In recent years, attracting domestic investment and foreign direct investment (FDI) has been an important misson to achive Da Nang’s socio-economic development. Da Nang, both contributes to creating a breakthrough and stimulates other resources to exploit and take advantage of the inherent potentials and advantages of Da Nang, to attract significant investment capital upto 2023 from foreign investors to set up business in Da Nang.
The contribution of FDI enterprises in the economic and social development of Da Nang
FDI projects play an important role in promoting the city’s socio-economic development. Foreign investors have been set up business in Da nang and contributed to increasing the city’s production and business capacity, contributing to the economic restructuring in the direction of service, industry, agriculture, and at the same time created a number of manufacturing industries, export of new products such as aerospace components, electronics, electric motors, auto parts…
Specifically, in the period 2016-2020, production and business activities of FDI enterprises contributed an average of 9.4% of the growth rate of GRDP of the whole economy, and at the same time increased the source of investment and development capital. The foreign direct investment sector accounts for 21.9% of the proportion of development investment capital, accounting for 34.2% of the city’s GRDP; and contribution to the state budget is about 21,921 billion VND (18.54%).
FDI enterprises have created more than 190,000 jobs, accounting for 15.37%. Not simply creating jobs, FDI enterprises establishment in Da Nang have contributed to improving the quality of the city’s human resources. The FDI projects have actively contributed to job creation and stable income for the local workforce.
In addition, the FDI sector in this period made a significant contribution to the export growth of the city and the foreign direct investment sector also contributes to promoting the transformation of export product structure.
What are the reasons hindering FDI attraction in Da Nang today?
It can be seen that the medium and long-term effects of the COVID-19 epidemic, political conflicts, and economic crises around the world have affected the recovery of FDI inflows.
Enterprises and investors are still quite cautious in expanding investment in new locations other than the active market. Currently, the existing industrial processing zone have been mostly filled, the remaining vacant land fund is quite small, scattered and without investment incentives that are superior to other localities. Meanwhile, investors who want to enjoy investment incentives in Da Nang Hi-Tech Park need to meet the criteria on products and technology, investment rate… according to regulations. In fact, the number of investors who meet these criteria is quite modest.
The promotion of projects in the fields of health, education, trade in services, logistics encountered many problems and took a long time mainly because of procedures related to planning, land bidding.
It can be said that human resources are a competitive advantage of Da Nang compared to other localities in the region, but in general, the quantity and quality of human resources in the fields of information technology and high technology are not corresponding to market demand. The city still lacks skilled workers, fluent in foreign languages, including technical workers, executive management personnel, and senior experts to participate in the global value chain.
The price of industrial land in Da Nang is much higher than in neighboring localities.
Compared to other centrally run cities such as Hanoi or Ho Chi Minh City, the average rent in industrial parks in Da Nang is still relatively reasonable for businesses and investors. However, land price is not the only factor that affects the decision to choose a project location for enterprises and investors, but also many other “soft” factors such as quality human resources, government support, transparent and open investment environment, peaceful and sustainable living environment..
Currently, City. Da Nang is focusing on improving the quality of the investment environment on these aspects to truly become an attractive investment destination in the region.
How Da Nang can achieve the ambition to attract 7 billion USD investment upto 2030?
In the coming time, the city will focus on prioritizing resources and calling for investment in areas where the city has many development strengths. In the 2021-2025 period, the city will focus on attracting investment to set up company in the fields of information technology, production of electronic components, and high technology (biotechnology, automation technology and mechatronics technology, new materials…), R&D, supporting industries in the fields of mechanics, precision mechanics, electricity, electronics, logistics services, commercial services, tourism services, high value real estate, finance main, physical training sports, high-tech applied agriculture, smart agriculture, organic and ecological agriculture. The period 2025-2030 will focus on attracting investment in setting up company in manufacturing pharmaceuticals and medical equipment, information technology, R&D, financial services, education, training, high-quality healthcare, tourism.
By 2030, Da Nang aims to successfully attract about 7 billion USD. This is completely reasonable when the city is focusing on calling for investment capital in the project of the complex of financial, commercial, entertainment, casino and high-class apartments.
In addition, in early December 2022, the city started construction of the shared infrastructure of the Lien Chieu Port project. The project plays an important role in the development of logistics, trade and services and contributes to increasing the position of Da Nang Bay on the map of sea bays in Southeast Asia. The city is promoting investment calling for the first two container berths, and is expected to hold a tender to select investors in 2023. The project is currently receiving the attention of many domestic businesses and investors from abroad.
In addition, the city is also calling for investment in many other meaningful projects such as setting up company in international commercial, sports and entertainment complex; innovation space; nursing home; international hospital; an international international school…
The solution to promote investment attraction in the near future?
In the coming time, the city will focus on attracting FDI capital from traditional and key markets such as Japan, Korea, Singapore, the United States, Germany…; effectively utilize and exploit relationships with strategic partners (comprehensive partners, comprehensive strategic partners); focus on mobilizing and attracting investment from large corporations (belonging to Forbes 500). In addition, the city will promote the investment and business environment in other potential markets, typically India. In 2023, the city will actively approach and invite potential domestic and foreign businesses and investors to invest in the Da Nang.
For the high-tech field, the city will focus on perfecting the technical infrastructure of the Hi-Tech Park. To meet the demand for land fund to attract investment, the city is implementing investment procedures for 3 new industrial zones with a total area of more than 880 hectares.
For the IT field, one of the city’s outstanding strengths in recent years, the city has planned to implement solutions to improve the quality of human resources in parallel with prioritizing investment in infrastructure, information technology infrastructure to enhance investment attraction in this field,