125 “ENHANCING FDI FROM EAST ASIA INTO HANOI”

Therefore, attracting moreand attracting effectively investment projects from East Asia will bring Hanoi inparticular and Vietnam long-term benefits.. Aims of the study The aim of study

THE MINISTRY OF FINANCE ACADEMY OF FINANCE -

THE GRADUATION THESIS

Topic:

“ENHANCING FDI FROM EAST ASIA INTO HANOI”

Internship Place: Hanoi Promotion Agency

Student: Nguyen Phuong Dung

Class: CQ52/08.03

Internship Supervisor: M.A Cao Phuong Thao

Hanoi – 2018

TABLE OF CONTENTS

DECLARATION …… …

ACKNOWLEDGEMENT

LIST OF ABBREVIATIONS ……… … … …

LIST OF TABLES ……… ……… …

INTRODUCTION … … … …

a Rationale of the study … … … …

b Aims of the study … …… … …

c Methods of study …….… … …

d The scope of the study……… … …

e Organization of the study … ………….…… …

CHAPTER 1: THE THEORETICAL BACKGROUND OF FOREIGN DIRECT INVESTMENT (FDI) & ATTRACTING FDI ………… …………

1.1 Foreign Direct Investment (FDI)……… ……….………

1.1.1 Definition of FDI…….……… ……… ………

1.1.2 Characteristics of FDI……….……… ……… ……

1.1.3 Classifications of FDI……… ………

1.1.4 Roles of FDI……….……… ……… ……

1.2 Attracting FDI……….……… ……… ……

1.2.1 Attracting FDI activities ………… ………

1.2.2 Factors affecting the FDI attraction efficiency…… ………

1.2.2.1 Macro factors ………

1.2.2.2 Factors from locality ………… ………

1.2.2.3 Factors from foreign investors ………… ………

1.3 Attracting FDI – Experiences & Lessons for Hanoi ………… ………

1.3.1 Attracting FDI experiences of some localities ………… ………

1.3.1.1 Attracting FDI experiences of Bac Ninh ………… ………

1.3.1.2 Attracting FDI experiences of Hai Phong ………… ………

1.3.1.3 Attracting FDI experiences of Quang Ninh ………… ……….

1.3.2 Attracting FDI lessons for Hanoi ………… ………

CHAPTER 2: ENHANCING FDI FROM EAST ASIA INTO HANOI … …

2.1 Overview of Hanoi & FDI into Hanoi ……… ………

2.1.1 Overview of Hanoi……… …………

2.1.1.1 Natural & Environmental Conditions………

2.1.1.2 Socio-Economic Characteristics ………

2.1.1.3 Population & Labor Characteristics………

2.1.2 Overview of FDI in Hanoi ………….………

2.1.2.1 FDI in Vietnam ……….………

2.1.2.2 FDI in Hanoi ……… ………….………

2.2 Situation of attracting FDI from East Asia in Hanoi ………

2.2.1 FDI from East Asia into Hanoi ………

2.2.2.1 By countries … ………… …….………

2.2.2.2 By sectors ……… …………

2.2.2.3 By forms of investment ………

2.2.3 Situation of attracting FDI from East Asia in Hanoi … ……… ………

2.2.3.1 The target of attracting FDI from East Asia in Hanoi … …… …… ……

2.2.3.2 FDI encouragement policies ………….………

2.2.3.3 The overall infrastructure plan in Hanoi … …… ………

2.2.3.4 Attracting FDI promotion ……… ………

2.3 Evaluating the situation of attracting FDI from East Asia into Hanoi …….

2.3.1 Achievements ….………

2.3.2 Restrictions & Causes of restrictions……… ………

2.3.2.1 Restrictions……… ………

2.3.2.2 Causes of restrictions………… ……… …………

CHAPTER 3: SOLUTIONS TO ENHANCE FDI FROM EAST ASIA INTO HANOI ………

3.1 Orientations of attracting FDI from East Asia into Hanoi ……….

3.1.1 Prediction of Socio-Economic context into Hanoi until 2020, vision 2025 3.1.2 Orientations of attracting FDI into Hanoi ……… ……… 3.1.3 Opportunities & Challenges in attracting FDI from East Asia into Hanoi ……3.1.3.1 Opportunities……… 3.1.3.2 Challenges……… ………

3.2 Solutions to enhace FDI from East Asia into Hanoi … ……….

3.2.1 Complete the target of attracting FDI from East Asia into Hanoi … ……… 3.2.2 Complete the overall infrastructure plan in attracting FDI from East Asia intoHanoi ……… 3.2.3 Complete the generous policies system………….……… 3.2.4 Improve the effectiveness of investment promotion …… ………3.2.5 Increasing the quality of human resources & management capacity of staff…

