Lying on the right bank of the Red River in northern Vietnam, approximately 85 miles inland from the South China Sea, is the charming capital city of Hanoi. Hanoi is Vietnam’s old imperial capital and its modern center of politics and culture. The previous generation of people in Hanoi experienced a strict communist domination. While still recognized for their humility and simpler lifestyle compared to those living in the south of the country, today Hanoi’s people display an increasing warmth and openness in communication and work.
Currently, the city has an estimated 2.6 million inhabitants in its urban areas.
Hanoi was predicted to be among the fastest growing cities in the world in terms of GDP growth from 2008 to 2025, according to a report by PricewaterhouseCoopers. Despite the recent economic crisis, Hanoi remains one of the fastest growing cities in Vietnam, with its economy expanding 7.88 percent during the first 10 months of 2013.
Hanoi has a humid subtropical climate, and unlike the southern part of the country, experience four distinct seasons. The city lies on the banks of the Red River and is dotted with lakes, including the famous Hoàn Kiếm Lake.
The year 2010 marked the 1000th anniversary of the establishment of Hanoi.
For many years, agriculture was the main industry of Hanoi. However, like the rest of the country, Hanoi is moving to becoming an industrial focused economy. The agricultural industry that remains is seeking to consolidate and modernize its processes and technologies.
Hanoi has seen the number of visitors to the city increase by 0.5 percent Y/Y. In total, it is estimated that 171,700 visitors came to the city in March 2014. The total visitors for the quarter amounts to around 503,200, a 12.3 percent increase Y/Y.
Tourism numbers throughout Vietnam have seen positive growth over the past year. Vietnam saw over 7.57 million international visitors in 2013, beating its target of 7.2 million for the year. The figures released by the Vietnam National Administration of Tourism (VNAT) represented a rise of 10.6 percent from the 2012 year (6.85 million). Revenues generated from tourism in 2013 came to US$9.4 billion.
According to a draft plan for industrial sector development created by the People’s Committee of Hanoi, the government will continue its focus on developing the city as an industrial center with a focus on high technology in the coming decade. The city's high technology goal is aided by the fact that Hanoi is the center of education in Vietnam, with an estimated 62 percent of all scientists living and working in the city's universities.
In 2014, Hanoi has seen positive industrial production numbers. In the first two months of 2014 Hanoi’s index of industrial production (IIP) grew by 2.8 percent, totaling VND283 trillion (US$13.47 billion) in sales and service revenues, and $1.668 billion in export earnings.
During March, Hanoi’s industrial production development index rose by 4.1 percent Y/Y and by 26.9 percent over the previous month.
|Area||1,291.4 sq mi|
|Principal Religions||Non-religious, Buddhist, Christian|
|Principal Languages||Vietnamese, English|
The Vietnamese government has recently announced its intention to invest heavily in new power grids for HCMC and Hanoi. The total investment for the new project amounts to US$366.98 million. Of this money, US$272.71 million comes from the Asia Development Bank and the ASEAN Infrastructure Fund (AIF); the remaining US$94.27 million is provided by the Hanoi Power Corporation and the Ho Chi Minh City Power Corporation.
As a transport hub of the Red River Delta, Hanoi features a large network of waterways, railways and highways connecting the region. Infrastructure development has been a priority in the city, with the local government taking steps to ensure that the continued flow of goods and investment into the city can be sustained to uphold its strong economic growth.
Rapid economic expansion in Hanoi has led to substantial growth in the city’s population, adding over 400,000 new citizens each year since 2008. This population boom, while benefitting the local economy through the addition of young and skilled workers, has also led to congestion within the city’s transportation network. Due to this, motorcycles and mopeds have become the preferred means of transportation in Hanoi. According to the Institute of Transport Planning and Management, motorcycles outnumber cars by 10-to-1. However, car ownership is on the rise in Hanoi, with an annual growth rate of 10 percent.
In an effort to relieve traffic congestion, the government of Hanoi has worked to increase inexpensive bus routes and other public transportation options in the city.
