A corner of Hai Phong city. (Photo: thp.org.vn)
Location, location, location!
Hai Phong is one of five major municipalities in Vietnam, with direct connection to the central authority. Home to nearly 2 million inhabitants, Hai Phong is the third largest city in Vietnam, after HCMC and Hanoi. The city’s rapid urbanization, with an additional 12%-15% middle-class population annually, has underpinned its exceptional growth over the past five years.
Located on the main economic corridor, along the north-eastern coastal area, Hai Phong is set to become the main gateway for import and export for the Northern Region which will provide companies with easy accessibility to transport their goods on a global basis.
Given its proximity to China, being only 200 km from the border, the city is widely regarded as the China+1 manufacturing base in ASEAN to take advantage of China-ASEAN FTA.
Hai Phong is the fastest growing localities over the past three years. (Source: JLL)
Government Support
Hai Phong has been the spotlight for FDI investment, garnering attention and support from the central authority, supported by a major infrastructure boom and numerous governmental incentives.
The central government has shown its commitment to continue Hai Phong’s exponential growth by offering numerous special tax incentives, which has paved the way for it to become a foreign investment magnet, as streams of FDI pour it’s way into the city’s economy. The constant improvement of Hai Phong’s Provincial Competitiveness Index (PCI) rating demonstrates the authorities continued efforts to enhance the business environment, which will further bolster the attractiveness of Hai Phong.
The Hai Phong Economic Zone, which offers companies preferential treatment when they set up operations, is also acting as a catalyst to tempt more investors to the region.
Registered FDI in Vietnam - Top 5 Localities. (Source: JLL)
Development of Strong Infrastructure Backbone
Recognizing that infrastructure is a crucial element to leverage economic development, Hai Phong will mobilise its resources to develop modern and synchronous transportation infrastructure, which will improve connections to key surrounding regions. This will contribute to establishing Hai Phong as the main maritime trade gateway of the economic corridor in the northern region.
City’s infrastructure has undergone significant improvements through the completion of three core projects of Hanoi-Haiphong Expressway, Tan Vu – Lach Huyen Highway, and Dinh Vu – Cat Hai Bridge. By facilitating the linkages to the Hanoi-Lao Cao Express Way, these projects will reportedly help reduce the commute time between the northern province of Lao Cai and Hai Phong International Gateway Port (HIGP) to approximately six hours.
Hai Phong industrial and logisitics. (Source: JLL)
Industrial and Logistics Landscape
Over the past years, Hai Phong had established itself as a core industrial hub in Vietnam. Benefiting from the positive effect of the China – ASEAN FTA, and the Official Development Assistance (ODA) from Japan, Hai Phong is the preferred destination for manufacturing giants in high-tech industries. Along with numerous incentives available to interested investors, Hai Phong, together with Bac Ninh, are transforming the industrial landscape across the Northern region.
With total area of industrial and logistics zones of 4,701ha, Haiphong is home to 11 existing industrial parks, including Dinh Vu-Cat Hai Economic Zone, and six future industrial parks. The average rent is around US$92/square meter/lease term (several years depending on each zone).
The report also noted that Hai Phong is gearing up to become an internationally-recognized trading hub and a driving force for development in northern Vietnam.
Haiphong in connection with other parts of the world. (Source: JLL)
Unlocking Hai Phong Potential
In light of preparing for a prosperous future, with the movement of manufacturing firms away from China in consideration, the port city should continue investing in infrastructure to drive its economic activities and serve as a crucial connecting point between sea and land transport.
Hai Phong’s strategic location will foster the city to become an industrial, services, and logistics hub for the Northern region of Vietnam and the Southwest of China. Moreover, the Northern city’s economic zones will facilitate a favourable business climate and enhance the liveliness and appeal of the city to a better workforce. Together with the application of 4.0 technological advancement, Hai Phong will seriously increase logistics’ efficiency.
Mr. Stephen Wyatt, Country Head of JLL Vietnam said "There are many examples of port cities around the world including London and Amsterdam. When developed successfully, they can drive economic activity and serve as a crucial connection between sea and land transport."
"Hai Phong has all the necessary ingredients to develop into a true global port city and with continued investment in the development of new roads, improvement of the city's traffic management system, improvement of rail and inland waterways, increase in labour productivity, efficient custom and administration procedures, development of supporting industries and embracing innovation and technology we firmly believe that Hai Phong has a vision for growth which is set to continue for many years to come." Stephen concluded.