3.3 Petition……… ……… …

CONCLUSION………REFERENCES………

1 Số lượng & tỉ trọng của số dự án, số vốn đăng kí, số vốn thực hiện FDI Hà Nộitheo từng năm từ 2013-2017

2 Doanh thu và nộp ngân sách của các doanh nghiệp FDI tại Hà Nội từ 2013-2017

3 Thu hút đầu tư trực tiếp nước ngoài vào tại Hà Nội phân theo hình thức đầu tư từnăm 2013-2017

4 Cơ cấu vốn đầu tư FDI phân theo quốc gia đầu tư đến năm 2017 tại Hả Nội

I hereby declare that this thesis is my own work and effort It has not beensubmitted anywhere for an award Where other sources of information have beenused, they have been acknowledged

Graduation thesis author

Nguyen Phuong Dung

To begin with, I would like to express my sincere gratitude to M.A Cao PhuongThao, my venerable supervisor, for her meticulous instructions, enthralling advice,generous time for the report preparation and helpful critiques guidance to my finalreport

My thank you is also strongly given to Mr Chu Toan Chung, my internshipguide, for his fervent support and assistance in providing me with information andexperience in securities area specifically and Hanoi Promotion Agency generally.What is more, his commitment and dedication to his job arouse a sense ofinspiration to me, which can help me develop my career path at some levels in thefuture

Last but not least, I would like to thank for all the staff at Hanoi PromotionAgency, especially Investment Department for their enthusiastic guidance andrecommendations during my internship

This study

LIST OF ABBREVIATIONS

ANMC21 Asian Network of Major Cities 21

BCC Business Cooperation Contract

FDI Foreign Direct Investment

FIA Foreign Investment Agency

FTA Free Trade Agreement

IMF International Monetary Fund

KIET Korea Institute for Industrial Economics and Trade

MNCs Multinational Corporations

NKER Northern Key Economic Region

PCI Provincial Competitiveness Index

LIST OF TABLES

Table 2.1: GRDP growth of Hanoi city from 2007 – 2017……… Table 2.2: FDI projects licensed in period 2010 - 2016 ……… Table 2.3 Ranking of FDI from East Asia into Vietnam … ……… Table 2.4 FDI capital in Hanoi by number of projects and registered capital……….Table 2.5 Number of projects and registered capital of 20 main countries, partners Table 2.6 FDI attraction of Northern Key Economic Region from 1/1/1988 to31/12/2016………Table 3.1 Sectors with suitable foreign partners in attracting FDI from East Asia ………

LIST OF FIGURES

Figure 2.1: Total registered FDI capital in Vietnam by main counterparts(Accumulation of projects having effect as of 31/12/2016)………

INTRODUCTION

a Rationale of the study

In the period of innovation, industrialization and modernization in Vietnam,FDI has proved to be an important supplementary capital for the economy,contributing to the country's growth and development Exploiting and using FDIeffectively becomes a task and a problem for the economy, for each region andlocality to change and develop, including Hanoi

Hanoi has a thousand of years of history with the culture and tradition ofelegance and hospitality After 30 years of innovation, Hanoi has made significantachievements in socio-economic development, improving people’s lives With thenatural conditions and abundant resources for development, the Capital economydeserves its leading position and the driving force of economic development of theNorth and across the country, and becomes an attractive location for foreigninvestors

Among the FDI partners of Hanoi nowadays, East Asian countries haverecognized that Hanoi is a really attractive place to invest in Besides, up to the end

of 2017, FDI inflows from East Asia accounted for 51.93% of total FDI inflowsinto Hanoi, totaling USD 152.53 billion, Japan ranks the 1st, followed by Korea,Hong Kong, It shows that the investment capital inflow from East Asian countriesaccounts for a large proportion of total FDI into Hanoi Therefore, attracting moreand attracting effectively investment projects from East Asia will bring Hanoi inparticular and Vietnam long-term benefits

For the purpose of giving opinions and comments to contribute to improvesolutions in attracting FDI from East Asia into Hanoi in the future, I decided toselect the topic "Enhancing FDI from East Asia into Hanoi” as a graduate thesis

b Aims of the study

The aim of study is to base on the basic theory of foreign direct investment andEast Asia to analyze and evaluate the positive and negative aspects of thisinvestment capital inflow in Hanoi From that, find out the causes as well as the

development of predictions, objectives, principles and solutions to enhance theability to attract FDI flows from East Asian countries into Hanoi in the future.

