusted capital for 926 ongoing projects reached $5.7 billion, up 4.9 per cent on-year in number, but up 14.8 per cent in capital. There were 2,196 capital contributions and share purchases valued at $2.81 billion, falling 7.8 per cent and 40.9 per cent, respectively.

Foreign groups invested in 18 out of the 21 economic sectors in the first seven months of the year. Among them, the manufacturing and processing industry took the lead with $14.17 billion, accounting for 69 per cent of the total, and a 7.4 per cent increase from a year ago.

Real estate followed with $3.36 billion, capturing 16.4 per cent of the total and up 77.6 per cent from a year earlier. This was followed by wholesale and retail, and professional, science and technologies, with almost $885 million and $762 million, respectively.

In terms of quantity, the manufacturing and processing industry led in the number of new projects with 34.3 per cent, as well as capital adjustment, with 66.1 per cent. Meanwhile, wholesale and retail led in the number of capital contributions and shares purchases, at 41.9 per cent.

Singapore was the largest foreign investor among the 94 countries and territories investing in Vietnam during the period, with nearly $6.79 billion, or 33.1 per cent of total FDI, up 79.1 per cent in the same period last year. Hong Kong (China) ranked second with nearly $2.4 billion, accounting for 11.7 per cent of total FDI. It was followed by Japan, China, and South Korea.

Regarding quantity, China ranked first in the number of new projects with 29.5 per cent. South Korea took the lead in terms of capital adjustments as well as capital contributions and share purchases, accounting for 24.5 per cent and 26 per cent, respectively.

In the eight-month period, Bac Ninh was the largest FDI recipient with $3.47 billion, making up nearly 17 per cent of the total and almost triple the figure from last year.

“The strong demand for industrial spaces in Bac Ninh is driven by its strategic location, supportive government policies, well-developed infrastructure, and abundant skilled workforce. This demand is anticipated to continue,” Dang Trong Duc, CEO of KTG Industrial.

Quang Ninh was second with over $1.78 billion, making up 8.7 per cent of the total and 2.3 times higher than the same period last year. Ho Chi Minh City came closely behind with $1.76 billion, capturing 8.6 per cent of the total.

To meet this growing demand, KTG Industrial has launched a new phase of its Yen Phong IIC, Bac Ninh project, with plans to welcome tenants in Quarter 1, 2025. This expansion offers modern factories, providing a prime opportunity for foreign investors to establish or expand their manufacturing operations in Vietnam.

As of August, disbursed FDI has risen by 8 per cent on-year to about $14.15 billion.

Source: VIR

The S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI®) posted 52.4 points in August, down from 54.7 points in July but still signalling a solid monthly improvement in business conditions midway through the third quarter. Operating conditions have now strengthened in each of the past five months.

The improvement in the health of the manufacturing sector reflected further rapid increases in output and new orders, with the respective rates of expansion remaining sharp despite easing from the particularly elevated rates seen in June and July.

Improvements in customer demand resulted in growth of new orders, with firms raising production accordingly. In some cases, relative stability of prices helped firms to secure new business, while there were also mentions of improving international demand. New export orders rose for the fifth month running.

The relatively stable price situation was also signalled by data on input costs and selling prices. While both continued to increase, rates of inflation slowed markedly from July to the weakest in four months.

Some manufacturers reported higher raw material prices, but the rate of inflation slowed amid signs of competitive pressures. Meanwhile, lower oil prices acted to reduce transportation costs in some cases.

Strong growth of new orders and softer cost pressures led manufacturers to increase purchasing activity sharply during August. Moreover, the rate of growth quickened for the fourth month running to the fastest since May 2022.

Purchased inputs were often used directly to support production, meaning that stocks of purchases continued to fall. Stocks of finished goods were also down as inventories of completed products were delivered to customers to satisfy order requirements.

In contrast to the picture regarding purchasing activity, manufacturers recorded a drop in employment for the first time in three months amid resignations and the ending of temporary contracts.

The drop in workforce numbers at a time of rising new business meant that backlogs of work continued to accumulate in August. Outstanding business increased for the third month running, with the rate of expansion unchanged since July.

