Solutions for fdi attraction into industrial zones and economic zone in haiphong in the new context

Nội dung text: Solutions for fdi attraction into industrial zones and economic zone in haiphong in the new context

1. SOLUTIONS FOR FDI ATTRACTION INTO INDUSTRIAL ZONES AND ECONOMIC ZONE IN HAIPHONG IN THE NEW CONTEXT Assoc. Prof.Dr. Nguyen Thai Son1 Abstract: In recent decades, industrial zones and economic zones have been used as effective instruments to attract foreign direct investment. Haiphong is one of the first localities of Vietnam to establish export processing zones and industrial zones since the late twentieth century. In recent years, authority of the Industrial Zones (IZs) and Economic Zone (EZ) of Haiphong has made positive changes in attracting foreign capital. This will be the driving force for the development of Haiphong’s economic and make this city become an industrial, modern, smart and sustainable city promptly. However, it is shown in practice that the activities for attracting FDI projects are facing up with many difficulties. The quality of investment and capital disbursement of FDI projects do not correspond with the investment scale and expectations of the city authorities. This article presents the current situation of FDI attraction in Haiphong IZs and EZ, figures out some main achievements and restrictions, and suggests some basic solutions for boosting FDI attraction to Haiphong IZs and EZ. Key words: FDI, industrial zones, economics zones, Hai Phong. 1. INTRODUTION Since the middle of the twentieth century, the “open” economic zones and industrial parks have been used as effective instruments to attract investment, especially FDI sources. Free zones have been considered as open points in the economy, especially in developing, transition economies, typically China’s special economic zones. There have been many studies on open economic zones as instruments to attract foreign investment for developing countries, since the late past century. Many international organizations are interested in and publish many researches on IZ, EPZ, SEZ such as UNCTAD (on unctad.org), WEPZA (on wepza.com). Articles and reports of UNCTAD and WEPZA aim to provide orientations and experiences for countries in establishing and operating these open economic zones, such as paper of Wei Ge (1999) about The Dynamic of Export Processing Zones. In 2013, UNCTAD organized the 3rd Global Free Trade & Special Economic Zones Summit to maximize trade, investment and development opportunities of emerging markets through free trade & special economic zones. In 2017, a report of ASEAN investments named Foreign Direct Investment an Economic Zone had been published. Most recently, in World Investment Report 2019, UNCTAD spend chapter IV to write about Special Economic Zones (SEZs), a type of general free economic zone that includes other EZs. In Vietnam, there are many studies on FDI into IZs, SEZs since the 1990s such as the study “China’s special economic zone” by Cu Ngoc Huong (1997) discussed the formation, policy and operation of China’s SEZs; “The role of EPZs, EZs, and SEZs in the current situation of 1 Haiphong University; Email: sonnt@dhhp.edu.vn 682
2. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 683 economic globalization” by Phan Chanh Duong (2002) gave an assessment of the role of these free EZs. Studies by Nguyen Van Dam (2002), Dan Duc Hiep (2012) analyzed the investment situation and development of IZs, EPZs and EZs in the North key economic region of the and Vietnam. Another study by Dan Duc Hiep (2015) discussed the results of 25 years of FDI attraction in Haiphong, in which mentioned the results of attracting FDI into Haiphong IZs and EZs up to 2014. So far, there is no expertised research on attracting FDI into IZs and EZ in Haiphong in the domestic and international context in the early years of the 2020s, under the impact of Industry 4.0 and the Covid-19 pandemic. In Vietnam, industrial zones (IZs), export processing zones (EPZs) - one of the forms of economic zones have been established since 1991. In Haiphong city, EPZs, Izs, which were established in 1993, has contributed to FDI attraction and economic growth of the city. Especially, after