c Methods of study

The subject was reviewed, from the theoretical point of view, to the assessment

of the characteristics and effects of FDI to the Vietnamese economy for theproblem

d The scope of the study

To study the current situation of attracting FDI to Vietnam's economy beforeand after joining the AEC, considering causes on subjective and objective aspects,and presenting The main solution to increase the attractiveness of FDI is the goal ofsustainable economic development of our country in the context of deepintegration

e Organization of the study

Besides the Contents, Introduction, Conclusion and References, the thesis consists of 3 chapters:

Chapter 1: The theoretical background of foreign direct investment

(FDI)

Chapter 2: Enhancing FDI from East Asia into Hanoi

Chapter 3: Solutions to attract FDI from East Asia into Hanoi

CHAPTER 1: THE THEORETICAL BACKGROUND OF FOREIGN DIRECT INVESTMENT (FDI) & ATTRACTING FDI

1.1 Foreign Direct Investment (FDI)

1.1.1 Definition of FDI

Foreign Direct Investment (FDI) is a key element in this rapidly evolvinginternational economic integration, also referred to as globalization FDI provides ameans for creating direct, stable and long-lasting links between economies Underthe right policy environment, it can serve as an important vehicle for localenterprise development, and it may also help improve the competitive position ofboth the recipient (host) and the investing (home) economy In particular, FDIencourages the transfer of technology and know-how between economies It alsoprovides an opportunity for the home economy to promote its product more widely

in international markets FDI, in addition to its positive effect on the development

of international trade, is an important source of capital for a range of host and homeeconomies

FDI can be described as investment made by a foreign entity in the equity of adomestic company (Target Company) with the intention of participating in themanagement of the enterprise

Alternatively it can be described as an investment transaction in which aninvestors from one country (home country) seeks to obtain managerial interest in anentity in another country (host country) for direct controlling and operatingphysical assests created through such investments

FDI may be defined by various authors as follows:

According to IMF and OECD: FDI is the category of international investmentthat reflects the objective of a resident entity in one economy obtaining a lastinginterest in an enterprise resident in another economy (The resident entity is thedirect investor and the enterprise is the direct investment enterprise.) The lastinginterest implies the existence of a long-term relationship between the direct investorand the direct investment enterprise and a significant degree of influence by the

investor on the management of the enterprise Direct investment comprises not onlythe initial transaction establishing the relationship between the investor and theenterprise but also all subsequent transactions between them and among affiliatedenterprises, both incorporated and unincorporated

An FDI investor does not have to control the whole company they invest, theyonly need to hold a minimum amount of shares or voting rights in that business The 5th Edition of the IMF’s Balance of Payment Manual defines the owner of 10%

or more of a company’s capital as a direct investor The IMF recommends usingthis percentage as the basic dividing line between direct investment and portfolioinvestment in the form of shareholdings Thus, when a non-resident who previouslyhad no equity in a resident enterprise purchases 10% or more of the shares of thatenterprise from a resident, the price of equity holdings acquired should be recorded

as direct investment

According to WTO: FDI occurs when an investor based in one country (thehome country) acquires an asset in another country (the host country) with theintent to manage that asset The management dimension is what distinguishes FDIfrom portfolio investment in foreign stocks, bonds and other financial instruments

In most instances, both the investor and the asset it manages abroad are businessfirms In such cases, the investor is typically referred to as the “parent firm” and theasset as the “affiliate” or “subsidiary”

According to UNCTAD: FDI is defined as an investment involving a long-termrelationship and reflecting a lasting interest and control by a resident entity in oneeconomy (foreign direct investor or parent enterprise) in an enterprise resident in aneconomy other than that of the foreign direct investor (FDI enterprise or affiliateenterprise or foreign affiliate) FDI implies that the investor exerts a significantdegree of influence on the management of the enterprise resident in the othereconomy Such investment involves both the initial transaction between the twoentities and all subsequent transactions between them and among foreign affiliates,

both incorporated and unincorporated FDI may be undertaken by individuals aswell as business entities.

In Vietnam, according to The Law on Foreign Investment in Vietnam L/CTN of November 12,1996): "Foreign direct investment" means the transfer of

(No.52-capital in money or any asset into Vietnam by foreign investors to carry out

investment activities in accordance with the provisions of this Law And "Foreign

investor" means a foreign economic organization or a foreign individual investing

in Vietnam

So, FDI can be defined as the international transfer of capital, in which theowner of capital is also the person who directly manages and administers thecapital using The birth of FDI is the inevitable result of internalization andinternational division of labor

1.1.2 Characteristics of FDI

FDI is characterized by some main features:

First, foreign investors are capital contributors and also directly involved in the

organization, management and administration of investment activities Themanagement will depend on the capital contribution of the investor in the legalcapital of the project If they are 100% foreign owned, they will have full controlover the investment This is common feature of FDI that distinguishes FDI from

other types of investment is represented in term “control” or “controlling interest”.