Manufacturers remained optimistic that output will increase over the coming year, based on expectations of further improvements in customer demand and new orders. Sentiment dropped for the second month running, however, and was the lowest since January.

Andrew Harker, economics director at S&P Global Market Intelligence, said, “As expected, the Vietnamese manufacturing sector saw a slowdown in growth of output and new orders from the particularly elevated rates seen in June and July. Those increases were always going to be hard to sustain and rates of expansion remained marked, so there is little cause for concern on that front. One issue firms are facing is a drop in employment, which is making completing projects more difficult and adding to outstanding business. We will hopefully see a return to job creation in the coming months.”

“The news was better in terms of inflation, with both input costs and output prices rising at much weaker rates in August. In fact, this was reportedly a factor contributing to sustained new order growth. Overall, the sector continues to enjoy a strong second half of the year so far, with plenty of work to get through in the months ahead,” he added.

Source: VIR

According to Secretary of Dong Nai Party Committee Nguyen Hong Linh, there are five challenges the province will face. These include sourcing qualified workers, completing transport infrastructure and airport urban infrastructure, developing products and services for flight operations, environmental issues and economic security, and tackling high-tech crime.

Roads connecting the airport remain behind schedule, and a planned high-speed rail link and urban railway projects are facing issues in terms of capital and technology, so construction has yet to start.

“If we do not promptly upgrade and expand the transport infrastructure connecting the airport, it will lead to serious problems,” Linh said.

In addition, educational institutions in the province are unable to provide the skilled workforce the airport requires, posing the risk of a lack of trained staff.

Dr. Nguyen Thi Hai Hang, director of the Vietnam Aviation Academy, said that Long Thanh needs a large, skilled workforce, but this cannot be achieved overnight. The lack of specific policies for airport urban development is also a big problem.

In many countries, airport cities often enjoy special incentives, but in Vietnam, legal regulations in this field are still unclear, causing difficulties in management and hindering investment attraction. There is a distinct possibility that the airport could speed up the urbanisation of Dong Nai so rapidly that it spirals out of control, creating security complications.

Take advantage of opportunities for economic development

Assoc. Prof., Dr. Tran Dinh Thien, former director of the Vietnam Institute of Economics, said that the southeast region has many advantages, especially Long Thanh, so these issues need to be resolved.

The southeast region attracts the strongest investment in the country and has real potential, but there are many bottlenecks that need to be resolved.

“Tan Son Nhat Internationla Airport in Ho Chi Minh City is overloaded, causing congestion in many areas. Long Than was designed to alleviate this issue, so upgrades to connecting roads are vital,” Thien said.

Vo Tan Duc, Chairman of Dong Nai People’s Committee, admitted that after a period of strong growth, Dong Nai is facing many bottlenecks.

However, Duc said he believed that the airport will open a new opportunity to connect the province with the region, the country, and the world.

“Dong Nai will make Long Thanh the centre of its logistics and urban area development. It will become a modern, civilised province, which is why we have implemented planning and construction to maximise the efficiency of the airport,” Duc said.

The region is relying on Cai Mep Port and Long Thanh Airport to drive this growth, and Dong Nai is likely to be the biggest benefactor, but only if the province can take advantage and grab the forecast investment wave, he added.

Long Thanh International Airport is one of the 16 most anticipated airports in the world, aiming to become an international transit centre while creating a new space for Dong Nai to develop.

The airport is designed to handle 100 million passengers and five million tonnes of cargo per year. The entire project is expected to cost about VND336.6 trillion ($16 billion). Phase 1 includes runways, terminals, and auxiliary items capable of handling 25 million passengers per year and scheduled to open in 2026, when it will need more than 13,700 qualified workers from high school to post-grad.

The passenger terminal at Long Thanh International Airport is expected to be finished by August 2026

Source: VIR

Southeast region may gain specialised FDI policies, Photo: VNA

The Ministry of Planning and Investment (MPI) is collecting opinions of ministries and localities in the southeast region for the draft plan to implement the region’s master plan towards 2030 and beyond.