South Korean builder Daelim Industrial Co. has recently won a contract to build an 8.5 kilometer-long elevated rail system in downtown Hanoi. Construction is scheduled to begin in May and is forecast to be finished in around 30 months. It has been reported that the Hanoi government plans on building an additional eight rail transit lines.
The city has also been discussing the feasibility of building a metro system. If approved, this project could be completed by 2020.
Noi Bai International Airport, 28 miles (45km) or approximately 1 hour by car from central Hanoi, is the main airport in the north of the country. The airport also handles air freight and carries out logistics and exporting activities, with direct scheduled flights to all continents.
There is only one domestic airport in Hanoi. The Gia Lam Airport, located on the eastern bank of the Red River, is used primarily for military training activities, as well as chartered helicopter taxi flights for tourists visiting nearby attractions such as Halong Bay or Ba Vi Mountain. The airport is due to become a fully functional civilian domestic airport by 2015, however, and will offer regional flights throughout Vietnam.
Hanoi is an important hub for the Trans-Vietnam railway line (“Reunion Express”) from Lang Son province to Ho Chi Minh City in the South. With a length of 1,726 km, it goes through 21 cities and provinces of Vietnam. In addition, there are several arterial railways for freight transport, including railways to Hai Phong, Lao Cai and Lang Son.
Ports and Waterways
Hanoi has a small river harbor located on the Red River (An Duong harbor) with a number of barges and other shallow-draft vessels. The dimensions of these vessels are relatively small, with a limited capacity, due to the shallowness of the Red River.
The merger of the capital with Ha Tay province, four communes of Hoa Binh province and one district of Vinh Phuc province in 2008 extended the city’s jurisdiction into the complex system of rivers and lakes surrounding the city. Hanoi is proud of the beauty of her lakes and rivers, but they also serve a very practical function: the regulation of water during the region’s wet season.
Hanoi’s road system is well-connected and allows easy transport to the city’s neighboring provinces, facilitating the vast logistical requirements of businesses operating in the region.
There are on-going activities to build and improve highways and bridges in the Red River Delta Area. The key expressway from Noi Bai to Lao Cai, which helps connect Hanoi to the Chinese border, is expected to be in use this year and will be 254km in length, cutting the trip to Yunnan in China from a ten to six hour journey.
The National Road 1A is the trans-Vietnam highway, stretching over 2,300 km and connecting Hanoi to all the country’s major provinces. To the west of National Road 1A is the Ho Chi Minh Highway, which is a new two-lane highway that is due to increase to eight lanes and will also reach extensively into every province in Vietnam.
Infrastructure Investment Projects:
Hanoi plans to spend a total of VND238.757 trillion (US$11.3 trillion) during the period 2011-2020 on developing centers for research, design, manufacturing and expanding office space for larger production companies. The target is to increase industrial production by 11.3 percent during the period 2011-2015, 12.1 percent during 2016-2020 and 10.2 percent during 2012-2030.
The city itself is also expanding. Under the "Master Plan to develop Hanoi to 2030 with a Vision Towards 2050," approved by the Ministry of Construction, Hanoi’s future administrative heart will be based in newly developed urban areas, which will also house new academic and medical institutions.
Along with implementing these plans, Hanoi's Department of Industry and Trade has also invested VND50 billion (US$2.37 million) to develop policies aimed at increasing export activity and boosting enterprise productivity in the city. These reforms include simplified administrative procedures and anti-corruption measures.
Foreign investment into Hanoi is significant, normally ranking in the top three provinces/municipalities in the nation. One major example is the recent license acquired by Samsung Electronics to build a research and development center in Hanoi to develop high tech products in Vietnam. The R&D center is a part of Samsung’s US$1.5 billion investment plan to make Vietnam one of its largest manufacturing bases in the world.
On a national scale, Samsung Electronics has already committed US$5.7 billion in investment, and other Samsung companies are planning mammoth thermal power, aviation and shipbuilding projects in the country.