Second, FDI is long-term investment which would last about 10 years Physical

content of FDI is not only capital or cash, but technique, reputations and brand ortrademark This is one of the key points that the recipient country towards whencalling for investment, especially in developing countries with scientific-technicallevel and management capacity is limited Therefore, for recipient country, this isneeded long-term capital in the economy

Third, FDI is a highly feasible and efficient investment form without political

constraints Distributing the rights and obligations of the investor based on theinitial capital contribution ratio And according to this ratio, business results will

bring income and share benefits to the investors of the project Whereby the riskswill also be shared among the parties This is an advantage over other forms offoreign investment

Forth, FDI keeps the recipient country from constraints in political, military

and especially leaving no debt burden for the economy of the host country.Although FDI is still dominated by the government, FDI is less dependent on thepolitical relationship between the two countries However, a country will be at risk

if it is too dependent on this external capital

Fifth, the investors in this kind of investment would be different subjects in

different countries who join together in investment activities

Sixth, usually, FDI has been done in the field of production, which directly

supply products for society FDI has been performed in a form of FDI enterprise orFDI project, operated in production field of host country

Seventh, the implementation method is mainly through investment projects

1.1.3 Classifications of FDI

FDI has many forms Broadly, FDI includes “mergers and acquisitions, buildingnew facilities, reinvesting profits earned from overseas operations andintracompany loans” In a narrow sense, FDI refers just to building new facilities.According to The Law on Foreign Investment in Vietnam, foreign investors mayinvest in Vietnam in any of the following forms:

1 Business co-operation on the basis of a business co-operation contract (BCC)

Business cooperation contract (BCC) means a contract signed between foreigninvestors and domestic investors for business cooperation and profit or product

distribution without establishing a new economic organization

BCC is a form of investment that the contracting parties agree to carry out one

or more production and business activities in the receiving country on the basis ofclearly defining the object, business content, obligations, responsibility anddivision of business results for the parties

BCC has the advantages of solving the shortage of capital and technologysituation; create new markets; earnings are relatively stable This method usuallydoes not require large capital and the contract term is often short But the recipientcountry can not learn business experience, management,… Besides, BCC formdoes not set up a new legal entity, so investors are difficult to control theeffectiveness of business operations Thus, it is not easy to attract the potentialforeign investors.

However, this form of investment is still the simplest form, requiring nocomplicated legal procedures, which is often chosen in the first stage of FDIattraction

2 Joint venture enterprise

An agreement by two companies, typically one foreign and one domestic towork together for mutual benefit with specific ownership percentages specified in along-term contract These two companies set up a third company (the joint ventureenterprise) This new company would usually be located in the same country as one

of the two partner companies, with the purpose of mutually establishing an activitywith its own objectives: marketing and distribution, research, manufacturing, The terms of some joint ventures deals are regulated heavily by governments ofcertain countries (mainly developing counties) as to the limits of foreign ownershipand the minimum amounts of money or assets invested Companies of differentcountries that enter into a joint venture govern their relationship through theinternational joint venture contract

The goal of joint ventures between developed and developing countries isbasically different Joint ventures in developed countries are aimed atconcentrating, diversifying products, reducing risks in the business, finding newmarkets and jointly exploiting resources While joint ventures in developingcountries is to be transferred skills, technology, and to learn the marketmanagement

Joint venture enterprise has many advantages for both investors and investors.With the recipient country, this form contributes to solving the shortage of capital;sharing risks; having the opportunity to renovate technology and diversifyproducts; to create employment opportunities for laborers, to learn and acquiremanagerial skills from abroad Furthermore, foreign investors can be controlled.For investors, this is a way to enter the domestic market legally and effectivelywhen not thoroughly understand the recipient country, to create new markets and toexpand development.

