The northern port city of Haiphong envisions setting up an inner-city free trade zone to drastically accelerate the city’s development.
|Deep C Jetty and Tan Vu Bridge, an expansion of Lach Huyen Port in Haiphong.|
Haiphong’s construction and development planning to 2030 with a vision to 2045 has set out the overall goal of turning the city into one of Vietnam’s powerhouses of industrialisation and modernisation and a driver of the development of the northern region and the whole country.
Haiphong has also completed a draft project on piloting several breakthrough development policies. It includes 13 groups of policies from the tasks of local authorities to the management of land resources, to banking and finance and the income of public officials in the city.
As for a proposal on the application of specific mechanisms and policies for the development of each locality, the government statement dated October 11 had required the National Assembly to regulate seven pilot specific policies for the city of Haiphong.
Accordingly, Haiphong would be a locality going pilot in the implementation of several new policies and mechanisms for development, including the mechanism on research and development of a free trade zone (FTZ) right in the city inner. It is considered a breakthrough proposal which is expected to lift up Haiphong’s development, enabling the city to quickly reach Resolution 45 targets.
Tran Luu Quang, Secretary of Haiphong Party Committee, highlighted a key proposal which is associated with the research and development of a free trade zone (FTZ) right in the inner city to fast-track development and support Haiphong in reaching the targets of Resolution 45. He added that the city possesses prominent advantages over other localities in the region and is one of the most suitable localities in Vietnam for FTZ development.
|Lach Huyen Port. Photo: Hong Phong|
An FTZ is an industrial real estate hub with an institutional environment and free trade conditions to support the operation of export production enterprises and supporting firms. These zones offer special incentives for foreign investors.
There are currently more than 5,000 FTZs worldwide and 1,000 more FTZs are expected to be set up in the next five years. There are FTZs in most major economies, including the Unitd States (300 such zones), Europe (around 100), China (12), and Singapore (1).
The advisory group developing specific mechanisms and policies for Haiphong city suggested that the city be allowed to formulate and apply prominent development incentives, especially to construct an FTZ. At the same time, the advisory group has identified two potential scopes for the development of Haiphong FTZ: either covering only the port area and current urban area in the city or covering the entire city area.
Either way, the advisory group reminded the city of the need to ensure openness, transparency, and superior preferential policies for investors. To this effect, Haiphong needs active support from the government to be able to offer the best incentives and the most favourable business conditions to investors.
To secure the necessary priorities for the creation of its FTZ, Haiphong needs central government to enact the appropriate institutions, including a special customs supervision zone; a zero-tariff policy on several import categories, as well as limited restrictions on cross-border trade, among others.
At its recent session, the National Assembly (NA) Standing Committee discussed draft resolutions on piloting development policies submitted by several localities, including Haiphong.
Presenting the government’s stance on Haiphong city’s proposal, Minister of Planning and Investment Nguyen Chi Dung said that the FTZ model has yet to be applied in Vietnam and has not been mentioned in Vietnamese laws. Therefore, he called on relevant agencies to consider the legal definition provided in the draft and use it as a basis for further elaboration.
In the immediate future, he added, it would be possible to add to the draft resolution some special mechanisms for Dinh Vu-Cat Hai Economic Zone, then further study FTZ formulation before the final submission of a proposal to the NA.
Haiphong requested extended competencies in planning and investment, including more involvement in its own planning. It requested being able to decide matters pertaining to the implementation of investment projects not using state capital, regardless of scale. Based on the proposal, government agencies would retain their powers of inspection and supervision at such projects.
Some National Assembly Deputies expressed their concerns about the establishment of a free trade zone (FTZ) in Hai Phong at a National Assembly Standing Committee session on October 11.