Chu Lai open economic zone – a driving force

In the 8 years since its establishment, Chu Lai Open Economic Zone has attracted many local and foreign investors, developing production and business activities. Local livelihoods and economic structure have undergone big change. Chu Lai Open Economic Zone has been the driving force for socio-economic development and the industrialization of Quang Nam province.

Comparative advantage

Chu Lai Open Economic Zone is the first of its kind in Vietnam, established Government Decision 108/2003/QD-TTg of June 5, 2003 in Quang Nam province, as a pilot project of the policy to attract investment in compliance with international practice, regional and international economic integration. It is located next to Dung Quat Economic Zone, Da Nang City and the Central Highlands. Therefore, it can develop supporting industries, clean industry and make the best use of its comparative advantage in maritime resources to develop services, tourism and urban utilities for the whole region. In particular, the Government has permitted the establishment of a national, multi-purpose manufacturing and automobile centre in Chu Lai Open Economic Zone and it can be the nucleus promoting the development of other industries in the zone, as well as across Quang Nam province.

There were several reasons for the government to establish Chu Lai as the first open economic zone in Vietnam. Among them are a favourable location for international transport, air and sea routes, and its gateway to the sea for the Mekong Sub-region. Chu Lai and Dung Quat serve as driving forces for the Central Vietnam key economic region to keep up with socio-economic development in the two leading economic regions of Vietnam: Hanoi and Ho Chi Minh City. The advantages in Chu Lai are two important infrastructure establishments: Chu Lai airport and Ky Ha seaport, together with favourable geological conditions for construction and low cost for land clearance.

According to Mr Huynh Khanh Toan, Chairman of the Management Board of Chu Lai Open Economic Zone, the Zone is open to the market with much improved legal framework and liberal policies in compliance with international practice. With its particular advantages, Chu Lai Open Economic Zone can increase international cooperation and promote trade and investment. In June 2010, the Management Board was designated to administer additional 10,000 hectares of coastal area, increasing the total to 42,000 hectares and 120 km of coastline. It created an advantage to develop urban areas and tourist services all along the rivers and beaches from South Hoi An to Nui Thanh Mountain in Chu Lai.

New investment attraction

With comparative advantages and continued efforts for development, so far Chu Lai Open Economic Zone has 64 investment projects with total registered capital of US$1.5 billion, including 38 projects in operation. The total implemented capital is over US$500 million. In 2010 alone, 12 projects were licensed with registered capital of over US$555 million, 202 percent more than that of 2009. With such development, Chu Lai Open Economic Zone has made significant contribution to the development of Quang Nam province. The industrial production value was VND1,341 billion, 58 percent more than 2009. Total export value was US$37 million, 24 percent more than 2009. Total import value was US$300 million. 2,400 workers joined the workforce, increasing the total in Chu Lai Open Economic Zone to nearly 10,000 workers.

The success is due to the concerted efforts of the Managing Board in developing important infrastructure, such as dredging the channel in Ky Ha seaport to receive ships of 20,000DWT for shuttle trips to Hong Kong, China and, together with concerned authorities, upgrading Chu Lai airport. Investments have also been made to develop main roads linking Cua Dai bridge with Da Nang – Hoi An tourist centre and Chu Lai Open Economic Zone, Thanh Nien road along the coast, the dredging of the Truong Giang River, to facilitate tourism development in Eastern part of Quang Nam province. Regarding industrial zones, the Management Board has built Phase 1 infrastructure for Tam Hiep IZ, Bac Chu Lai IZ and the main road to Tam Thang IZ, in the road network linking with Dung Quat Economic Zone. Meanwhile resettlement areas have been developed such as 617, Tam Hiep, Tam Quang, Tam Anh and coastal areas for future development of other projects.

Mr Toan also added that, besides preferential treatment permitted by the central government, the Management Board has advised Quang Nam authorities on additional offers for investments in Chu Lai Open Economic Zone, such as support for land clearance, training of workers and building living quarters for workers. The Management Board has been designated to handle almost all formalities for investment projects, providing one-stop services for investment formalities in Chu Lai Open Economic Zone which were highly appreciated by investors.

In the years to come, Chu Lai Open Economic Zone will be developed into a comprehensive economic zone specifically focusing on the auto industry and manufacturing. Resources will be mobilized to develop tourism and services in the Eastern part, including South Hoi An tourist centre of Vina Capital and Genting (Malaysia) joint venture. Accordingly, the Management Board will take approved planning and hire foreign consultants to develop some areas of international standard and call on investors to develop tourist centres, urban areas and industrial zones. The Management Board will continue to improve mechanisms and policies, especially financial mechanisms for investment in infrastructure development, and offer preferential treatment for key projects such as the auto manufacturing industrial zone, South Hoi An, and international urban area. Infrastructure will be developed to attract investments in such projects as the airport, Ky Ha seaport, Cua Dai bridge, and road networks in Thang Binh, Tam Ky and Nui Thanh. Resources will also be mobilized to develop infrastructure.

The Management Board will also prepare documents to introduce Chu Lai Open Economic Zone, listing projects of high priority, key markets and partners to promote investments, especially FDI projects. Administrative reform will be accelerated, especially formalities regarding investment and business activities, cutting down by one third to half the time required for formalities. – VCCI

Tags: Chu Lai Open Economic Zone, Vietnam economic zones