Vietnam as a whole has experienced a resurgence of foreign direct investment inflows this year, increasing 66.5 percent during the first ten months of 2013, with a forecast of a 54.5 percent increase from 2013 to 2014. Hanoi has also benefitted from this rise, with FDI inflows growing nearly 300 percent during the first three quarters of 2013 compared to the prior year, reaching US$999.6 million.
In terms of imports and exports, Hanoi reached an export value of US$7.4 billion during the first three quarters of 2013 and imported US$17.2 billion in goods during that time. The city's largest export was computer components and peripherals, followed by garments and textiles, agricultural products and petroleum.
The Hanoi People’s Committee has reported that in the first quarter of 2014, the city’s GDP increased by 6.6 percent year-on-year (Y/Y). The city’s positive growth numbers mirror the growth occurring throughout the country.
Foreign direct investment (FDI) into the city has also seen positive movement. During the first quarter of 2014, Hanoi saw 55 newly-granted investment projects. These projects were worth a total of US$38 million.
However, in March, Hanoi’s consumer price index (CPI) rose by 5.99 percent Y/Y.
Export turnover has also been positive and is expected to amount to around US$2.5 billion, an increase of 9.8 percent Y/Y. In March, export turnover rose 5.4 percent over the previous month.
Import turnover also saw a small increase of 0.2 percent Y/Y – reaching US$5.5 billion.
For 2014, Hanoi has set a target of 8.5-9 percent GDP growth and an increased per capita income of VND57.5 - 58 million (US$2,736). Other objectives include the reduction of unemployment to less than 5 percent; an 8-8.8 percent growth rate for the construction industry sector; a growth rate of 2-2.5 percent in agricultural production, and an export turnover rate of 6-7 percent.
Vietnam has more than 25 industrial parks (IP) of various sizes scattered in and around its area.
One of the largest industrial parks is the Vietnam Singapore Industrial Park (VSIP). Located just 30 minutes away from the center of Hanoi, this IP is a joint flagship project between the governments of Vietnam and Singapore. The area is primarily zoned for industrial use and covers 500 hectares.
Hanoi Customs Department
Hanoi Department of Construction
Hanoi Department of Finance
Hanoi Department of Planning and Architecture
Hanoi Trade Promotion Center
American Chamber of Commerce
M Floor, Hilton Hanoi Opera No 1 Le Thanh Tong Street Hanoi, Vietnam
Tel: +84 4 3934 2790
Fax: +84 4 3934 2787
Australian Chamber of Commerce
Room 2707, AB Bank Building 101 Lang Ha Street, Dong Da District, Hanoi
Tel: +84 909 710 994
European Chamber of Commerce
GF, Sofitel Plaza Hanoi, 1 Thanh Nien Road, Ba Dinh District, Hanoi, Vietnam
Tel: (84-4) 3 715 2228
Fax: (84-4) 3 715 2218
Italian Chamber of Commerce
Casa Italia, 18 Le Phung Hieu, Hoan Kiem District, Hanoi
Tel: +84 4 3824 5997
US-ASEAN Business Council
15th Floor, Pacific Place 83B Ly Thuong Kiet Hanoi
Tel: +84 4 3930 6404
Vietnam Chamber of Commerce and Industry
No.9, Dao Duy Anh Street, Dong Da District, Hanoi, Vietnam
Tel: (84-4) 35743985
Fax: (84-4) 3.5743063
Intercontinental Hanoi Westlake
1a Nghi Tam Tay Ho Hanoi 00000 VIETNAM
15 Ngo Quyen Street Hoan Kiem District Hanoi
Tel: +84 4 3826 6919
Oriental Central Hotel
No. 39 Hang Bac Str, Hoan Kiem District, Hanoi, Vietnam
Tel: +84 4 3935 1117
Fax: +84 4 3935 0926
Sheraton Hanoi Hotel
K5 Nghi Tam, 11 Xuan Dieu Road · Tay Ho District · Hanoi · Vietnam
Thanh Nien News
The Business Times
Tuoi Tre News
Vietnam Investment Review