However, this form also has weaknesses It is easy to occur conflicts in theoperation process and enterprise management process Due to the combination ofdifferent countries, different customs and different political regime lead todifferences in views and ways in doing business

3 Enterprise with one hundred (100) per cent foreign owned capital.

100% foreign owned enterprises are the most popular and traditional form Inthis form, the enterprise is owned by the foreign investor but must be controlled bythe law of the host country It remains an economic entity in the host country, but isunder the ownership of foreign investors, they decide on all matters related to theoperation and development of the enterprise as well as taking full responsibility forthe production and business results

The form of 100% foreign capital has advantages for both foreign investors andrecipient countries The advantage for the host country is no need to contributecapital and to take responsibility for the business results of the investment in high-risk areas or for new manufacturing industries Meanwhile, this investment alsoprovides employments for the population of the recipient country For foreigninvestors, this is also the preferred form of investment, they can actively invest inmany methods Apart from having to abide by laws and regulations of the hostcountry, investors have the right to decide on business issues in order to achievehigh business efficiency They have full control over the management and operation

of theirs business., without any interference, and does not take much time to find

"common voice" with co-operators as joint venture enterprise

However, this form also has its limitations such as: the host country is difficult

to manage the investors, difficult to acquire the level of technology andmanagement from these enterprises

4 Other forms

Besides the above forms, there are also forms such as BOT, BTO, BT

Build-operate-transfer contract (BOT) means a form of investment signed

between a competent state body and an investor for the construction andcommercial operation of an infrastructure facility for a definite duration; upon theexpiration of such duration, the investor shall transfer such facility to the statewithout any refunds

BOT's derivative forms are BTO and BT, which have some changes ininvestment procedures, operation and transfer between the investor and the hostcountry

Build-transfer-operate contract (BTO) means a form of investment signed

between a competent state body and an investor for the construction of aninfrastructure facility; upon the completion of construction, the investor shalltransfer such facility to the state; the government shall grant the investor the right

to commercially operate such facility for a definite duration in order to recoverinvestment capital and gain profits

Build-transfer contract (BT) means a form of investment signed between a

competent state body and an investor for the construction of an infrastructurefacility; upon the completion of construction, the investor shall transfer suchfacility to the state; the government shall create conditions for the investor toexecute other projects in order to recover investment capital and gain profits or paythe investor under agreements in the BT contract

The basic characteristics of these forms are: one party of the contract is thestate; these forms are implemented in the field of infrastructure construction; and

by the deadline, investor shall transfer such facility to the host country without anyrefunds

In these forms, the host countries can attract investment in infrastructureprojects, require high capital, have long repayment periods, And they will havecomplete facilities conditions for economic development

However, these forms are also high risk, and the host country is difficult toreceive experience, technology from foreign investors

1.1.4 Roles of FDI

FDI assists economic growth and development Through FDI, a huge amount ofcapital has been injected into the economy, directly leading to an increase inexpenses of the whole society, which in turn grows the economy FDI also helpedthe economies of the host countries to obtain a launching pad from where they canmake further improvements In addition, it has been observed that FDI has beenable to improve the infrastructural condition of a country The standard of living ofthe general public of the host country could be improved as a result of the FDImade in a country

FDI plays an extraodinary and growing role in global business, and assists theeconomic development of both home and recipient countries

1.1.4.1 For home countries

For the capital exporter or investor, investing overseas is seeking opportunities

to improve the efficiency of using the recipient countries’ advantages, in order toimprove the return on investment (ROI) ratio, build a market that provides stableinputs at an affordable price and lower costs Then, businesses can enhance theireconomic strength and brand reputation by building factories and manufacturingfacilities, selling products in foreign markets, With the purpose of market-seeking, new markets in the recipient countries are always a goal for investors Some of the specific benefits of foreign investors include:

- FDI brings wealth to the investors, broadens economic scales and minimizesthe trade-off costs

- FDI is a good way for investors to seek natural resources and cheap labor FDIhelps investors to increase their overseas sales on the basis of exploitingcomparative advantage, and to reduce production costs by exploiting the cheap andabundant labor force of the host countries

- In addition, FDI helps extending the life cycle of the products when thedomestic market has moved into recession

- Break tariff barriers in countries that tend to be protected

1.1.4.2 For recipient countries

Developing countries, which are poor countries with low internal accumulation,are not only dependent on domestic accumulation but rely on external sources ofcapital, including FDI for their high economic growth

- FDI is an important additional source of capital for the economic growthpromotion, especially for developing countries Foreign investment also is animportant source of technological development In this way, the recipient countrycan reach the new technology and be guided directly by foreigners Throughintroducing technology, the competitiveness of developed countries on theinternational market will be enhanced Generally, technology is the decisive factorfor each nation’s growth and development However, depends on how the recipientcountries actively attract the foreign investment, they will access to moderntechnologies or to disposal technologies of the developed countries

- Inward FDI has the potential for job creation and employment By introducingnew industries, building new factories and broadening production, FDI creates jobopportunities for people living in the recipient economy, which is often followed byhigher wages and salaries Thus, FDI also develops human resources and income ofthe population This role of FDI is not only for developing countries but also fordeveloped countries, especially when the economy enters a period of crisis

- FDI has the effect of mobilizing the economy, affecting the process ofeconomic restructuring For developing countries, FDI facilitates the shift ofproduction structure, breaking the closed production structure in a self-sufficientmanner Developing countries are mainly agricultural countries, that’s why, whenattracting FDI, the host countries will focus on industry, trade and services todevelop new economic aspects, and to improve their overall economy.