Vietnam joined WTO (2007) and Dinh Vu - Cat Hai Economic Zone (EZ) was established (2008), Haiphong IZs and EZ have become an captivating destination for domestic and foreign investment of the city, are the “nests” to welcome the “eagles”, “phoenixes” of international business to operate and grow. These zones will become the economic growth force of Haiphong and the key economic region in the North. In recent years, the trend of global investment flow and keen competition from domestic and foreign Izs and EZs, especially the impact of Covid 19 have cause new problems in captivating foreign investors, improve the quality of investment in an advanced and modern direction, and ensuring socio-economic efficiency for the city simultaneously. Therefore, it is necessary to have researches on the current situation of attracting FDI into Haiphong IZs and EZ and policy implications for strategies and solutions to attract FDI in the new context. The article researches and assesses the flow of FDI into Haiphong IZs and EZ, and at the same time examines and analyzes the new international context, Vietnam and Haiphong to propose solutions to this problem. The research methodologies used in this paper are: quantitative statistics positive research methods such as time series division method, absolute and relative comparison method, multi-factor analysis method 2. OVERVIEW OF INDUSTRIAL ZONES AND ECONOMIC ZONE IN HAIPHONG 2.1. Overview of industrila zones and economic zones An EZ means a national territorial area that is allowed to operate under specialized mechanisms, creating incentives to achieve economic development purposes for that area in the national economic development strategy. Initially, these zones were designed to provide freedom of business and production. In terms of scale and nature of their activities, economic zones can be classified into 3 groups: - Free economic zones in commerce: Free trade zone (FTZ), Free port (FP), bonded warehouse, tax suspension area - Free economic zones in industry: Industrial Park (IZ), Export Processing Zone (EPZ), High-Tech Park - General economic zones: Special economic zones (SEZ), open cities, open economic zones
3. 684 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI According to the current point of view, an Industrial Zone “is an area with a defined geographical boundary, specializing in the production of industrial goods and carry out services for industrial production”, and an Economic Zone “means an area with a defined geographical boundary, including many functional areas, established to achieve the goals of attracting investment, developing socio-economic and protecting national defense and security” (Government, 2018). Functional areas in the EZ include non-tariff zones, tax- suspension zones, export processing zones, industrial zones, entertainment areas, tourist resorts, urban areas, residential areas, administrative zones and other functional areas suitable to the characteristics of each EZ. There are independent and separate industrial zones, but there are also industrial zones formed as functional areas of general economic zones. The functional zones of the EZ have a reciprocal relationship, interacting mutually, are the driving force for each other and are the foundation of sustainable development. In the pre-WTO period, most of the countries in the world implemented the overtly protecting economic model. The establishment of economic zones represented free business. In these areas, special economic policies are applied, creating business freedom for businessmen and investors, and minimizing state intervention. After the establishment of the WTO, the trend of opening up and integration, globalization and liberalization of trade and investment, the “open” and “free” nature compared to other domestic regions of the EZs has gradually disappeared. However, in Vietnam, these areas are still given priority to invest in infrastructure, mechanisms and policies to attract investment, especially big foreign investors. 