Regional Spotlight: Northeast Vietnam

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Mar. 15 – Geographic diversity has contributed greatly to the Northeast region’s economic success in recent years. The North is rich in mineral resources (coal, metals, building materials, industrial minerals, etc.), rivers and lakes, while the South is close to the capital city, Hanoi, and its “corridor” to the sea.

Enterprises involved in high technology, engineering and energy sectors have also seen rapid growth in recent years. For example, Wintek Corp, a Taiwanese manufaturer of panels for Apple Inc. iPhones, announced plans to invest US$150 million on a new plant in the Bac Giang province back in March 2011.

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Geography

The region is bordered by China to the North and Northeast. The Northeast is mostly mountainous in the North and center, with an average altitude of 700m. Small plains are found between the mountains in the North, as well as in the flat areas towards the coast and to the South.

There are many rivers that flow through this region, including the Red River, the Lo River, the Gam River, the Green River, the Bac Giang River, and the Ky Cung River. There are also many lakes in the region.

Industries

Even with the region’s rapid industrialization, agriculture remains an important source of livelihood for many, partially because of the area’s favorable climate and the abundance of water. Rice is the staple crop in addition to maize, potatoes, tea, lemongrass, citrus fruits and various vegetables.

The region has a good climate for tea plantations. The province of Thai Nguyen is one of the country’s biggest tea industry centers (second only to Lam Dong).

Marine products remain an important part of the region’s economy. Aquatic fauna is very abundant in the coastal province of Quang Ninh. There are several species of fish in the Gulf of Bac Bo, as well as special species of pearl mussels, stockfish, sea turtles and lobsters. Oysters and edible seaweed are also abundant along the coastline.

Forestry products have been estimated to take up approximately 3.5 million meters squared of wood and 500 million trees of bamboo and neohouzeaua per year. High-quality wood, in particular ironwood, teak trees and pine trees, are also available in the region. In the mountainous areas, there are a variety of trees and plants that can be used to create spices and traditional medicines.

The region is rich in mineral resources ranging from metals to precious stones, to non-metals and building materials. There are more than 300 mines that produce a total of 45 different types of minerals in the region, all found in large quantities. Given Dong Bac’s wealth of land, the region has huge potential for large-scale industrial projects.

The region has several hydroelectric power plants and coal fired thermal power plants. Plans to build additional power plants are in progress, including the Mong Duong Power Plant 1 and Mong Duong Power Plant 2 (two 500 MW generating units expected to be operational in 2014 and 2015, respectively).

The region has a medium-scale tourism industry compared to the country as a whole, with visitors drawn to the area by its attractive landscape, mountains, rivers and lakes. Sapa and Lao Cai are popular destination, with Sapa being one of Vietnam’s 21 national tourist areas thanks to its terraced rice fields attracting an increasing number of visitors.

Ha Long Bay, noted a World Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO), is another major tourist site in Vietnam. Other natural parks, such as the Ba Be Lake Natural Park and Tam Dao National Park, have been expanded in recent years.

Furthermore, a 245km expressway connecting key business hubs of Hanoi and Lao Cai will be completed in 2013.

The Cai Lan Port, close to the city of Ha Long in the coastal Quang Ninh province, is a deep-water marine port with proximity to navigable channels in the South China Sea. It is an integral part for marine transportation in the region.

Another significant port is Cam Pha in the Quang Ninh province, which is used for the export of coal from the region.

The region currently does not have any civil airports. The Hai Phong airport is reasonably close, and an airport in Lao Cai is proposed to be built within the next five years.

The transport of passenger and commercial cargo by rail is common, as Vietnam’s rail system has been upgraded in recent years. The Hai Phong railway to the Yunnan Province in China is of strategic importance for commerce.

Material for this article was taken from the May 2012 issue of Vietnam Briefing Magazine, titled “Vietnam’s Provinces, Regions, and Key Economic Zones,” which is available as a PDF download on the Asia Briefing Bookstore. In this issue, we discuss the industries and economy of Vietnam’s three levels of geographic divisions from the perspective of a potential foreign investor.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

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