- FDI allows developing countries to learn from experiences, modernproduction-line management skills, and to improve the professional skills as well asthe self-awareness of local workers Therefore, it can provide a strong impetus toeconomic development

- FDI also enhances trade in recipient countries FDI have opened a widespectrum of opportunities in the trading of goods and services, both in terms ofimport and export production Export is an important factor in economicdevelopment Foreign investors, beside exploiting the market, their aim is also toreduce the cost of production And then, the products will be exported to theinternational markets By boosting exports, the advantages of production elements

in host countries are more effectively exploited Besides, thanks to FDI, tradepolicies and regulations have been improved, it leads to the decline in tradebarriers As a result, one of the encouragement policies for foreign investment ofthe host countries is that exports are always specially privileged

Through the development, it can be observed that FDI is not only benefit torecipient countries, but also home countries However, FDI has many drawbacks,despite its overall effectiveness in promoting economic growth and society FDIfocuses on some fields of the economy, while other areas has no investment;leading to an unbalanced and unstable situation in the economy There are concernsthat FDI may disrupt local industry disparity Besides, there are argument that once

a foreign investment becomes profitable, capital begins to flow out of the hostcountry and goes back the investor's country Additionally, FDI can create a sudden

movement of capital flows hat may hurt the economy by capital stock: a largeamount of FDI capital may flow in as quickly as flow out of the recipient countries

1.2 Attracting FDI

1.2.1 Definition of attracting FDI

Foreign investment is becoming more and more important to every nation ingeneral and locality in particular because of the benefit of FDI to both recipient andhome countries Therefore, attracting capital is increasingly focused and promotedimplementation

Investment attraction is the totality of measures to gather resources to carry outthe investment activities for certain aims Attracting FDI is the overall measure ofmoving resources from abroad into one country to carry out the investmentactivities in order to effectively exploit domestic resources and then achieve othergoals

It can be understood that attracting FDI is all the activities of state, localauthorities, as well as businesses to promote, mobilize, stimulate, encourage theforeign investors to invest into locality In essence, attracting capital is an activitythat aims to attract the attention of foreign investors to bring capital into localitiesFor a country or a locality, there are several possible ways to attract FDI:

Firstly, focused attraction is a way to attract resources focusing on certain areassuch as industrial zones, hi-tech parks, export processing zones With this method,the FDI capital will take advantage of the scale and easy to manage, However, itcan lead to uneven development between regions, areas in the investment area.The second method is decentralized attraction: With this method, FDI isallocated to different areas without focus at some points This method can avoidconcentrating and developing unevenly between regions but is difficult to manageand does not take advantage of the scale of economies

Attracting FDI has 2 forms: active and passive Active form is the way in whichlocalities actively seek and exploit foreign partners to persuade them to invest intheir local businesses, develop legal policies that focus on sectors should attract

investment Passive form is that localities passively wait for investors to come in,then they will introduce their advantages to call for investors to invest.

1.2.2 Contents of attracting FDI

The purpose of attracting foreign direct investment is to increase theattractiveness of the investing environment in the eyes of foreign investors To dothis, the host country uses a system of policies and activities that are relevant toattracting investment This system can be divided into three groups corresponding

to three stages of the investment life cycle: (i) inviting investors (ii) investmentsupport and (iii) post-investment support

Accordingly, the contents required during the inviting phase include (i)identification of attracting FDI targets (ii) development of a specific investmentattraction strategy (iii) investment promotion (iv) planning and development ofsupporting infrastructure and (v) after-investment supporting plan

The following are specific contents of FDI attraction in Vietnam

1.2.2.1 Identification of attracting FDI targets

Defining the aim of FDI attraction

Nowadays, Vietnam prioritize investors, who can invest into Vietnam by thefollowing directions:

Firstly, helping Vietnam to shift its economic structure towardsindustrialization-modernization, to form a modern industrial and service structure,

in which industry plays an important role, accelerates the economic growth oflocality as well as of country

Secondly, helping to exploit and use efficiently the raw materials resources inthe country and the available raw materials in locality; increase the quality ofprocessing of local agricultural-forestry materials, then contributing to increase thelocality's export turnover in the future

Third: Helping to generate the foreign currency revenue and contributing toraise revenue for the state; then step by step create a healthy competitive

environment in order to boost the economic development and create more jobs forlaborers.