2.2. Industrial zones and economic zone in Haiphong Haiphong is the second city in Vietnam to establish an EPZ and is the first one in formation an IZ in accordance with the regulations of the IZ issued by the Prime Minister. In 1993, the State Committee for Cooperation and Investment issued the License to establish Haiphong EPZ. The Authority of Haiphong EPZ (HEPZA) was established to carry out state management for Haiphong EPZ (150 ha). In 1994, when Nomura IZ (164 ha) was formed, the EPZA Had additional tasks of managing IZs, therefore been converted to Haiphong EPZs and IZs Authority (HEPIZA). In 2008, Dinh Vu - Cat Hai EZ was established. Accordingly, HEPIZA were reorganized into Haiphong Economic Zone Authority (HEZA). HEZA is managing Dinh Vu - Cat Hai Economic Zone and 12 industrial parks, including 05 industrial parks with foreign joint ventures (Nomura - Haiphong, Do Son Haiphong, Dinh Vu, Nam Dinh Vu (Zone 2). ), International gateway ports), 03 industrial parks with 100% foreign capital (An Duong, VSIP, maritime industry and services), 04 industrial zones with 100% domestic capital (Trang Due, South Kien Bridge, South Dinh Vu (Zone 1) and MP Dinh Vu). Table 1. Industrial zones and Economic zone in Haiphong ( to the end of 2020) Registed investment Secondary FDI No. Name of zones Acreage (ha) capital Projects FDI (mill. DDI (bill. No. of Registed capital USD) VND) project (mill. USD) IZs outside Dinh Vu – Cat Hai EZ 1 Do Son IZ 150.00 75.00 47 321.83 2 Nomura IZ 153.00 140.83 57 1,509.90
4. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 685 3 South Kien Bridge IZ 263.47 798.15 28 61.56 4 An Duong IZ 196.00 175.00 28 470.03 5 An Hung – Dai Ban IZ 450.00 6 Tien Thanh – Tien Lang IZ 450.00 In the process of researching, making investment project and 7 Giang Bien II – Vinh Bao IZ 350.00 submitting for approval 8 Vinh Quang – Vinh Bao IZ 350.00 9 An Hoa – Vinh Bao IZ 200.00 10 Ngu Phuc – Kien Thuy IZ 450.00 11 Vinh Quang – Tien Lang Shipbuilding IZ 1,000.00 12 Cuu Bridge – An Lao IZ 106.00 Indusstrial zones and funtional zones in Dinh Vu – Cat Hai economic zone 1 Trang Due IZ 389.77 1500.00 88 6,318.40 2 Dinh Vu IZ (Deep C1) 541.46 142.77 50 2,682.00 3 MP Dinh Vu IZ 234.10 992.97 9 9.43 South Dinh Vu Idustrial and non-tariff 4 zone 1329.11 9,095.78 7 64,211.00 5 South Dinh Vu IZ (Deep C2A) 513.40 116.86 9 608.44 Maritime indusstrial and service zone 6 (Deep C2B) 132.70 23.91 16 186.97 7 Vietnam – Singapore IZ (VSIP) 507.60 268.20 42 2,430.60 Haiphong International gateway port IZ 8 (Deep C3) 526.81 259.41 9 Ben Rung IZ 1,002.00 In the process of researching, making investment project and 10 South Trang Cat IZ 200.30 submitting for approval 11 Thuy Nguyen IZ 319.60 12 Xuan Cau IZ 752.00 Total 10,567.32 1.201.98 12,386.90 381 14,663.37 Source: HEZA Up to now, among 12 IZs outside Dinh Vu – Cat Hai EZ, only 4 IZs are in operation (Nomura, Do Son, Nam Cau Kien, An Duong), 8 IZs in Dinh Vu - Cat Hai EZ have been granted investment certificate for infrastructure construction and investment attraction. The remaining IZs (inside and outside the EZ) are in the process of research, project planning and submitting for approval. IZs and EZs have deployed activities to attract 8 FDI projects investing in IZs building, 381 secondary FDI projects with a total capital of nearly 16 billion USD. Haiphong will continue to prepare to establish 10 new industrial zone infrastructure development projects. 3. REAL SITUATION OF ATTRACTING FDI TO INDUSTRIAL ZONES AND ECONOMIC ZONE IN HAIPHONG 3.1. Policies of attracting FDI to industrial zones and economic zone in Haiphong In recent years, Haiphong has paid much attention to investing in technical infrastructure and transport in the city and connecting with other localities in the country. Electrical, road,
