Vinh Phuc: Breakthroughs in investment attraction and industrial development

30/10/2020

Having favorable geographical location, open mechanisms and policies, over the past years, Vinh Phuc continues to be one of the leading provinces in investment attraction having developed industry and ranking the 12th about GDP per capita and in the top 20 provinces and cities having the largest number of enterprises in the country.

Investment attract capital far beyond the target

The Resolution of the 16th Provincial Party Committee's Congress set out 19 socio - economic targets, including new targets of attracting USD 1.3 - 1.5 billion from FDI and 14,000 - 15,000 billion dong  from DDI; increasing the proportion of industry - construction to 61.5% in the economic structure, services to 31.4%, agriculture, forestry and fisheries down to 7.1%.

In order to achieve these goals, the Provincial Party Committee, People's Council, and Provincial People's Committee have been drastic in directing and organizing the implementation of the Central's directives and resolutions, especially the Government's Resolution No. 19 on continuing to perform major tasks and solutions to improve the business environment and enhance national competitiveness. At the end of 2016, the Provincial Standing Party Committee issued Resolution No. 01 and the Provincial People's Committee issued the Project on improving the investment environment and enhancing competitiveness of Vinh Phuc province in 2016-2020. The Provincial People's Council issued Resolution 57 on specific measures to attract investment and support business development in the province, Resolution No. 45 on some specific support measures for households and individuals when the State acquires agricultural land to implement the planning for construction of high-quality tourism and service urban areas in the regions having difficulties in economic restructuring in Vinh Phuc in 2016 -2021.

On the basis of the general urban planning of Vinh Phuc until 2030, with a vision to 2050, the province planned 50 industrial zones and clusters with an area of over 5,897ha located along national highways convenient for traffic. Along with that, approving a list of 79 projects calling for investment in the form of direct investment or public-private partnership (PPP) investment, focusing on the areas of socio - economic infrastructure development, high-tech industries, supporting industries, tourism – services and high-tech agriculture. Promoting the reform of administrative procedures in the direction of reducing procedures and processing time; well operating provincial, district public administrative centers, one-stop shop, inter-door one-stop shop. Prioritize investment resources for infrastructure construction, improving investment environment, promptly remove difficulties and problems, create all favorable conditions for enterprises according to the motto "All investors to Vinh Phuc are citizens of the province".

In terms of investment promotion, since 2014, the Provincial People's Committee has assigned the Planning and Investment Department and specialized agencies to build specific and detailed investment promotion plans for each year; regularly update information, supplement database to serve investment promotion activities.

Every year, leaders of the Provincial People's Committee, leaders of specialized agencies attend conferences, forums, signing ceremonies, and meetings with foreign investors organized by ministries and agencies to introduce, promote the investment and business environment; build, connect to foreign organizations; organize effectively investment promotion programs. Along with that, well implement the activities of taking care of in-palce investors, improve the quality of investment promotion in traditional markets and target the markets of countries and regions with strengths in science - technology such as: USA, Sweden, Italy, Australia ....

Especially, businesses are identified as the driving force for the development, as a service target, over the past 5 years, the province has always created favorable and equal conditions for all businesses in accessing land; investing in infrastructure of electricity, water and communication to the fences of industrial parks; strengthen vocational training to serve the recruitment needs of businesses. At the same time, step up administrative reform, regularly organize business meetings and dialogues in order to grasp and promptly resolve difficulties and problems for enterprises.

By strongly improving the investment environment, since 2011, Vinh Phuc has attracted 383 new FDI projects, adjusted to increase capital for 279 projects, with a total value of USD 4,486 billion; granted new investment certificates to 396 projects and adjusted to increase capital for 108 DDI projects with a total value of VND 81,450 billion. In particular, in 2015 - 2020 attracting USD 3.12 billion of investment capital from FDI projects, over VND 60,000 billion of investment capital from DDI projects, 4 times higher than DDI capital attraction and higher than 2.1 times on FDI attraction compared to the target set by the Resolution of the XVI Provincial Party Congress.

