HANOI — With robust infrastructure development coupled with the drastic effort to improve the investment climate, Hanoi has made itself a magnet for capital influx and contributed significantly to promoting the country’s socio-economic development.
In 2008-22, the capital city attracted a total investment of VNĐ4.04 quadrillion (US$16.7 trillion) with an annual increase of 11.4 per cent.
Regarding foreign direct investment (FDI), Hanoi remains among the top destinations for the inflow. As of the end of 2022, the capital city has attracted more than 4,500 FDI projects with a total registered capital of more than $33 billion.
In the first 11 months of 2023, Hanoi attracted about US$2.7 billion of foreign direct investment (FDI) capital, an increase of 77.1 per cent over the same period in 2022, ranking fifth in Vietnam in attracting FDI, according to the Hanoi Department of Statistics.
They included a registered capital of $335 million from 378 new projects and an increased investment capital of $270 million from 157 existing projects.
Besides that, 299 foreign investors invested more than $2 billion by capital contributions or purchasing shares, including Japanese investor Sumitomo, buying shares of VPBank with a total value of $1.5 billion.
Hanoi expects to attract FDI capital of about $3.1 billion in 2023 and $3.15 billion in 2024.
According to economist Tran Dinh Thien, the increase in the FDI flow in Hanoi this year demonstrates the improved confidence of investors in the business environment of the capital city.
FDI capital flows into Hanoi in recent years have tended to increase, especially after Vietnam has participated in many bilateral and multilateral free trade agreements (FTAs).
New competitive advantages
The capital city is considered a safe, attractive and potential destination for foreign businesses and investors, driven by its competitive advantages gained from its robust infrastructure system, sustainable development orientations, abundant human resources, and potential market, as well as the local authorities’ reform efforts.
According to the Foreign Investment Agency, Ministry of Planning and Investment, foreign investors have invested capital in large cities with favourable infrastructure, such as Hanoi and HCM City.
Under its development planning, Hanoi has identified priority industries and fields to attract investment by the general development trend. That helps the city to participate in the global value chain and exploit its advantages.
The fields include the development of urban infrastructure and smart cities, supporting industries, information technology, research and development, tourism, financial-banking services, human resource training, and high-tech agriculture.
In recent years, Hanoi has always focused on developing a digital economy. The General Statistics Office’s report showed that in Vietnam, Hanoi is the leading locality in the information technology industry with revenue at about VND320 trillion, nearly 8,500 information technology enterprises, and two out of Vietnam’s five industrial parks for the information technology industry.
Therefore, many foreign-invested enterprises have highly appreciated the improvement of the business and investment environment of Vietnam and Hanoi in particular. That is a favourable premise for the companies to develop.
These businesses have also affirmed that they have chosen Hanoi to expand investment and company in the coming years, especially in the high-technology sector.
Recently, the Government has handed over the Hoa Lac Hi-Tech Park to Hanoi to manage. With synchronous infrastructure, Hoa Lac Hi-Tech Park has all the conditions to support investors in developing projects.
So far, Hoa Lac Hi-Tech Park has attracted 106 projects with a total registered investment capital of about VND86 trillion and $703 million. About 60 projects are in operation, creating jobs for approximately 14,500 skilled workers.
The capital city will continue to focus on speeding up the progress of elevated traffic projects and underground urban railways, including Ring Road No. 4 and Ring Road No. 5, by 2027.
The development of the infrastructure system and industrial and high-tech parks will be an essential factor in promoting the competitiveness of the capital city towards long-term and sustainable development.
Vice chairman of the People’s Committee of Hanoi Nguyễn Manh Quyen said the capital city is ready to support the investors in the development of investment and business activities.
The city continues to innovate in investment promotion, promoting investment promotion agencies’ role in luring investment and improving the business and investment environment.
In particular, the Capital Law is built to solve obstacles in attracting more resources for Hanoi, especially issues of mechanisms and policies attracting investment in high technology.
Industrial parks in Hanoi also need to renovate their infrastructure to attract more investors.
Meanwhile, the Hanoi Investment, Trade and Tourism Promotion Centre needs to perform investment promotion programmes, Quyen said.
Additionally, the relevant departments and branches must coordinate closely with the centre to provide information and support for the investors at home and abroad.
At the same time, the city also organises dialogues with local and foreign investors to remove difficulties and give them support.
