Southern economic locomotive selective in FDI attraction

Illustrative image (Source: VNA)

Provinces and centrally-run cities in the Southern Key Economic Zone are now more selective in attracting foreign direct investment (FDI) by giving priority to high-tech, environmentally-friendly and less labour-intensive projects.

Since the beginning of 2023, major economic and industrial hubs in the region like Ho Chi Minh City, and Dong Nai and Binh Duong provinces have worked to upgrade the quality of foreign investments.

Speaking at a working session with Japan's SMC Corporation on May 10, Director of Dong Nai province’s Department of Planning and Investment Nguyen Huu Nguyen said the locality is luring investment in clean, environmentally friendly technologies, and less labour-intensive projects.

Under a draft project on FDI attraction for 2023-2025, HCM City also set a target of raising the number of multi-national groups included in the list of the world’s 500 largest corporations by the US Fortune Magazine in the city by 50%.

The rate of firms using cutting-edge technologies and modern administration in HCM City is also expected to increase by 50% per year.

The southern largest economic hub will “roll out red carpet” for investors in e-commerce, logistics and retail, industries with high added values and AI-powered projects.

Tran Viet Ha, deputy head of the HCM City Export Processing and Industrial Zones Authority (HEPZA), noted that the city will work harder to improve its investment and business environment instead of capitalising on tax incentives.

Such FDI attraction orientations have received the warm response from foreign investors, as reflected through new large-scale FDI projects launched in the localities, using renewable energy.

Notably, Danish toy maker LEGO on November 3, 2022, began construction of an over-1.3 billion-USD factory in Binh Duong, which will be operated by solar energy.

Rajib Gupta, Chairman of the Indian Business Chamber in Vietnam, described the southern region as as magnet for foreign investors, noting that Indian investors are interested in IT, pharmacy, high-tech agriculture and renewable energy in the region.

In an effort to attract more high-tech projects, Becamex IDC Industrial Development and Investment Corporation of Vietnam and Singapore’s Sembcorp Development Ltd. in February 2023 signed a memorandum of understanding on cooperation in developing five green, smart, sustainable industrial parks in Vietnam within the next three years, including those in Binh Duong.

Gia Dinh Group and SEP Cooperative of the Republic of Korea (RoK) in April also inked another MoU on cooperation in building a “Net Zero” industrial cluster in Phu Giao district of Binh Duong province.

In Dong Nai province, most of new projects specialise in supporting, processing and manufacturing industries and use state-of-the-art technologies, said Director of the provincial Department of Planning and Investment Nguyen Huu Nguyen.

In the first quarter of this year, Dong Nai attracted seven projects worth 30.46 million USD in supporting industries, making up 58% of the total newly-registered capital in the province, he added./.