Accumulated to the end of 8/2020, the province had 1,145 investment projects, including 447 FDI projects, the total registered capital of USD 6,039 billion; 796 DDI projects with over 96,560 billion dong. FDI projects come from 18 countries and territories, mainly investing in the processing industry, manufacturing of electronic components, auto parts, motorcycles, mechanics, in which, South Korea ranks the first place with had 207 projects with a total investment of USD 2,207 billion. The following positions are Japan with 47 projects valued at VND 1,169 billion; Taiwan 37 projects with over USD 943 million. About DDI projects, in 2011 - 2020, Vinh Phuc has attracted many investment projects in the fields of commerce and services.

According to the report on investment attraction results in 2011-2020 of the Planning and Investment Department, direct investment has contributed increasingly to social investment capital and is an important factor to promote the economic growth, increase the provincial budget revenue. It is estimated that in 2011-2020, the total implemented investment capital of FDI projects has reached USD 2.66 billion; DDI projects about VND 27,122.6 billion, accounting for 32% of the total social investment capital of the province, equivalent to VND 261.56 trillion. In particular, direct investment projects have contributed over 75% to the value of industrial production, over 70% to State budget revenue and created jobs for about 137,000 workers, contributing to the growth rate. Average economic growth in the 2016-2019 period is approximately 7.1% / year.

Industry - the driving force for economic development

From the point of view: "Taking industrial development as the foundation, service - tourism development is the spearhead and considering agricultural, rural development as an important task", Vinh Phuc has stepped up planning of regions, branches and sectors; issue and adjust the industrial development plan of Vinh Phuc province to 2020, with a vision to 2030; industrial cluster development plan of the province to 2020, vision to 2030 suitable for each period.

Along with that, be proactive in land fund, investment in infrastructure development, especially transport infrastructure in industrial parks and industrial clusters, creating favorable and equal conditions for businesses to access the resources of land, water and electricity infrastructure, communications, tax incentives, capital, training and labor recruitment. Promote the reform of administrative procedures, create an open, attractive and highly competitive investment and business environment to attract domestic and foreign investors.

In addition to well implementing the central investment incentive mechanisms and policies, the province has applied many specific preferential policies for investors and businesses such as: applying 10% to the business revenue tax rate within 15 years for enterprises in the high-tech fields such as software production, renewable energy production, clean energy, energy from waste destruction, production of composite materials. rare and precious materials; apply corporate income tax of 20% for a period of 10 years for high-end steel production projects, machinery and equipments for agricultural production or depending on industries, projects, businesses that can enjoy tax exemption, reduction of corporate income tax for 2 to 4 years and 50% reduction of payable tax amount for the next 4 to 9 years can be applied. Exemption from import tax, land rent exemption or reduction are applied in some cases.

Selective attraction of investment projects and timely support policies have helped Vinh Phuc far exceed the target of enterprise establishment. Until the end of 8/2020, the whole province had nearly 13,000 businesses, up 3,000 businesses compared with the Resolution of the XVI Provincial Party Congress; 17/32 industrial clusters have been formed, with a total area of over 358ha; 8/12 industrial parks have been put into operation by infrastructure investors, including: Kim Hoa industrial park, Khai Quang, Binh Xuyen, Ba Thien, Ba Thien II, Binh Xuyen, Binh Xuyen II and Thang Long Vinh Phuc. The occupancy rate of industrial parks reaches 63%, of which, the occupancy rate of Binh Xuyen, Kim Hoa, Binh Xuyen II industrial zones in phase 1 reaches 100%; Khai Quang industrial park has occupancy rate 98% and Binh Xuyen 85%. The growth and proactive spirit of overcoming difficulties of the business community, especially within 9 months of striving to perform the dual task of "fighting against epidemics and promoting production and business" helped industrial production to maintain the stable growth and confirmed to be the driving force for economic growth, to move the economy in the right direction. It is expected that by the end of 2020, the proportion of industry - service will account for 86.5%, up 3.7% compared to 2015; agriculture, forestry and fisheries accounted for 6.8%, down 3.7% compared to 2015. According to the report of the Provincial People's Committee, in the period of 2015-2020, the growth rate of industry - construction reached 12.15% / year, nearly double the target of the Resolution of the XVI Provincial Party Congress and always higher than the economic growth rate, accounting for 65% of the province's overall growth. In particular, the processing and manufacturing industry always accounts for a high proportion in the industrial structure and accounts for 4.5% of the added value of the entire manufacturing industry of the country.

