Hanoi remains leading economic spearhead

Tuesday, 2020-09-15 11:31:39
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Delegates learn information about the planning of Hanoi until 2030 at the ‘Hanoi 2020 – Investment and Development Cooperation’ conference. (Photo: Dang Anh)
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NDO - Hanoi has taken many measures to improve its business and investment environment over the past five years, turning the city into a dynamic economic hub, contributing significantly to the country's economic growth. This result helps Hanoi consolidate its position as a leading economic engine of the country, creating a driving force for the development of the Northern key economic region and the Red River Delta area.

Attracting large investment resources

Despite the effects of the COVID-19 pandemic in 2020, Hanoi remains an attractive destination for investors, as both domestic and foreign direct investment (FDI) capital continue to flow to the capital city.

A series of large projects have been licensed or approved to expand investment capital such as Nidec Chaun Choung Vietnam project with an investment of US$174.5 million, the Twin Peaks project at 29 Lieu Giai Street with supplemented capital of US$246 million and a parking project combined with a commercial centre invested by Japanese Aeon Group at Giap Bat Bus Station with a total estimated investment of over US$280 million

At a talk with the Secretary of Hanoi’s Party Committee Vuong Dinh Hue, General Director of Aeon Mall Vietnam Tetsuyuki Nakagawa expressed his wish to continue investing in more projects in Hanoi. Since 2015, the Group has built and put into operation two large shopping centres in Hanoi, including Aeon Mall Long Bien and Aeon Mall Ha Dong.

According to a report from the Hanoi Party Executive Committee, the total investment capital for social development in Hanoi was estimated at VND1,740 trillion in the 2016-2020 period, 1.65 times higher than that of the 2011 – 2015 period, equal to 39.2% of Hanoi’s GRDP (gross regional domestic product) and reaching the set target.

In addition, over VND1,400 trillion in non-budget capital has been invested in more than 2,700 projects during the period.

In particular, the city attracted US$8.67 billion worth of FDI in 2019, the highest ever number over the past 30 years, marking the second consecutive year that Hanoi ranks first in attracting FDI.

During the 2016-2020 period, Hanoi attracted approximately US$25 billion worth of FDI, 3.9 times higher than the 2011-2015 period.

Recently, Hanoi granted investment licenses to 116 projects worth total US$15.5 billion and signed Memoranda of Understanding (MoU) with investors worth US$26.07 billion at the ‘Hanoi 2020 – Investment and Development Cooperation’ held in late June 2020.

This strong resource has continued to fuel the capital's economy and promote its economic and structural transformation. Hanoi’s average GRDP was estimated to increase by 7.39% in the 2016-2020 period, reaching the set target and higher than the 2011 - 2015 period (6.93%).

The average income per capital was estimated at US$5,420 in the 2016-2020 period, 1.5 times higher than in 2015 and 1.8 times higher than the national average.

The service sector rose by 7.12% per year while tourism has gradually become a spearhead economic sector with average growth of 12.1% per year. Hanoi’s export revenue also increased by an average of 9.0% per year, 1.7 times higher than the 2011-2015 period (5.25%).

Pioneering in economic recovery

The economic development has helped Hanoi make an increasing contribution to the State budget. Although Hanoi accounts for only 1% of Vietnam’s total area and 8.5% of the population, it contributes nearly 16% to national GDP, 18.5% to the State budget and 8.6% to total import-export revenue, serving as the leading economic hub in the Northern region and the country.

Hanoi has coordinated with provinces and cities to organise more than 100 business events with enterprises and signed more than 5,000 MoU and sales contracts with enterprises since 2016.

The positive results are thanks to the city’s efforts in administrative reform, infrastructure upgrading, e-Government building, investment and business environment improvements, the removal of difficulties for investment projects and enterprises, and others.

The city’s administrative reform index has ranked second over three consecutive years while all public services performed online at specific levels. Hanoi’s Provincial Competitiveness Index (PCI) was also ranked 9th out of 63 provinces and cities in 2018 and 2019.

In addition, about 130,000 enterprises have been established in the past five years, 1.6 times higher than the 2011-2015 period.

To complete the growth targets set for 2020 and the entire 2015-2020 period, city authorities have called on the business community and people to make every effort to boost the economy while preventing the spread of the COVID-19 pandemic.

The city has asked for the acceleration of public investment projects with the aim of disbursing 100% of public investment in 2020. City leaders have also met representatives from 100 enterprises to listen to their suggestions with the focus on supporting them to innovate technology, diversifing material supply sources and export markets and reducing unnecessary procedures.

Hanoi has set a target of achieving an average income per capita of US$8,300-US$8,500 by 2025 and becoming a major commercial and economic hub of the nation and the Southeast Asian region.