In the past two years, businesses and investors from many countries and territories around the world have been making innovations. They see Southeast Asia in general and Vietnam in particular as a destination with great potential. This is an opportunity for Hai Phong city to act effectively to catch this wave of investment shifts.
New shift – Inevitable trend
Trade tensions between the world's major economies that started around 2018 and have continued until now are shaping a trend of shifting part of investment and production from China to other countries to avoid risks. risk according to the formula "China +1" (China Plus One). Besides, the Covid-19 epidemic has also become a strong catalyst to speed up this process. The explanation for this change can also be mentioned as production costs in China are increasing and China's industrial orientation is now shifting to production for domestic consumption and service development. At the same time, investors also need to diversify the market, "put their eggs in many baskets" to spread risks.
Especially in Southeast Asia, Vietnam currently has a great advantage to catch the wave of migration and attract FDI capital thanks to low production costs, being able to compete with countries in the region. If compared with Indonesia, Malaysia, Thailand..., land rental prices in Vietnam's industrial parks can be 40 - 50% cheaper and worker salary costs are 50% to 60% lower. In addition, the corporate income tax rate of 20% is also not higher than other countries in the region. Not to mention, when investing in industrial parks and economic zones in Vietnam, businesses also enjoy many tax incentives for a long time.
That's why, in the past two years, many "giants" in the fields of electronics and high technology have made strong investment moves towards Vietnam. In 2021, LG Group has twice increased investment capital in LG Display Factory. In 2022, Samsung Group has decided to invest an additional 3,3 billion USD. Foxconn Group, after investing an additional 270 million USD, plans to add an additional 300 million USD to expand its operations. One of the other famous electronics corporations, Apple, has moved 11 supporting factories from other countries to Vietnam. Accordingly, it is estimated that by 2025, our country will produce 20% of iPads and Apple Watches, 5% of Macbook products and 65% of Apple's Airpod products.
Meanwhile, in areas with many electrical, electronics and high-tech investors, the total amount of foreign investment capital to China in 2022 is estimated to decrease by 15 - 20% over the same period last year. 2021. It can be clearly seen that FDI capital sources in the world are looking for new destinations, posing a problem for localities in Vietnam, including Hai Phong, to focus on quickly seizing this opportunity in attracting invest.
Seize opportunities, roll out the carpet for investors
Accumulated until the end of October 10, Hai Phong currently has 2022 foreign investment projects with a total capital of 947 billion USD. Of which 24,5% of the capital is located in industrial parks and economic zones. To catch the wave of shifting supply chains and attracting FDI capital, the city government and functional agencies are focusing on solving this problem with many effective measures.
Firstly, investment promotion is promoted in a proactive, modern and effective direction. In recent times, there have been many conferences, seminars, working programs, meetings, contacts, and information exchanges with organizations, associations and businesses from countries that have been approved by the City People's Committee. and relevant departments, divisions and branches organize implementation. These include large business organizations such as the European Business Association in Vietnam (Eurocham), the Taiwan Electrical and Electronics Business Association (China) - TEEMA, and the Supporting Business Club. of LG Group (Korea)... concentrates many high-tech manufacturers. Investment promotion programs are implemented systematically and substantively, creating useful opportunities to provide information to investors and connect with the city's agencies and businesses. Thereby, the image of Hai Phong city as developed, hospitable, safe and with a potential investment environment with many incentives has been spread to hundreds of global businesses.
Not only stopping at waiting and welcoming investors to the city, directly and proactively implementing investment promotion activities abroad also brings better results. Specifically, in August 8, the working group of the People's Committee of Hai Phong city carried out a series of investment promotion activities in Seoul (Korea); Successfully organized investment promotion seminars with Korean businesses and supporting businesses of LG Group. Next, in October, working programs on the city's investment environment were successfully organized by units in collaboration with TEEMA Association and Pegatron Group in Taipei City, creating opportunities for networking. connect and exchange information, answer many concerns for more than 2022 businesses here. The city's proactive promotion of direct investment in potential countries and territories always receives the attention and appreciation of foreign businesses and investors; Improve the ability and quality to attract FDI into the city.
LG Display factory in Hai Phong
Second, strengthen internal resources and resolve issues of concern to investors. Through investment promotion activities, many concerns and concerns of foreign investors have been raised, with a focus on infrastructure, preferential policies and human resources.
For example, in the field of high-tech manufacturing, investors are very interested in technical infrastructure suitable to their production characteristics, especially about possible negative impacts on the environment. surrounding environment or expressed concerns about telecommunications infrastructure connections in industrial parks. Regarding such issues, city representatives answered clearly and affirmed that Hai Phong has enough conditions to meet production needs. However, for issues raised by many investors, the city needs to pay attention and prioritize consolidation and development to be ready to respond.
In addition, the issue of human resources to meet the needs of large-scale production and high quality human resources is also frequently mentioned by businesses. From there, it shows that the city needs to focus highly on developing human resources, ready to serve, and this requires more active and proactive participation of all universities, vocational schools, and training institutions. created in the city.
Receiving and discussing issues of concern to investors is an opportunity for Hai Phong city to know what investors want, focus on, or what barriers and concerns they still have to move forward with investment activities. city. Thereby, the city and infrastructure and service businesses can quickly expand, upgrade, improve and prepare resources to be ready to welcome FDI enterprises.
Third, improve the efficiency of attracting investment through active FDI enterprises. There is no promotion or introduction of the investment environment that is as effective and reliable as specific evidence from successful FDI enterprises in Hai Phong. When coming to a new country to invest, reviews, comments, and results from "compatriot" businesses with many similarities in nature and culture in operations will have a great impact on investors. new investment.
In addition, in Hai Phong there are many large FDI enterprises with high influence in the industry. For example, Pegatron Group, which currently produces 30% of components for Apple products, recently increased its capital by 300 million USD, bringing the total capital to 800 million USD. Accompanying the expansion of production activities will be an increase in demand for the supply chain and accompanying supporting units. From there, Pegatron Group's supporting units will consider Hai Phong as the top priority location for investment when coming to Vietnam. Another typical example is LG Group in Trang Due Industrial Park, which has formed a network of more than 50 satellite businesses with a total investment of nearly 1 billion USD.
Therefore, the city government and functional agencies continuing to pay attention, support and accompany FDI enterprises operating in Hai Phong city will indirectly bring high efficiency in promotion. invest. Currently, FDI enterprises in the city always receive special support and attention. Recently, Hai Phong reserved 48 hectares of land in Dinh Vu - Cat Hai economic zone for investors to implement projects to build social housing and worker housing.
Thus, the growing wave of supply chain shifts and investments will open up many great opportunities. With great advantages and potential, we need to proactively grasp opportunities and promote investment attraction measures to bring this FDI capital flow to Vietnam in general and Hai Phong in particular. To achieve that goal, both authorities and organizations and businesses need to share and coordinate closely to comprehensively evaluate all related issues to then build plans and corresponding solutions. effective response.
Sources: heza.gov.vn