A closer look at the FDI context in Bac Ninh

Snapshot of Bac Ninh

Bac Ninh is located to the north of Hanoi, and is surrounded by multiple major provinces such as Bac Giang, Hung Yen province and Hai Duong. This condition is very favorable to the socio-economic development of Bac Ninh. Indeed, Bac Ninh's economy has continuously grown at a high rate, reaching 13.9% per year on average in the period 1997-2021. Bac Ninh province's GRDP in 2021 will be 23.8 times higher than in 1997. Bac Ninh province's economy ranks 8th in the country, GRDP per capita is 155.6 million VND, ranking 4th in the country. In 2021, the industrial production value of Bac Ninh province is estimated at 1.5 million billion VND, more than 1000 times higher than in 1997, ranking first in the country.

FDI in historical context 

Looking at accumulated numbers up to May 2022, Bac Ninh has granted investment registration for 1,748 projects with a total registered investment capital (after adjustment) reaching $22.7 billion, ranking 7th in the entire country. The city has attracted investments in 16 different industry fields, coming from 38 countries. In particular, investment projects in the processing and manufacturing industry account for more than 80%, and are coming mainly from Korea, China and Japan.

2017 was a breakthrough year in attracting FDI for Bac Ninh, which saw the arrival of a series of large projects. Many FDI projects had investment capitals in the millions of dollars, such as Misumi Co.Ltd or Hana Micron, etc. However, the most notable of all FDI projects has to be the expansion investment by Samsung Display Co.Ltd, with an investment of $2.5 billion.

In 2021, Bac Ninh attracted another major FDI project by Amkor Technology, who will build a Manufacturing, Assembly and Testing Plant for Semiconductor. The total investment capital for this project will reach $1.6 billion by 2035. The first phase of the project will see the investment of about $520 million and will be spread within 5 years from the date of issuance of the Investment Registration Certificate.

The first 5 months of 2022 also experienced impressive growth. Total FDI capital in the first 5 months of the year was approximately equal to the total of 2021, showing the confidence of FDI enterprises in this province.

Why Bac Ninh is attractive for FDI projects

Strategic location 

Bac Ninh is a province in the Red River Delta region, located in the key economic triangle of Hanoi - Hai Phong - Quang Ninh. The city is the gateway to the northeast of Hanoi capital, adjacent to major economic centers of the North. Bac Ninh is also close to China, which is the biggest exporter to Vietnam, and the biggest importer of Vietnam’s goods and services. 

In terms of land transportation, the city has connections to National Highway 1A, Highway 18, National Highway 38, and the trans-Vietnam railway that runs through Bac Ninh to Lang Son and China. By waterways, Bac Ninh is connected to Cau river, Duong river and Thai Binh river, all of which can be used to access all major river/sea port systems of the region. Furthermore, Bac Ninh is located near Noi Bai International airport. which is convenient for the circulation of goods and services. 

With these geographical characteristics, Bac Ninh is heavily linked to the development of the Northern economic region. Therefore, it is of no surprise when the city is one of the key provinces to receive special investment attention from Hanoi, as well as from Vietnam. 

Supporting industries are rapidly developing

Currently, Bac Ninh has strong supporting industries, with enterprises forming clusters and coalitions. As a result, many businesses in the area have become level 1, 2, and 3 suppliers for FDI enterprises in the electronics industry, and have managed to be a part of the global value chain. According to statistics, the province has more than 400 supporting industry enterprises, accounting for 10.1% of the enterprises in the processing and manufacturing industry. By 2025, this figure is expected to double, at 800 enterprises. Among them, 70% will apply production management systems that meet the requirements of global manufacturing standards. This will increase the capability of domestic enterprises to further participate in the global value chain. With the supporting system already in place and rapidly developing, future FDI enterprises coming into the province will benefit greatly.

Friendly business environment

Mr Nguyen Tu Quynh - former Chairman of Bac Ninh People's Committee - shares that to attract foreign investment, the city cannot just rely on favorable natural factors. Instead, conscious efforts have to be made to improve the province’s business environment. Specifically, the city has to give businesses support through infrastructure inside and outside of industrial parks.

The province has organized many activities to connect investors with universities, colleges and vocational schools in the area. These activities improve the ability for foreign enterprises to hire the best people, as well as improving the employment rate in the province. Bac Ninh is widely deploying the model of public administrative centers in its districts to encourage dialogue between the community and enterprises. Bac Ninh has also established a business support team to solve problems and provide feedback, which improved the business environment. As a result, Bac Ninh is considered a "magnet", attracting many investment projects by domestic and foreign corporations and enterprises.

Examples of provincial support can be seen through the comments by Samsung’s representative. The group shares that from day one, Bac Ninh has formed a support team just for Samsung. This team was able to quickly solve difficulties relating to land clearance, construction of the manufacturing plant…Samsung also adds that one of the most important factors behind its decision to invest in Bac Ninh is the level of hospitality and support for foreign enterprises there.