Conference on Trade and Investment in Binh Duong Province, Vietnam
by
Christopher Runckel, President of Runckel &
Associates
The U.S. Consulate General in Ho Chi
Minh City and Binh Duong Province
jointly sponsored a conference on September 22, 2009 to collectively
better publicize opportunities for U.S. business in Binh Duong
Province, Vietnam. Binh Duong, which neighbors Ho Chi Minh City
and is one of the fastest growing locations in Southeast Asia, is
increasing efforts to attract U.S. and European business according to
Chairman of Binh Duong’s People’s Committee, Mr. Nguyen Hoang
Son.
Chairman Son said at the Conference in his opening remarks that the province would continue to improve its business environment and infrastructure to attract more investment, especially in green and hi-tech projects from foreign investors. The Chairman further noted that he and a large delegation from Binh Duong had just returned within the last few days from a business promotion trip to many countries in Europe. He said that interest in Europe was high in Binh Duong as a site for new factories and for participation in the Binh Duong new city (for more information on the new city, click here ) and other major infrastructure projects. Chairman Son said at the trade and investment conference that the southern province would not license polluting projects and those outside industrial parks to ensure better control over environmental issues. He noted that the province would focus on large projects that need well-trained employees rather than those that need a large number of unskilled workers. The province had invested heavily in new modern industrial parks to attract new projects and currently hosted 28 industrial parks. He further noted that the province had invested in a new University and aimed to have 60 per cent of its workforce trained by 2010. It was also working with HCM City and neighboring provinces to develop and improve its transportation infrastructure system as well as seaports and international airports, he said. Chairman Son was followed by the highest ranking official in the South of Vietnam, Kenneth J Fairfax, US Consul General in Ho Chi Minh City, who said Binh Duong has been successful in creating a new economic model for Viet Nam. Mr. Fairfax said that he was a big fan of Binh Duong because of the demonstrated vision, energy and leadership shown by the province.
Consul General Fairfax said "We also like to be inventive and we want to play a constructive role in helping Binh Duong and Viet Nam move forward by helping firms find suppliers and partners and introducing new investors." "Viet Nam is now at a particularly exciting but challenging stage in its economic development." Despite the recent global economic downturn, many American businesses continued to ask which sector they should invest in Viet Nam, he said. Mr. Fairfax who was joined by his Deputy Ms. Angela Dickey, and a very large contingent from the U.S. Consulate General representing Heads of all major sections and all key advisors dealing with not only economic issues but also cultural, consular and many other areas, noted his visit earlier in the day to Sparktronics. Sparktronics is a U.S. company that unlike companies contracted to U.S. companies like Nike, Columbia Sports, Addidas, etc. did not make clothing, shoes or high labor content products. Instead Sparktronics produced electronic products that required a higher number of engineers and highly trained technicians. Consul General Fairfax noted that American investors now are more focused on investing in hi-tech sectors rather than in garment or shoe factories, and that Sparktronics and companies like it are emblematic of the new trend. Around 200 American firms operating in the province, local businesses, and industrial parks took part in the conference hosted by the province and the US consulate general in HCM City. Binh Duong consistently achieved the top ranking in the country in the national competitive index (PCI) but last year lost out by less than half of a point to Danang for the top honors because of being downgraded on the basis of its website and for ports. (Please see the following link on this index: http://www.business-in-asia.com/comparison/pci_2008.html) Binh Duong has already started to revise its website and to better link with groups to increase transparency in the province in terms of economic opportunities and the Conference with the U.S. was a part of this effort. The province has attracted a total investment of US$12.8 billion so far, including US$330 million from US firms. So far this year it has attracted $2.33 billion.
Consul General Fairfax was followed by presentations by Mr. Huynh Van Trai, Head of the Ministry of Planning and Investment (MPI) office in Binh Duong and later by Chris Runckel, President of Runckel & Associates (www.business-in-asia.com) who presented on investment potential and opportunities in Binh Duong Province. Mr. Trai set-out the general performance of the province which as noted has been the best in SE Asia this year. Mr. Runckel amplified on Mr. Trai’s presentation by first noting the importance of the Southern Key Economic Zone (SKEZ) of which Ho Chi Minh City is the heart and Binh Duong the growing future. The SKEZ which includes Ho Chi Minh City, Binh Duong and surrounding provinces makes up nearly 40 percent of the country’s GDP; produces 75% of the country’s export revenue and is growing at a rate of 21.4% per year. The area hosts over 65 industrial parks which is by far the majority for the country as a whole. The areas population is over 15.2 million or 18% of the country’s total and includes nearly 10,000 local businesses and 2,000 foreign-invested businesses in Binh Duong alone representing not only a large production base but also a growing market for foreign goods and services. Mr. Runckel further noted the 2008 survey of the Japanese External Trade Organization (JETRO) which indicated that FDI capital in Vietnam between January and December, 2008 showed an increase of 42.3% over the previous year. Also that as many as 92.6% of Japanese manufacturers and 88% of Japanese non-manufactures surveyed in Vietnam planned for expansion. These are the highest ratios in the Southeast Asian region according to JETRO and indicate how not only U.S. but other Asian and European countries were becoming committed to Vietnam. Mr. Runckel was followed by Senior Advisor and Head of Marketing for Becamex, Mr. Vo Son Dien who presented on Binh Duong New Capital City project. Binh Duong is developing a huge infrastructure project, the country’s third largest comprehensive development zone measuring 42sq.km and consisting of industrial, commercial services, and civil administrative areas. The City includes not only offices for government officials but also includes a new university, hospital and large amounts of housing and mixed use projects planned to the highest technical standards to protect the environment and to increase esthetic appeal.
Pictures
above: Questions and Answers session followed the presentations
Final presentation before the question and answer session was presented by Mr. Thomas Siebert, Chairman of the American Chamber of Commerce in HCM City, who has long experience with Vietnam. Mr. Siebert was also positive in describing the province and its development. He said the province offers many advantages to investors like labour and incentives. According to official figures, working adults constitute more than 60 per cent of the province’s population, with 8,000 – 9,000 people leaving high school every year to join the workforce. The province offers a four-year tax waiver for projects with advanced technologies followed by 10 per cent tax reduction for the next 15 years, and 50 per cent reduction for the next nine. For other firms, the tax rate is 25 percent.
About the Author: Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (www.business-in-asia.com) Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service. |
