Enhancing competitiveness of capital's economy

Ten years after the expansion of the administrative boundary, the Hanoi municipal administration, the business community, and people are aware of the importance of "changing themselves" amid international integration and increasingly fierce competition. Thus, Hanoi has focused on implementing a number of measures to improve the quality and competitiveness of its economy.

At a Ha Yen Corporation's plant manufacturing industrial kitchen at the Hanoi Southern Supporting Industrial Park (photo: Khac Kien)
At a Ha Yen Corporation's plant manufacturing industrial kitchen at the Hanoi Southern Supporting Industrial Park (photo: Khac Kien)

Over the past ten years, Hanoi has maintained its economic growth rate at roughly 7.41% per year. Of which, services witnessed an annual increase of 7.52%, while the industry - construction sector rose 8.17% and agriculture went up 2.68%. Average income per capita has also soared sharply, reaching VND86 million (US$3,698) in 2017, 2.3 times higher than in 2008.

The economic structure has also witnessed a positive shift with the increase in the proportion of services and industry - construction sectors and the decrease in the proportion of the agricultural sector. In particular, the construction sector continues to thrive with the building and inauguration of a large number of socio-economic facilities, urban areas, and transport works, which have contributed to completing Hanoi’s infrastructure, as well as attracting investment and boosting the growth of the production and service sectors.

The city also attaches great importance to developing high and clean technologies and products of high competitiveness in both the domestic and foreign markets. Hanoi has so far developed 59 key industrial products with their total export turnover accounting for 10% of the total export turnover of Hanoi.

By the end of 2017, Hanoi reported 11,018 firms in the areas of information technology, high technology and electronic industry with the majority of them located at hi-tech zones and industrial zones.

Deputy Director of Hanoi Department of Industry and Trade, Nguyen Thanh Hai, said that the city has implemented a series of measures to improve the competitiveness of enterprises, including loan support, preferential interest rates, trade promotions, and land, tax, customs and investment support.

Hai noted that the city's investment and business environment has been gradually improved. Notably, the Provincial Competitiveness Index (PCI) has advanced steadily for six consecutive years and reached 13th among the 63 provinces and cities in 2017, the highest ever thus far, helping to raise the trust of domestic and foreign investors.

Hanoi is also ranked in the top 10 most dynamic cities in the world, Hai said, adding that the city is implementing numerous plans to support start-up businesses and is striving to have 400,000 newly established enterprises by 2020.

However, according to Vice Chairman of the Hanoi Small and Medium Enterprises Association, Mac Quoc Anh, the majority of Hanoian businesses are small in scale with low competitiveness and out-dated equipment, while producing low value added products. Businesses often face capital and human resources shortages and difficulties in approaching resources for development. Therefore, enhancing the competitiveness of enterprises in the context of the Industrial 4.0 is an urgent need.

Chairman of Hanoi municipal People's Committee, Nguyen Duc Chung, said that, in order to improve the competitiveness of the capital's economy, Hanoi will continue to promote economic restructuring, encourage and boost high-quality services, and enhance the efficiency of its import-export activities.

In addition, the city will give heed to promoting science and technology aligned with the development of a knowledge-based economy and the acceleration of the application of science and technology in industrial and agricultural production. It is also necessary to step up the training of high-quality labourers to meet the demand of hi- tech sectors.

Chairman Chung noted that the city strives to achieve an average GRDP growth of 7.4% per year in the 2016 - 2020 period (according to the new calculation method) and an average income per capita of VND126-129 million (US$5,418-US$5,547) by 2020, so that Hanoi is worthy of being the leading economic hub of the country.