5. 686 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI water supply and telecommunications systems are connected and supplied to industrial zones and EZs. Business investment environment is improved. Procedures are established and publicly published with a set of administrative procedures under HEZA’s jurisdiction with 47 procedures related to all activities of investors. Investment promotion is of particular interest to the city and HEZA. HEZA has established the Investment Promotion Center and the Job Referral Center since its inception. After Prime Minister’s decision to dissolve the Center for Investment, Trade and Tourism Promotion of Haiphong city, it’s functions and tasks had been moved to HEZA and merged all centers, renamed to Center for Investment Promotion and Employment Services. This is a revenue generating public service delivery unit for promoting and supporting investment in IZs and EZ. Investment incentives are applied to corporate income tax, import-export tax, VAT, and special consumption tax according to Government’s regulations. For corporate income tax, FDI investors in industrial zones outside the EZ are exempted for 2 years and reduced by 50% for the next 4 years. For FDI investors in the EZ, investment incentives are implemented as follows (Table 2): Table 2. Corporate income tax incentives in Dinh Vu – Cat Hai EZ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Tax - From 01/01/2014 to General incentive 10% 31/12/2015: 22% rate - From 01/01/2016: 20% 15 years From the first year - From 01/01/2014 to Case 1 of having 0% 5% 10% 31/12/2015: 22% taxable - From 01/01/2016: 20% income 4 years 9 years 2 years 5% - From 01/01/2014 No profits to 31/12/2015: for the Case 2 0 0% 11% 22% first 3 - From years 01/01/2016: 20% first 3 years 4 year 8 years 1 year have no profits for the Source: HEZA
6. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 687 Table 3: Summary of investment incentive policies in Dinh Vu – Cat Hai EZ Tax Incentives in EZ Normal Tax Note Corpotate income tax - 10% for 15 years 22% (20% from 2013) - Free tax for 4 years - Reduce 50% for 9 years continuosly Individual income tax Reduce 50% Normal Import-export tax Free tax according to Decree No. 87/2010/ND-CP (for According to Decree No. 87/2010/ special projects) ND-CP (for special projects) In non-tariff zones VAT According to Decree No. 123/2008/ND-CP (for special projects) Special consumption tax According to Decree No. 26/2009/ND-CP (for special projects) Source: Haiphong DPI Projects are exempted from land rent and water surface rent (from 11 to 15 years from completion) when investing in areas of special investment incentives; construction of apartment buildings for workers; construction of public works in the fields of education, health, culture, sports, science - technology. 3.2. Achivements of FDI attracting to Izs and EZ in Haiphong 3.2.1. FDI attracting to infrastructure projects of IZs and EZ By 2021, Haiphong will attract foreign investors to invest in infrastructure in 8 IZs (Nomura; Dinh Vu (Deep C1); VSIP; Do Son; An Duong; South Dinh Vu II (Deep C2A), Maritime Services and Industrial Zone (Deep C2B), Haiphong International Gateway Port IZ (Deep C3)) with a total registered capital of 1,201.98 million USD, implemented investment capital 290.77 million USD, total investment capital investment disbursement was 452 million USD, the average disbursement rate was 37.62% (Table 4). It can be seen that FDI projects in infrastructure of IZs are implemented by professional international infrastructure investors who have wide relationships with manufacturing and service FDI investors. Total investment capital in IZs infrastructure with FDI capital is more than 2 times higher than that of domestic investors in other industrial zones. At the same time, having a methodical implementation process should achieve high efficiency. The results of attracting secondary FDI investors into these areas are very high. With 1.2 billion USD in infrastructure investment in 8 industrial zones (disbursed in fact 452 million USD), it has attracted 249 secondary FDI projects with a total registered capital of over 8.2 billion USD (excluding the International Gateway Port IZ is under construction). Table 4. Result of FDI infrastructure projects Unit: Million USD Secondary Registered Registered Implemented Disbursed Disbursement No. Industrial zones FDI projects secondary FDI capital capital capital rate (%) project capital 1 Nomura IZ 140.83 41.13 98.13 69,68 57 1,509.90 2 Dinh Vu IZ (Deep C1) 142.77 21.24 51.03 35.74 50 2,682.00 3 Do Son IZ 75.00 18.07 18.07 24.09 47 321.83