Many key industrial products kept a good growth rate, of which, electronic component production accounted for nearly 48% of industrial production value and led the list of export products of the province. Supporting industries are formed and developed, especially supporting industries for mechanics, manufacturing and electronics - informatics, contributing to improve the localization of products, bringing the rate of state budget revenue / GRDP in the period of 2016-2020 to 30.38%, exceeding the target set out in the Resolution.

Efforts for new goals

The socio - economic development project of Vinh Phuc province for the period of 2021 - 2025 sets the target that by 2025, Vinh Phuc will become one of the industrial, service and tourist centers of the region and the whole country; promote the development of production and business advantages of each region, ensure sustainable, comprehensive and continuous economic growth.

Each year, strive to attract about USD 400 - 500 million of investment capital from FDI projects, from VND 5,000 - 6,000 billion from the investment capital of DDI projects; the average GRDP growth rate will reach 8.5-9.0% / year; 2025, industry and construction will account for 61.5-62%, services 32-32.5% and agriculture, forestry and fishery 6.0 - 6.5%... To achieve these goals, Vinh Phuc will continue to create favorable conditions for production and business activities to develop. Strengthen the innovation of investment attraction activities, harmonize the interests of the State, investors and people; improve the quality of projects to attract new investment in the direction of increasing the content of technology and technical labor; priority is given to attracting the professions that are ahead of the industrial revolution 4.0 such as: ICT industry, digital, nano-engineering, biotechnology, environmental friendly new materials, making a great contribution to socio - economic development; projects potentially participating in global value chains; projects in the fields of electronics industry, telecommunications, mechanical industry, building materials, new materials and supporting industries of automobile, motorcycle, and electronics manufacturing and assembly; infrastructure development projects for industrial parks, tourism and service projects, international-class universities, and investment projects in the service sector such as finance, banking, insurance, health care, and education - training.

Along with that, focus on attracting investment projects to industrial zones and clusters that have been planned and built mainly in Phuc Yen city and Tam Duong, Vinh Tuong and Yen Lac districts. Form industrial axes along key traffic routes, including: Industrial axes along the corridor of National Highway 2; North-South industrial axis along the corridor of road 310; the industrial axis in the North-South direction along National Highway 2C and the industrial axis associated with the trans-Asia highway (Hanoi - Lao Cai). Call for investment projects in the mining industry, mineral processing, production of construction materials, textiles, footwear, production of packaging for export ... in the area of Song Lo district, Lap Thach district.

In the period of 2020 - 2025, Vinh Phuc will build and complete a policy of selective investment attraction. Continue to maintain markets in traditional countries of Japan and South Korea. At the same time, expand input promotion activities to industrialized countries in the world such as the United States, Canada, France, Germany, Italy, UK... For in-place investment promotion, the Provincial People's Committee directs departments, branches and localities to continue to carry out activities to support business development, improve the business investment environment, and enhance competitiveness at the provincial level in the spirit of the Government's Resolution No. 19 on the main tasks and solutions to improve the business investment environment, and enhance national competitiveness; Resolution No. 01 of the Provincial Party Committee and Provincial People's Committee's Scheme on improving the investment environment and enhancing the provincial competitiveness index. Annually organize investment promotion conferences in other provinces or cities; maintain a regular dialogue mechanism between leaders of the Provincial People's Committee, departments, sectors, and sectors with businesses and investors. Continue to reform administrative procedures, create transparency, health and fairness, in which all administrative procedures for investment activities will be simple, compact, and will not increase costs for investors.

Thanh Nga

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