Ho Chi Minh City wants to "fly with the eagles"

Ho Chi Minh City plans to introduce a “one-stop” management of investment procedures at one focal point, thereby striving to attract about 50 high-tech FDI projects in 2024-2025, while increasing the number of the world’s largest multinational corporations investing in the locality by 50%.

Lack of advantages to attract billion dollar projects

According to the Ho Chi Minh City Statistics Office, by the end of 2023, the total registered foreign direct investment (FDI) capital in the area reached more than 5.85 billion USD, accounting for 16% of the country's total FDI capital and growing strongly at 48.5% over the same period in 2022.

Ho Chi Minh City speeds up infrastructure completion to increase FDI attraction

FDI attraction results in the past year have made Ho Chi Minh City a bright spot among provinces and cities across the country. However, researchers from the Banking University of Ho Chi Minh City also pointed out the limitations in the competitive advantages between localities in attracting FDI capital. The value of FDI capital attracted by the city is decreasing compared to previous years and the ability to attract large projects is lower than that of Hanoi, Hai Phong, Binh Duong and the provinces of Quang Ninh and Bac Giang.

Specifically, in 2023, Ho Chi Minh City's export processing zones and industrial parks attracted 16 new FDI projects with a total registered capital of 63 million USD. In the years 2017-2022, the whole city had only 3 large-scale projects selected by FDI investors, including: Techtronic Tools' 650 million USD project-2019; Wanna Explore's 300 million USD project-2019; and Samsung's 841 million USD capital increase project in 2022. Meanwhile, Binh Duong, Long An, Hai Phong... respectively attracted projects from 1-3 billion USD from large foreign corporations.

Experts say that there are many reasons why the city has lost its advantage in attracting FDI. The most prominent of these is that the industrial land fund is increasingly narrowing and facing many obstacles in the process of site clearance. According to statistics, by the end of 2023, the city still has 15,000/60,000 hectares of industrial land with legal and site clearance problems. Meanwhile, local projects expected to attract FDI are mainly in the fields of processing and manufacturing; science and technology; information and communication; and real estate business. These fields all require large land funds for long-term investment.

A representative of the Vietnam Federation of Commerce and Industry (VCCI) said that in the period 2017-2022, the Provincial Competitiveness Index (PCI) of Ho Chi Minh City has continuously decreased. In 2022, the city ranked 27th in the national PCI rankings, down 10 places compared to 2017. Meanwhile, Quang Ninh continued to lead, Bac Giang rose from 30th to 2nd, Hai Phong from 9th to 3rd. This shows that the city has not made many improvements in the business environment and administrative reforms to create favorable and friendly conditions for foreign investors.

Need commitments to “fly with the eagles”

In order to regain its position as the "locomotive" in attracting FDI capital, in January 2024, Ho Chi Minh City issued a Project to improve the efficiency of FDI attraction in the period of 2023-2025, with a series of solutions including: Completing infrastructure planning, perfecting investment incentive policies and mechanisms, and setting specific goals in retaining and attracting more of the world's largest multinational corporations.

Mr. Nguyen Anh Thi, Head of the Management Board of Ho Chi Minh City High-Tech Park (SHTP), said that this unit has proposed that the City People's Committee re-establish the "one-stop" mechanism in granting investment licenses. The city's leaders also committed to bringing investment procedures to a single point in the near future. In particular, investment projects in SHTP and export processing zones - industrial parks will be handled by the management boards. For enterprises investing outside this area, the Investment and Trade Promotion Center (ITPC) will continue to be assigned to carry out from promotion to implementation.

Accordingly, in 2024-2025, Ho Chi Minh City will aim to attract 50 high-tech projects with a total capital of over 3 billion USD. By 2030, the number of multinational corporations in the group of 500 largest corporations in the world (ranked by Fortune Magazine - USA) with a presence and operation in the city will increase by 50%.

According to the research team of Banking University of Ho Chi Minh City, to achieve these goals and at the same time improve the efficiency of FDI capital, local authorities need to make commitments to "fly with the eagles".

In addition to focusing on expanding Pham Van Hai I, II industrial parks and completing the connection of major infrastructure projects such as Metro Line 1, Ring Road 3, Thu Thiem Bridge 4... From there, it is necessary to apply specific incentive policies to build new, more attractive FDI attraction policies.

Economic experts believe that Ho Chi Minh City still has the most advantages in Vietnam in technology transfer activities of foreign investors. Therefore, preferential policies and investment incentives need to continue to provide regulations to support research and development (R&D); support improving the quality of human resources to serve technology transfer and participate in the supply chain. In addition, the city also needs to proactively guide the practice of technology transfer, update and simplify legal procedures to facilitate international corporations to connect with suppliers and supply chains in Vietnam.

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