7. 688 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI 4 An Duong IZ 175.00 66.50 66.50 38.00 28 470.03 5 VSIP 268.20 92.46 152.07 56.70 42 2,430.60 South Dinh Vu II 6 116.86 31.55 37.17 31.81 9 608.44 (Deep C2A) Maritime industrial 7 and service zone 23.91 14.01 19.81 82.84 16 186.97 (Deep C2B) International 8 gateway port IZ 259.41 5.82 9.44 3.64 0 0 (Deep C3) Total 1,201.98 290.77 452.22 37.62 249 8,209.77 (Source: HEZA) 3.2.2. Attracted FDI into IZs and EZ in Haiphong period 2011 – 2020 Before Vietnam joined the WTO, the amount of FDI capital invested in production and business in Haiphong IZs and EPZ was quite modest. In 2008, after Vietnam joined the WTO and Haiphong was allowed to establish Dinh Vu - Cat Hai EZ with special preferential policies compared to IZs, the capital of FDI inflows into Haiphong industrial zones and EZs grew up quickly. From 1993 to the end of 2007, out of all the industrial parks and export processing zones of Haiphong there were only 70 FDI projects with a total registered capital of 1,248.53 million USD (average 89.1 million USD/year, 17.8 million USD/project). In the next 13 years, Haiphong IZs and EZs attracted 355 new FDI projects with a total registered capital of 9,978 million USD (average 767.5 million USD/year, 28.1 million USD/project), increased by nearly 9 times the annual average FDI capital attraction and over 1.5 times the average FDI capital/project). Table 5. New FDI projects to IZs and EZ of Haiphong period 2011 - 2020 Proportion compared to FDI to FDI to Haiphong FDI to KCN, KKT Năm Haiphong (%) Projects Capital (mill. USD) Projects Capital (mill. USD) Projects Capital 2011 30 611.66 12 245.27 40.00 40.10 2012 39 1,119.09 17 1;089.40 43.59 97.35 2013 33 1,881.93 16 1;788.53 48.48 95.04 2014 52 824.16 27 795.23 51.92 96.49 2015 55 699.42 41 676.27 74.55 96.69 2016 54 2,467.22 27 2;444.53 50.00 99.08 2017 60 258.07 27 131.17 45.00 50.83 2018 115 741.89 66 521.20 57.9 70.25 2019 93 640.55 59 570.48 63.44 89.06 2020 76 1,125.85 39 1;103.45 51.32 98.01 Cộng 692 10,369.83 331 9;365.52 47.83 90.32 Source: HEZA and Author’s caculation
8. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 689 Over the past 10 years, Haiphong IZs and EZ have always been the city’s FDI attraction locations with a high number of projects and registered capital (Table 5). In 2011, FDI into Izs and EZ counted for 40% of both the number of projects and registered capital. In 2020, these proportions are raised. The proportion of IZs and EZs’ projects and registered capital is 51,32% and 98,01% respectively. Almost all of the FDI capital are invested in IZs and EZ. At the same time, the value of each project is very high compared to FDI projects in other regions in 2020. The average capital for a new FDI project in IZs and EZ is 28.1 million USD, 6 times as much compared with FDI projects outside (4.69 million). This proves that the scale of investment and the quality of FDI projects in IZs and EZs are much higher than those outside. Accumulated to the end of 2020, IZs and EZ in Haiphong have attracted 400 FDI projects with a total investment capital of 16.25 billion USD, accounting for 83.8% of the total attracted FDI capital of the whole city (HEZA, 2021). In recent years, FDI in IZs and EZs has strongly shifted from breadth to depth, focusing on attracting high-tech manufacturing, projects that use less energy and are friendly with the environment. Some projects of major economic groups from Korea, Japan, the US, Hong Kong, and Taiwan have been formed in industrial zones and EZs, typically: - LG Group (Korea) with 5 projects: (1) LGD project produces and processes Oled TV screens, plastic Oled screens for mobile devices such as mobile phones, smart clocks and tablet computers with investment capital of 2.5 billion USD; (2) LGE project manufatures and assembles electrical products, high industrial electronics, color television, smart TV, refrigerator, washing machine, smart phone, with investment capital of 1.5 billion USD; (3) LG Innotek project produces module for cameras with investment capital of 1,051 million USD; (4) LG Chem project produces polarized film for television screens, cell phones, and laptops, with an investment of 2.8 million USD; (5) LG CNS project manufactures and installs computer hardware; provide software; maintenance of vp machinery and equipment; erection and installation, investment capital of 1.2 million USD. - Bridgestone