Hanoi Focusing on FDI of High Quality

By June 30, 2014, Hanoi had attracted investments from 61 countries and territories with 2,950 projects and total registered capital of US$25.7 billion, including 2,806 existing projects and investment capital of US$21.1 billion with implemented capital of some US$10.9 billion (around 51.6 percent).

 

In the last 6 years since Hanoi is expanded (2008), the city has attracted 1,614 new projects with registered capital of US$7.2 billion and 446 projects expanded with increased investment capital of some US$3 billion. On the average, each year, the city attracted 343 new projects and investment capital of some US$1.7 billion.

 

In comparison with the period before 2008, since the expansion of the city, Hanoi attracted fewer projects (343 projects/year compared with 446 projects/year), but exceedingly increased in size (US$1.7 billion/year compared with US$763 million/year). South Korea ranks first with 812 projects and registered capital of US$4.69 billion (accounting for 29.26 percent in projects and 22.1 percent in capital). Japan ranks second with 569 projects and registered capital of US$4.51 billion (21.3 percent of total investment capital in the city).

 

While in the past big investment projects focused on industry (60 percent of total FDI), at present, as all industrial zones have been fully occupied, the investments shift to real estate (some 39 percent of FDI), telecom and IT (32 percent), trade, water treatment and environment (4.6 percent), and industry, with expansion of some big enterprises (only 5.9 percent).

 

The development is fully in line with the orientation of the city, attracting FDI projects in infrastructure, services, high technology, source and clean technologies for sustainable development and high added value in order to promote domestic production and services.

 

With the role of the politico-economic-cultural centre of the country, FDI attraction for Hanoi socio-economic development in the years to come should satisfy all three tasks: (1) sustainable development, ensuring political stability, social security, healthy culture and biosphere; (2) fast economic development, creating driving force of regional and nation-wide economic development; (3) effective development in economy, society and environment.      

On the basis of socio-economic development strategy, the city will attract FDI in major sectors to promote technology transfer, especially hi-tech and source technology to increase export, create jobs, develop supporting industries, new products and services of high competitiveness as well as projects developing infrastructure.

 

FDI in the world comes mostly from transnational corporations (TNCs ) and produces strong impact on recipient countries. Therefore, attraction of TNCs should be done in both ways: developing big projects of high technology to promote export, and encouraging TNCs to establish research centres, incubators and human resources development. In the coming years, the city should upgrade infrastructure and promote investments in Hoa Lac Hi-tech Park, South Hanoi Supporting Industry Park (HANSSIP), Bio-hitech Industry Zone and some other industrial zones and centres so as to develop supporting industries and sectors of high priority. Regarding major partners such as the US, EU members, East European countries, Japan and South Korea, there must be programmes to promote investments and lists of investment projects to attract FDI from those partners. In nation-wide FDI projects listed to 2020, Hanoi has more projects such as Hanoi Ring 3 Highway, Mai Dich – Thang Long section of US$205 million; Urban Railway No. 6, Hanoi centre to Noi Bai, of US$1.35 billion; Song Da Water Supply Phase II, of US$300 million; and Nam Son solid waste treatment project, of US$210 million and hi-tech waste treatment project of US$150 million. In the years to come, Hanoi will make greater efforts and take effective measures to improve the investment environment, attracting and making the best use of FDI to contribute more effectively to the industrialisation, modernisation and development of the capital city.