Bac Giang: An Emerging Investment Destination

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Bac Giang An Emerging Investment Destination

By: Dezan Shira & Associates
Editor: Koushan Das

Surrounded by major economic hubs, ports, national highways, and an international border, Bac Giang province in northeastern Vietnam is situated at the crossroads of major trade routes. It is located adjacent to the key economic triangle Hanoi – Hai Phong – Quang Ninh, 110 km from the Huu Nghi Border Gate with China, 100 km from Hai Phong seaport, and 40 km from Noi Bai international airport. With its growing gross regional domestic product (GRDP), income per capita, trade, and favorable location, the province has started to emerge as an investment destination.

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Economic growth

In 2017, the GRDP growth rate reached the highest ever at 13.3 percent, to 69 trillion VND (US$ 3 billion). The average GRDP per person also increased in 2017 by US$174 to US$1,850.

Sector growth

In 2017, the industry-construction grew by 25.5 percent, with the industry sector and construction sector growing by growing 29.3 percent and 10.8 percent respectively. The services sector also grew by 8.2 percent, while agriculture, forestry, and fishery declined by 1.5 percent.

Taking note of the decline in the agriculture sector, the provincial government is trying to create favorable conditions for investment in high-tech agriculture and rural areas. They are also trying to promote branding, packaging, and product labeling in the sector for value addition.

The tourism sector registered an increase in tourists’ footfall in 2017 to 1.13 million, 2.1 times more than in 2016.

Economic structure

The industry-construction sector accounted for the majority of the economy at 46.1 percent, while the services sector accounted for 33.3 percent in 2017. Both increased by 4.8 percent and 1.4 percent respectively, compared to 2016.  

As growth declined in the agriculture, forestry and fishery sector, the share in economy reduced by 6.2 percent compared to 2016 to 20.6 percent.


In 2017, the exports revenue was estimated at US$ 6.2 billion, an increase of 70.8 percent, while import value reached US$ 6 billion, an increase of 58.1 percent, compared to 2016.

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To date, Bac Giang has attracted 1,331 projects. It includes 1,010 domestic projects with total registered capital of over 82.6 trillion VND (US$ 3.6 billion), and 321 FDI projects valued at US$ 3.8 billion. In total, there are 7,112 domestic businesses worth over 45 trillion VND (US$2 billion) and 311 FDI firms worth US$ 3.14 billion in the province.

2017 investments

In 2017, the province attracted 159 domestic and 63 foreign-invested projects, with registered capital amounting to 29 trillion VND (US$ 1.27 billion) and US$ 761 million respectively. In addition, 12 domestic projects and 35 FDI projects increased their investments by 388 billion VND (US$ 17 million) and US$ 137.2 million respectively.

Sector share in investments

For domestic projects, industry and manufacturing sector accounted for 83.8 percent, while the services sector accounted for 14 percent of investments. Agriculture only accounted for 2.2 percent of the total registered capital. For FDI projects, the industry/manufacturing and services sector accounted for 64.5 percent and 35.5 percent respectively in 2017.

The provincial government has numerous preferential policies based on locations and industry. Depending on the sector and investment destination, investors receive land rent exemption for up to 15 years. Incentives are also offered in enterprises and import/export taxes based on projects. In addition, the government also provides assistance to investors regarding investments, land lease procedures, land clearance, infrastructure, and labor training.

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Regional Competition

According to the Provincial Competitiveness Index 2016 (PCI), Bac Giang ranks the 33rd most competitive province in the country amongst 63 regions, jumping seven places compared to previous year.

In 2017, the Bac Giang province ranked 8th out of 63 provinces and cities in terms of the number of FDI projects and 11th out of 63 in registered capital.


The region has six Industrial Parks, namely, Dinh Tram, Quang Chau, Song Khe – Noi Hoang, Van Trung, Viet – Han (Vietnam – Republic of Korea) and Hoa Phu spread over 1,322 hectares. In addition, the region is also home to 35 Industrial clusters spread over 500 hectares.

The region is well connected with its neighboring provinces through major highways such as 1A, 31, 37, 279, 17, and the recently reopened Ha Noi-Bac Giang Expressway which handles the increased traffic between Ha Noi City, Bac Ninh Province, and Bac Giang Province.

In terms of rail connectivity, Bac Giang is part of two major railway networks, Kep – Halong, and Hanoi – Dong Dang, with the latter extending up to the Vietnam-China border. Apart from the road and rail networks, the inland water navigation also has a lot of potential. The region has three major rivers, Thuong, Cau, and Luc Nam, which can accommodate vessels of 40MT to 500 MT. In addition, the Hai Phong Port, the leading seaport for northern Vietnam is only 100 km from the province.

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Going forward, the provincial government has decided to focus on high-tech projects, such as electronics, machinery, and consumer goods, which are capable of joining global value chains and has high export potential. With more industrial parks under development, the government is devising investor-friendly policies, in the hope of attracting high-tech investments. In addition, the government has also started to invest in the declining agriculture sector to develop high-tech agricultural farms.

Bac Giang has already improved much of the business conditions related to foreign investments and is in the process of reforming them further to ease investor concerns. Due to its favorable location, connectivity, and investor-friendly policies, Bac Giang province will continue to offer attractive investment opportunities for investors.


Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEANChinaIndiaIndonesiaRussia & the Silk Road. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.

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