Corporation (Japan) with the project of car tire production, with an investment of 1,224 million USD - Regina Miracle (Hongkong) high-class garment project with investment capital of 900 million USD - Project of manufacturing electronic products Pegatron (Taiwan) with investment capital of 481 million USD - Pharmaceutical production project of Nipro Pharma (Japan) with investment capital of 250 million USD - Project Kyocera Mita (Japan) produces office equipment, with investment capital of 187.5 million USD - Fuji Xerox (Japan) multi-function printer and copier production project with investment capital of 119 million USD - Project GE (US) with investment capital of 111 million USD. These projects use modern equipment and technology with high added value and are capable of attracting other satellite projects to invest in Haiphong, initially forming
9. 690 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI production clusters and chain production. Some modern international brands have invested in Haiphong IZs and EZ such as: Rorze Robotech Co., Ltd. manufactures robots; Bridgestone Corporation produces tires for cars, Nipro Pharma Group manufactures pharmaceuticals, a number of companies such as: YAZAKI Haiphong - Vietnam, Tohoku Pioneer Vietnam, Toyoda Gosei, GE specializes in manufacturing electrical components and air bags. cars, electronic appliances, car speakers, cell phone speakers, generators; Kyocera Mita Company, Fuji Xerox manufactures office equipment and multifunction photocopiers. These companies are using modern and advanced equipment and technology in production and high rates of mechanization and automation. Large enterprises have initially formed link chains and opportunities for domestic firms to participate in the supply chains. The leading industrial parks in FDI attraction include Trang Due IZ with 6,318.4 million USD, Dinh Vu IZ 2,682.00 million USD, VSIP 2,430.60 million USD, Nomura IZ 1,509.9 million USD. The proportion of operating IZs which were invested by secondary FDI is over 85%, such as: MP Dinh Vu IZ, Nomura IZ, VSIP, Trang Due IZ, Dinh Vu IZ. The average investment capital of secondary FDI projects in South Dinh Vu II IZ is 64.5 million USD/project, in Trang Due IZ is 59.62 million USD/project, in VSIP is 55.43 million USD/project, in Dinh Vu IZ 35.61 million USD/project, in Nomura IZ 26.48 million USD/project and in South Dinh Vu I IZ 20.7 million USD/project (HEZA, 2021). 3.2.3. Dificulties in attracting FDI to Izs and EZ in Haiphong The general fill rate of industrial zones and EZs in operation is low (the industrial zones in the EZs reach 52.4%, non-EZs reach 79.7%). There are still many inadequacies in supporting industry development. There is no supporting industrial park to create a driving force to promote the development of processing and manufacturing industries. The activities of site clearance compensation and land allocation for the implementation of infrastructure development projects to attract secondary projects has many difficulties and problems with mechanisms and policies. The delay in land allocation misses the opportunity to attract FDI. Investment infrastructure, operations and support costs for investment and business, especially logistics and supply chains, are still limited and unattractive to investors. Mechanisms, policies for investment incentives still have many overlapping contents, lack of synchronization. The management model is slow to be reformed. There are no breakthrough mechanisms and policies to develop IZs and EZ and attract FDI. Investment capital from the state budget for EZ infrastructure projects is limited. Regional linkage is incomplete and lacks of attractiveness. Competition to attract FDI between localities and countries in the region are increasingly keen. The tax and financial incentives have been continuously adjusted towards increasing tightness, causing concerns for investors. Technology management for businesses in the IZs and EZ is limited; the ability to grasp and evaluate the technology level of enterprises still faces many difficulties; technology transfer efficiency is not high; almost transferred technologies are next generation or end- user, no core technology.
10. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 691 Human resources have not met the requirements of investors, especially trained and highly qualified human resources. Infrastructure to provide support services to employees are seriously lacking. The trade war and the world economic crisis due to the impact of the long-lasting Covid 19 epidemic caused difficulties in the promotion and implementation of investment, production and business activities. 4. ORIENTATION AND SOLUTIONS TO ATTRACT FDI INTO INDUSTRIAL PARKS AND ECONOMIC ZONES OF HAIPHONG IN THE NEW CONTEXT 4.1. The new context of FDI flows and Haiphong According to the report “World Investment Report 2020” and “Investment Trends Monitor 2021” of UNCTAD, the total global FDI has continuously decreased in the two years of 2019 and 2020. Global investment flows decreased from 2 trillion USD in 2015 to 1.5 trillion USD in 2019 and continue to decrease 42% in 2020 to 859 billion USD. The main cause of this shock drop was the negative effects of the Covid 19 pandemic globally. FDI inflows are blocked by social closures for isolation in most countries. Along with the epidemic, the US- China trade war has big impact on this decrease. In 2020, FDI in the US decreased 49% compared to 2019. Meanwhile, FDI into China, after the pandemic has been controlled in this country, has reached 163 billion USD, surpassing the US to become the largest FDI attraction country in the world. FDI in developing Asian countries decreased by 4%, to about 476 billion USD. FDI in Southeast Asia decreased by 31% compared to 2019, reaching about 107 billion USD. In particular, the strongest decline recorded in Malaysia was 68%, followed by Singapore with a decrease of 37%, Indonesia and Vietnam with a decrease of 24%, 10% respectively. According to the UNCTAD reports, FDI inflows could be recovered to a low level from 2022 along with the world’s resistance to Covid 19 pandemic. In the coming period, with high economic growth compared to other countries in the region, the ability to control and control the Covid 19 pandemic, Vietnam will become a safe destination for foreign investors. The US-China trade war shifts FDI flows from China to avoid negative effects and retaliatory taxes. With the advantage of favorable geographical location, low labor costs and especially the intersection point of new generation FTAs, Vietnam has many advantages to welcome international investment flows in the context of the 4th industrial revolution happening. Vietnam has many incentives and attractive foreign investors. FDI projects have good growth ability, occupy an important position in the Vietnamese economy and gain many commercial benefits from Vietnam’s integration into the world. In 2020, Vietnam’s trade surplus reached the highest level in five years, with a trade surplus of 19.1 billion USD. The FDI sector (including crude oil) reached 203.3 billion USD, up 9.7%, accounting for 72% of Vietnam’s export turnover (GSO, 2021). Quarter I of 2021, Vietnam saw a trade surplus of over 2 billion USD, with main groups of phones and spare parts (with export turnover of 14.1 billion USD), electronics, computers and components (12 billion USD), machinery, equipment and spare parts (9.1 billion USD). USD), textiles (7.2 billion USD), footwear (4.7 billion USD) (Finance, 2021) These are all commodity groups held mainly by FDI enterprises. Trade surplus, including crude oil, kept Vietnam’s trade surplus at an attractive level.
11. 692 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI As a long-standing seaport city with convenient transportation system, in recent years, Haiphong has made strong changes in economic development, the growth rate is always at the 2-digit level, far exceeding national average (in 2018, GRDP growth rate is 16.48%, in 2019: 16.68%) In 2020, despite being affected by the Covid-19 pandemic, Haiphong’s growth rate still reached 11.22%, 4 times the national average. Haiphong promotes the improvement of business environment, reforms investment procedures and becomes one of the leading locality in attracting FDI. With the system of industrial zones, especially Dinh Vu - Cat Hai EZ which is planned and invested in infrastructure, foreign investors can quickly research and deploy FDI projects. The trade war and the global epidemic led to the restructuring of large corporations in the world, creating a big shift in investment capital flows. Haiphong is a destination with many potentialities and advantages. The city’s infrastructure continues to focus on investment, creating connections, creating an outstanding competitive advantage of Haiphong with other localities in the region. Since then, the city has conditions to promote regional linkages in production and business, attracting foreign direct investment, especially high-tech projects in key industries. 4.2. Orientation to FDI attracting to IZs and EZ of Haiphong According to the People’s Committee of Haiphong city, in the coming years, Haiphong will continue to attract foreign investment on the principle of being selective, not attracting at all costs. Projects that negatively affect the environment, waste energy, natural resources, and minerals with low added value will be resolutely rejected. Priority is given to attracting projects with quality, economic efficiency, environmental assurance, sustainable development, and a commitment to technology transfer and highly skilled labor; focusing on attracting large investors using high technology, modernity and friendly with the environment; Small and medium investors suitable for each sector, each locality ensuring the competitiveness of products and exported goods, and making a big contribution to the city budget. The diversity of investment promotions is essential for making Dinh Vu – Cat Hai EZ become one of the modern international economic and trade centers of the Northern region and the whole country and the gate to two corridors, Vietnam – China economic belt and the formation of urban areas and public services places in the EZ. Haiphong will focus on attracting investment in several of fields such as high-tech manufacturing; supporting industry; infrastructure development and human resource development; agricultural product processing combined with the planning of agricultural production zones; service industries associated with seaports, high-added-value airports, regional logistics centers; industries with a large proportion of exports; sectors of social security (medical examination and treatment, pharmaceutical and vaccine industries, bio- products), ensuring the environment and national security Regarding strategic partners in investment attraction, the city aims to promote and focus on promoting large domestic and international economic groups capable of bringing together many satellite manufacturing enterprises, creating a global value chain; big investors who have financial capacity, management experience and ability to connect and have positive effects on local business, especially supporting industrial production. Strategic countries in attracting investment are Japan, Korea, the US, European countries, some Asian countries and territories: Singapore, Thailand, Taiwan, etc.
12. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 693 4.3. Some proposals to promote FDI attraction to Izs and EZ of Haiphong In order to promote the attraction of FDI into Haiphong industrial zones and EZs, it is necessary to synchronously implement the following basic measures: Firstly, realizing and promoting the right role of industrial zones, especially Dinh Vu - Cat Hai EZ in the strategy of sustainable economic development of Haiphong and the northern key economic region. Research and propose breakthrough policies for Dinh Vu - Cat Hai EZ need to be researched and proposed to create a highlight in FDI attraction. In order to improve management effectiveness, ensure consistency in management, and test new policies, the government of EZ and Dinh Vu city should be established. Second, policies and mechanisms at all levels, sectors should be synchronous. Management models should be innovated, avoiding overlap, causing difficulties for investors. Administrative procedures must be reformed. A single window mechanism with multi-connections should be formed, to speed up investment appraisal and licensing. The management and operation capacity of the staff of HEZA must be improved appropriately. Third, to adopt appropriate and drastic policies and measures in site clearance, speeding up the allocation of clear land to investors. Fourth, continue to promote synchronous and timely development of technical infrastructure systems, traffic inside and outside industrial zones and EZs. Promote investment in social infrastructure for employees. Fifth, building a specialized industrial zone for investors from the same country and specialized industrial zone to increase its attractiveness. Sixth, innovating in promotion and investment support. Create more channels to promote and call for investment, build promotion tools in prolonged epidemic conditions, on the basis of the digital technology and Industry 4.0. Seventh, increasing training and attract workers. There is a policy to attract and support labors outside the province. The government should support investors in utility projects serving workers in industrial zones and EZs, and training institutions to supply human resources to ensure quantity and quality requirements for investors. REFERENCES 1. Cu Ngoc Huong (1997), Special Economic Zone of China, Central Institute for Economic Management 2. Dan Duc Hiep (2012), Economic zones, industrial zones, export processing zones in Vietnam, National Political Publishing House 3. Dan Duc Hiep (2015), 25 years of attracting FDI in Hai Phong, National Political Publishing House 4. Finance (2021), Infographic: 1st quarter of 2021, Vietnam saw a trade surplus of over 2 billion USD, http:// thoibaotaichinhvietnam.vn/pages/kinh-doanh/2021-03-31/infographic-quy-i-2021-viet-nam-xuat-sieu- hon-2-ty-usd-101772.aspx access 25/04/2021 5. Goverment (2018), Decree No. 82/2018 / ND-CP, dated 22/5/2018, regulating the management of industrial parks and economic zones. 6. GSO (2021), Import and export in 2020: Effort and success, thong-ke/2021/01/xuat-nhap-khau-nam-2020-no-luc-va-thanh-cong/ access 25/04/2021
13. 694 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI 7. HEZA (2021), Report on the results of implementing tasks in 2020 8. Nguyen Van Dam (2002), Investment and development of industrial parks - export processing zones in the Northern key economic region: Current situation and solutions 9. Phan Chanh Duong (2002), The role of export processing zones, economic zones, economic registration before the current situation of economic globalization, Development Economics Journal, June 2002 issue 10. UNCTAD (2020), World Investment Report 2020, eISBN 978-92-1-005144-6, files/official-document/wir2020_en.pdf, access 20/4/2021 11. UNCTAD (2021), Investment Trends Monitor, No. 38 diaeiainf2021d1_en.pdf, access 20/4/2021