Hong Kong Industrialist - March 2019

64 | 03/2019 Recently, foreign-invested companies have formed the backbone of Vietnam’s economy. The value of new foreign investment in Vietnam almost doubled in only 6 years from 2013 to 2018. Last year, FDI sector account for 70% of total export value of Vietnam - a 14.1% year-on-year increase. Asides from the somewhat overly familiar destination such as Ha Noi or Ho Chi Minh city, Hai Phong – a port city in the North of Vietnam – set itself as one of the top performers in term of FDI attraction. In 2018, the city recorded 3 billion USD of new foreign investment, ranked third in the country only following the Ha Noi and Ho Chi Minh city. Hai Phong also has the highest GDP growth rate in Vietnam at 17% in 2018. This trend is attributable to multiple reasons. The trade relationship between US and China has been deteriorating, leading to increased number of international investors adopting “China Plus One” strategy to mitigate the exposure. Many of them chose Hai Phong as their “Plus One” not only for general cost- Foreign investment in Vietnam -effectiveness factor but also for its advantageous geo-economic location. Logistically speaking, from Hai Phong there are shipping lines connecting Asia, Europe and America, making it possible to reach a market of 3 billion people within a 3000 km radius. Due to the proximity to China, the port of Hai Phong is also the only port in Vietnam that is included in One Belt One Road Initiative. And with Vietnam being a member to many international association and free trade agreements, investors also can have access to a market of 68% of the world population with the lowest trade tariffs. While these are the opportunities for Hai Phong, and it is the country ‘s massive investment in comprehensive infrastructure development and the experienced industrial zone developer that capitalizes and makes these opportunities actually attractive to foreign investors. Major infrastructure developments 100,000 DWT Lach Huyen Deep Sea Port Despite being known as the major port in Northern Vietnam, the draft in Hai Phong port used to be less than -10m, which is only acceptable for 20,000 DWT vessel. It was changed after the construction of Lach Huyen Port – an entirely new deep-sea port – was announced in Hai Phong in 2013. Lach Huyen port has a draft of -14m, enabling vessels of up to 14,000 TEU – seven times that of the existing Hai Phong port and comparable to the draft of Hong Kong in the past. With the first two berths taken into operation since May 2018, shipping times are now substantially reduced for shipments to Europe and US, thanks to avoidance of transshipment via new direct routes in addition to the already established intra-Asia ones. DEEP C Industrial Zone adjacent to Hai Phong port HAI PHONG AND DEEP C INDUSTRIAL ZONES DESTINATION FOR INDUSTRIAL DEVELOPMENT IN VIETNAM