Red River Delta Focusing on Intensive Industrial Development

The Red River Delta region holds a particularly important position and role in national development. Building the Red River Delta region into the country's economic growth driver of the country is the region's development objective through 2020.

The Red River Delta region holds a particularly important position and role in national development. Building the Red River Delta region into the country's economic growth driver of the country is the region's development objective through 2020.

Many advantages

Endowed with a favourable geographical position – the gateway to the East Sea and one of direct connecting points between two dynamic developing regions of Southeast Asia and Northeast Asia, the Red River Delta region has a plenty of favourable conditions to create strategic breakthroughs, restructure the economy, successfully change growth model, and play an important role in the cause of national industrialisation and modernisation.

In addition, housing the capital city of Hanoi and major provinces and cities like Haiphong, Nam Dinh and Hai Duong endows the densely populated Red River Delta region with favourable conditions for industrial development. Based on local characteristics, each province or city can build its own socio-economic development goal tied to overall regional socioeconomic development goals and build commodity supply chains and local industry-based and product-based market connections o enhance the competitiveness for the regional economy. According to the General Statistics Office of Vietnam (GSO), the index of industrial production of Red River Delta provinces and cities jumped in the first five months of 2013. For instance, Hanoi’s industrial production index rose by 3.9 per cent, Haiphong by 2.6 per cent, Bac Ninh by 5.7 per cent, Vinh Phuc by 16.4 per cent and Hai Duong by 9.4 per cent.

However, in practice, due to many reasons, industrial development of the region is incommensurate with its position and potentials. Most industrial facilities in the Red River Delta region have small scales characterised by small investment capital, capital shortage, limited access to capital sources, outdated technology, low productivity, poor competitiveness, and unpopular brand names. All provinces and cities have industrial zones and university complexes but the efficiency is low and vacancy percentage is high.

Although the region’s growth of industrial production value is relatively high, it lacks sustainability on heavy reliance on foreign-invested economic sector. The efficiency and value of industrial production remains low, supporting industries fail to meet the demand, commercial infrastructure is still weak, exports keep rising but trade deficit remains large.

Intensive development

To develop intensive industries, the Red River Delta region has continued to invest to improve existing industrial zones, expand existing ones, and selectively set up new ones. Localities with most industrial parks are Hanoi, Nam Dinh, Haiphong and Bac Ninh. The region focuses on raising the quality, effectiveness and systematisation of industrial zone planning placed in the region’s economic and urban space.

As the economy slows down, the country’s industrial production index climbed 5.2 per cent year on year in the first five months of 2013, lower than the growth of 6.2 per cent in the same period of 2012. The Red River Delta has proactively restructured its industry to match new contents and conditions to utilise labour force and natural resources to attract industrial investors to ensure sustainable development of not only the industrial sector itself but also benefited localities, the entire region and the whole country.

According to reports released at some conferences on Red River Delta provincial development cooperation, provinces and cities actively cooperate in designing and planning new urban areas and industrial zones. They also regularly review, supplement and adjust overall planning, infrastructure network planning, product development planning, land-use planning, etc. for the whole region.

The region focuses on attracting investment capital for high tech, source technology and export-driven sectors, creating jobs, developing supporting industries, developing highly competitive products and services, and carrying out infrastructure construction projects. The region also encourages investments in information technology, electronics, microelectronics and biotechnology.

Specially, the National Red River Delta Tourism Year – Haiphong 2013 was officially opened. Activities during this tourism year will provide opportunities for the industrial sector to strengthen coordination, cooperation and development.

The Prime Minister has recently approved the Master Planning Scheme for Red River Delta Socioeconomic Development through 2020. Accordingly, the region will develop intensive industries. By 2020, agriculture share in the region’s GDP will be around for 7-7.5 per cent while construction-industry and services are expected to account for 45-47 per cent and 46-48 per cent, respectively. The region will focus on developing industrial sectors capable of promoting competitive advantages, comparative advantages and localisation contents.

The region will strive to raise the proportion of high-tech industrial products in processing industries to over 35 per cent in 2015 and 60 per cent in 2020 and lift localisation rate in major industrial products to 50 per cent in 2020.
Thu Ha