Hanoi boasts of FDI sector

(VEN) – According to Hanoi’s People’s Committee, the city’s foreign direct investment (FDI) increased sharply in the first half of the year, along with a boost in exports by FDI enterprises.

Hanoi attracted more than US$90 million FDI capital into its wholesale and retail sectors in the first half of the year

Hanoi attracted more than US$90 million FDI capital into its wholesale and retail sectors in the first half of the year

Hanoi‘s retail sector attracts FDI

During the first half of the year, Hanoi attracted 102 new foreign direct investment (FDI) projects with total registered capital of US$191.5 million, up 37 percent compared to the same period of 2011. Wholesale and retail projects were worth of US$90.5 million, accounting for 42.2 percent of the total registered capital.

Apart from 102 newly registered projects, Hanoi also registered 48 FDI projects with capital increases up to US$225.9 million during the period, equal to 90 percent capital increase compared to the same period of last year. So, in the first six months of the year, Hanoi registered 150 FDI projects (including new and capital increased projects) with total registered capital of US$447.4 million, up 5.3 percent compared to the same period of last year.

According to statistics from the Ministry of Planning and Investment’s Foreign Investment Agency, Hanoi attracted 2,544 FDI projects with total registered capital of US$21.457 billion and total implemented capital of US$7.724 billion as of June 2013, ranked third among 63 provinces and cities nationwide in terms of FDI attraction and second in terms of FDI disbursement.

Hanoi’s FDI capital recorded in the first half of the year was estimated at US$380 million, equal to 97 percent compared to the same period of last year. Large scale investors included Christian Dior Vietnam Co. Ltd, CapitaLand-Hoang Thanh Co. Ltd., and Lotte Coralis Co., Ltd.

59.3 of Hanoi’s total newly registered FDI capital of US$191.5 in the first half of the year flowed into local industrial parks and export processing zones, only equivalent to 39.5 percent compared to the same period of last year; meanwhile the remaining capital was invested outside industrial parks and export processing zones, up 67.3 percent over the same period of last year.

According to Hanoi’s Department of Planning and Investment’s report to the Ministry of Planning and Investment, FDI inflows in the first half of the year rose 5,3 percent over the same period of last year, which was considered low due to the regional and national economic recession. In addition, the FDI projects in local industrial parks and export processing zones decreased in number as these industrial parks and export processing zones were not enough attractive to foreign investors and therefore they did not hesitate to expand investment in locations outside local industrial parks and export processing zones.

This year, Hanoi’s Department of Planning and Investment planned to attract 470 FDI projects with total registered capital of US$1.3 billion, equivalent to the past year’s results, including 400 newly registered projects with a total registered capital of US$800 million and 70 ongoing projects with capital increase of US$500 million.

Next year, Hanoi is expected to attract about 435 FDI projects with total registered capital of US$1.4 billion, up 7.7 percent against this year’s target, including 350 newly registered projects with total registered capital of US$950 million, and 85 ongoing projects with a total capital increase of about US$500 million.

To achieve this goal, Hanoi is to implement a range of solutions to implement the scheme to improve FDI efficiency during the 2011-2015 period; construct and issue FDI related documents (with focus on action plans to attract investment from Japan until 2015); review the FDI administrative procedures for simplification; Complete FDI-related ISO procedures; enhance inspections of FDI enterprises; provide support for FDI enterprises; improve the investment environment; and enhance Hanoi’s provincial competitiveness index (PCI).

FDI sectoral exports increased 19.2 percent

In the first half of the year, the domestic economic difficulties forced many businesses to stop or shrink production. However, foreign direct investment (FDI) sectoral production and trading in Hanoi still saw stable growth rates. By a rough reckoning, FDI enterprises reached US$4.3 billion in revenue in the first half of the year, an increase of one percent over the same period of last year. This was just a marginal increase, but was highly appreciated in the current domestic and international economic difficulties.

In particular, several FDI projects proved effectively in terms of operation including those deployed by Canon Vietnam Co. Ltd and Yamaha Motor Vietnam Co. Ltd. These Japanese investors began to deploy their projects in the North Thang Long Industrial Park in Hanoi.

In the first half of the year, FDI sector in Hanoi exported US$2.341 billion, up 19.2 percent compared to the same period of last year. FDI enterprises in Hanoi mainly exported computer components and peripherals during the period.

FDI sectoral export value in the first half of the year accounted for 46.2 percent of Hanoi’s total export value, contributing the largest part considering Hanoi’s three major economic sectors including the state sector which only accounted for 35.6 percent.

According to Hanoi’s People’s Committee, with the proportion of FDI sectoral exports accounting for 46.2 percent, FDI enterprises have contributed substantially to Hanoi’s export revenue growth of 0.2 percent in the first half of the year.

Hanoi’s FDI sectoral import value in the first half of the year was estimated at US$2.388 billion, accounting for 20.1 percent of Hanoi’s total import value in the period, and up 1.6 percent compared to the same period of last year. Thus, during the first half of the year, FDI enterprises in Hanoi recorded a trade deficit of US$46.6 million, equivalent to two percent of their export value, which was also the lowest level among the city’s three major economic sectors. Specifically, the state sector in Hanoi recorded a trade deficit equivalent to 314 percent compare to the same period of last year.

In addition, Hanoi’s FDI sectoral tax remittance to the state budget in the first half of the year rose 39 percent compared to the same period of last year, reaching US$382 million, equivalent to VND8.028 trillion, including payments of sales and income taxes, natural resource taxes, and value added taxes.

According to Hanoi’s People’s Committee, the FDI sector in Hanoi will this year contribute up to US$681.9 million, equivalent to VND14.331 trillion, to the state budget./.

By Tat Binh

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