Identify the sector that should encourages FDI

Firstly: Prioritizing the investment projects in infrastructure and hightechnology Attracting high-tech FDI is not only aimed at solving the capitalscarcity for socially developmental investment but also aimed at creating more jobsfor laborers, providing advanced machinery and technology for the economy Inaddition, attracting high-tech FDI also helps to produce many high quality and hightechnological products, contributing to the development of the national economyand at the same time creating an integrated strength for the cause ofindustrialization and modernization

Secondly: Prioritizing the projects that needs a large amount of labors,especially on-the-job training projects, which contribute to provide employment forthe local population, construction socio-economic development

1.2.2.2 Planning and developing infrastructure to attract FDI

Firstly, the local infrastructure development plannings will be developed in thedirection of speeding up the construction and approval of the waiting plannings;checking for periodic addition and adjustment of the old plannings to createfavorable conditions for foreign investors to identify and develop the project Andcomprehensively and independently implementing the new provisions of the Law

on Investment in the planning work, ensuring that it is compliant with internationalcommitments

Secondly, completing the land use planning, widely publicizing the plan, andcreating conditions to speed up the progress of land clearance for investmentprojects; then doing examination and adjusting the land use planning in an effectivemanner, especially in the coastal areas, in order to ensure the sustainable economic-environmental development

Thirdly, taking full advantage of the resources for investment in thedevelopment of infrastructures, especially those outside the state’s budget;

prioritizing water supply and drainage projects, environmental sanitation (solidwaste, waste water, etc.) projects…

1.2.2.3 Formulating policies to support FDI attraction in sectors and fields

Firstly, completing the land policy Localities, where were planned with manyfavorable locations, will be the base to attract FDI Besides, the procedures related

to land allocation and construction permits in the locality need to be quick,convenient and not affect the progress of construction and production-business offoreign investors Compensation and land clearance policies must be consolidatedand uniform with the actual situation of land use to ensure the benefits of theinvolved parties

Secondly, improving the policies of technical structure The technicalinfrastructure is the key to investors' choice of investment A locality with goodinfrastructure will attract a lot of investment projects, since all the activities fromthe implementation to the operation of the project must be based on locallyavailable technical infrastructure Good technical infrastructure means that theinvestors will save a bit of money, and more quickly earn return on investment.Therefore, the local authorities should thoroughly develop the policy on supportingthe construction of technical infrastructure in order to increase the foreigninvestment in the local market

Thirdly, perfecting the labor policies Labor is one of the essential components

of an investment project so the training and development of highly qualified humanresources is really important, and this is not a problem that only investors shouldpay attention to Because the quality and price of labor are big concerns for all theinvestors and they greatly affect the capital attraction efficiency In general,investors tend to move to areas or localities that have cheap labor but ensure thedesired quality

Fourthly, completing the policies on support and management after investment:Localities should issue support policies in line with general regulations and notcontrary to the law to attract FDI In order to attract foreign investors, the local

authorities need to ensure a number of supportive policies, such as supportinginfrastructure construction, policies on land clearance, vocational training supportfor labor working in the FDI sector

Fifthly, completing the tax policies During the investment process, foreigninvestors must fulfill financial obligations to the recipient country through thepayment of taxes, fees and charges to the state, and these payments will reduce therevenue of investors Therefore, a favorable tax policy in accordance withinternational practices will create trust and credibility with foreign investors Ingeneral, investors tend to look for places with low taxes, fees and charges.Therefore, localities should introduce tax, fee and charge incentives in order toattract investment, such as corporate income tax incentives, fees and chargesincentives of land use,…)

1.2.2.4 Doing investment promotion

Investment promotion plays the most important role, especially when theinvestor is still in the process of exploring and investing Investment promotionactivities provide investors with information related to their investment intentions,giving them an overview of locality to consider Therefore, investment promotionhelps investors shorten the time to survey, enables them to quickly go to theinvestment decision Then, the next stage of investment promotion is to mobilizepotential investors by providing investors with timely and accurate information thatenables them to quickly calculate revenues and profits or risk of the investmentproject

In that sense, investment promotion has become an important activity in thecontent of attracting FDI Competition among the attracting FDI localities is alsocompetition in investment promotion

The investment promotion activities include:

- Researching, estimating the potential of markets, trends and investmentpartners

- Building up database for investment promotion activities

- Building a list of projects calling for investment.

