In parallel with an effort in improving investment environment and reforming administrative procedures, Hanoi has been focusing on trade facilitation and signing cooperation agreements with potential markets, stated Chung.
Illustrative photo.
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In 2016, 2017 and the first six months of 2018, the city attracted US$12.46 billion in FDI, equivalent to 59% of the total figure corresponding to the 1989 - 2015 period. With the total FDI capital of around US$5.9 billion in the first six months of 2018, Hanoi has claimed the first place in FDI attraction nationwide.
Among economic fields and sectors in Hanoi, real estate attracted substantial attention with investment capital of US$10.8 billion as of present, accounting for 32.3% of total registered capital.
Processing and manufacturing were the second most heavily invested, with US$7 billion, or 21% of total registered capital, followed by information and communication with US$3.75 billion or 11.2%, construction US$2.6 billion or 7.7%, and trade service US$1.86 billion (5.6%).
Over the last five years, Hanoi has posted an average GRDP growth rate of 8 - 10%, accounting for 13% of Vietnam's GDP and contributes 20% to the nation's state budget.
It is forecast that Hanoi's population would reach 9 - 9.2 million by 2030 and the urbanization rate of 65 - 68%.
Notably, the city is in its quest to become a smart city through infrastructure development and applying high technologies, while turning tourism into a spearhead economic sector. This would be a big opportunity for investors taking part in Hanoi's development process, Chung continued.
Significant achievements
As of June 2018, Hanoi had 4,300 active projects with total registered capital of over US$33.38 billion. Actual FDI reached US$15.6 billion, equivalent to 47% of the registered amount.
Chung attributed the success to the fact that Hanoi has always been the pioneer in activities to build a government of service which supports businesses in every step. "The satisfaction of enterprises and citizens has been identified as the gauge in the operation of Hanoi's government system," he said.
According to Chung, FDI is an important source of capital for social investment, accounting for 10 - 15% on average of social investment and contributing to the city's high GRDP growth over the past years (averaging 7.11% annually).
At the same time, it is the FDI sector that has created stronger competition pressure in each sector, motivating domestic enterprises to innovate technology as well as enhance the economy's competitiveness.
The FDI sector has also created more stable jobs and skills training for workers; and there is a strong impact on the development and transfer of the structure of the three main sectors (industry - construction, trade - services and agriculture), promoting administrative reform and improving the business environment, building capacity of state management officials in the area of investment and enterprises.
Additionally, the FDI sector has helped the metropolitan Hanoi become a civilized and modern city with commercial and service facilities up to international standards, such as the 72-storey Keangnam apartment, commercial, and service complex; the 65-storey Lotte complex, and international five-star hotels like Sofitel Metropole, Hilton or Sheraton.
For Hanoi, the important thing is not only how much FDI is attracted, but also how to promote the effectiveness of this capital flow. Firstly, Hanoi will continue to establish a favorable investment and business environment so that enterprises and investors can successfully carry out their business and production plans, Chung affirmed.
Jens Ruebbert, a former chairman of the European Chamber of Commerce in Vietnam (EuroCham), stated Hanoi has been maintaining high economic growth rate with presences of global multinational companies. The city is also on track to establish an e-government, Ruebbert added.
EuroCham expected to join hands with Hanoi in developing a smart city model while preserving the environment, Ruebbert continued.
Christopher Maline, CEO of Boston Consulting Group (BCG), said countries are competing aggressively with each other for FDI, and "Vietnam is winning." However, in the next 10 years, a big part of global FDI will be poured into new innovation-driven sectors, for which the winner in this race would need a big domestic market and advanced innovation system.
In case of Hanoi, the city has numerous advantages in information and communication technology (ICT), Maline stated.