The MPI is also completing a drafting report which proposes specific policies for socioeconomic regions, which will then be sent to ministries, branches, and localities for comment.

“The proposed policies are truly tailored to exploit the region’s potentials and strengths, addressing development bottlenecks to achieve the objectives set by the Politburo,” Minister of Planning and Investment Nguyen Chi Dung said at the fourth meeting of the Coordinating Council for the Southeastern Region in Ho Chi Minh City on over a week ago.

“In particular, in addition to the policies proposed to be applied generally across the country, the southeast region has proposed several specific policies, such as on industrial park development, increasing industrial land quotas, and on priority industries and occupations to draw in strategic investors,” Minister Dung said.

At the meeting, the Ministry of Science and Technology reported on the implementation to establish and promote innovation and startup centres in Ho Chi Minh City and its neigbouring provinces of Binh Duong, and Dong Nai.

The Ministry of Information and Communications also reported on the implementation of a dynamic IT industrial zone, attracting investment in the production of electrical and electronic products as well as AI in Dong Nai, Binh Duong, and Ba Ria-Vung Tau provinces.

Localities in the southeast region are proactive in completing modern infrastructure for socioeconomic development and high-quality investment attraction. In terms of logistics services, Ba Ria-Vung Tau is promoting the construction of a free trade zone connected to the seaport in the Cai Mep Ha area and Cai Mep Ha Logistics Centre in Phu My area.

Morover, the Ministry of Finance and the General Department of Vietnam Customs are developing a circular for piloting open ports, aiming to optimise operational capacity, maximise berth usage, and reduce logistics costs for import and export goods.

Secretary of Ba Ria-Vung Tau Party Committee Pham Viet Thanh told VIR that good planning will create better development space, strong investors, and solid projects.

“The work of building and implementing planning is a significant task; thus it is necessary to take advantage of this opportunity to create space for growth and investment attraction, remove bottlenecks, and create new development drivers, combining the implementation of transport infrastructure, transformation, and public administration capacity,” Thanh said.

At the same August 10 meeting, Prime Minister Pham Minh Chinh asked those involved to review legal bottlenecks to propose amendments, especially those in the Public Investment Law, speed up public investment disbursement, and use public investment to entice private funding.

“It is important to foster the traditional growth drivers of investment, export, and consumption, along with the new ones, including innovation, science-technology, green transition, digital transformation, and new industries like semiconductors, AI, and cloud computing,” PM Chinh said.

In particular, completed infrastructure is an important factor to engage and retain investors. Nobuyuki Matsumoto, chief representative of the Japan External Trade Organization in Ho Chi Minh City, said that Ba Ria-Vung Tau is one of the localities that the organisation recommends businesses to invest in.

“This locality has many advantages, such as having Cai Mep – Thi Vai Port and the under-construction Long Thanh International Airport,” Matsumoto said. “It is rich in oil and gas resources and has a liquefied natural gas warehouse, as well as a stable electricity supply. Besides that, it is located next to Dong Nai and Binh Duong – two provinces with many factories, ensuring the stability of the supply chain.”

In the first seven months of this year, Ba Ria-Vung Tau led the country in foreign direct investment attraction with over $1.54 billion, exceeding the number for the whole of 2023, according to Ba Ria-Vung Tau Department of Planning and Investment. New projects in the province operate in the sectors of biology, electronics, and high technology.

Meanwhile, projects in Ho Chi Minh City and of Binh Duong and Dong Nai also use advanced and environmentally friendly technologies, while being less labour-intensive and boasting high productivity.

Statistics from Dong Nai Industrial Zones Management Authority also note that newly-licensed projects in the province are mainly in semiconductors, electrical components, electronics, and mechanical engineering.

Statistics published by the Foreign Investment Agency under the MPI showed that four of the top 10 localities with the largest foreign investment in the first seven months are in the southeast region: Ba Ria-Vung Tau, Ho Chi Minh City, Dong Nai, and Binh Duong. These four localities attracted $5.26 billion, accounting for 37.2 per cent of the whole capital influx in the top 10 and just over one-third of the capital amount in the whole country.

Source: VIR