- Developing publications and documents for investment promotion activities

- Propagating, promoting, introducing of environment, policies, potentials,opportunities of investment

- Training, capacity building on investment promotion

- Supporting organizations, businesses, investors in understanding laws,policies, investment procedures, potential of market, partners and investmentassociations, implement projects after being granted investment certificate

- Carrying out both domestic and international cooperation activities oninvestment promotion

1.2.3 Factors affecting the FDI attraction efficiency

1.2.3.1 Macro factors

- The stability of the socio-economic- political environment

Macroeconomic factors play an important role in attracting FDI When theeconomic-political environment in the region and in the country is stable, there is

no crisis or war and violence, then the investors will concentrate resources to investoutside the home countries and the recipient countries will attract more FDI capital.Conversely, when there are fluctuations, the inputs and outputs of the projects oftenchange, investors will have a lot of economic difficulties, then will directly affectthe efficiency of FDI

Thus, a stable and potential macroeconomic environment is a prerequisite of allinvestment intentions and behaviors, it helps investors to choose which country toinvest their capital This is especially important for the mobilization and use offoreign capital In order to attract FDI, the local economy must be a safe place forthe movement of capital and be a place where profitability is higher than elsewhere

- Outward-oriented development strategy.

With the current trend of globalization, co-development is the inevitable trend

of countries The international relations of a country is not only a bridge tomobilize capital of the country but also an opportunity to find investment partners

One of the country's outward-oriented development strategies is to implement anexport-oriented strategy, includes: expanding the export market, enhancing thecompetitiveness with other localities and other countries, creating conditions forimproving the trade balance, gaining the trust of investors.

- The legal system is synchronous and complete, the state management apparatus is effective.

Legal system is an indispensable part of FDI A consistent, complete andefficient legal system is one of the factors that create a favorable businessenvironment, orient and support for foreign investors Investors are interested incompetitive environment issues, private property rights guaranteed by law,regulations on profit sharing, terms of capital, If legal regulations ensuring thesafety of capital and profits of investors are not nationalized when investmentactivities are not detrimental to the national security, as well as ensuring highprofits and the return of profits to the home country, the FDI attraction efficiencywill be higher Therefore, the legal system must show the basic content of theprinciple: Respect for independence, sovereignty, equality, mutual benefit and inaccordance with international practices At the same time, legal system should beimproved to gain the trust of foreign investors

1.2.3.2 Factors from locality

- Comparative advantages of locality

A locality that wants to develop in general and attract investment in particularneeds a lot of factors and conditions, especially, the economic and naturalconditions play important roles such as geographic location, resources, humanresources

Geographic advantage significantly saves transportation costs, is easy to widelyopen the surrounding markets, as well as effectively exploit human resources andpromote centralized enterprises Therefore, the geographical location of eachlocality has a certain role for investors

+ Natural resources: The abundance of cheap materials is also a positive factor

in attracting foreign investment Foreign investors flocked to the country andlocalities had abundant resources in oil, gas, rubber and timber to exploit naturalresources The reality is that localities with abundant natural resources will makeproduction costs cheaper and especially create favorable conditions for the localeconomy to develop in a multi-sectoral manner

+ Human resources: When deciding to invest in a new manufacturing facility in

a developing country, foreign investors also aim to exploit abundant humanresources, cheap and relatively excess labor in this country However, workingattitude of the employees are also important factors in considering and choosing thelocation for investment In recent years, foreign investors are no longer focused onthe issue but rather on the skill level of the workforce High-tech workforce is aprerequisite for a poor country to overcome natural resource constraints andbecome attractive to foreign investors The lack of skilled technical manpower,senior management, talented leaders, as well as the backwardness in the level ofscience and technology in the country will be difficult to meet the requirements ofthe foreign investors in the implementation of their projects, slowing down andnarrowing the inflow of foreign investment into the country

+ Local business system: A established local business system that is suited to transfer technology and is an equal partner with foreign investors is anecessary condition for the recipient country to attract more and more effectivelythe FDI capital The system of such enterprises must include both manufacturingand service enterprises in all sectors, fields, and proficient in international businessoperations, capable of gaining market share in the domestic market andincreasingly international competitiveness

well Viewpoint and awareness of local authorities

In each locality, the style and attitude also greatly affect the foreign investors.And that factor can be seen from the local leadership

A locality with active and positive leadership will be reflected in theimplementation of flexible policies and in the attitude of local government toenterprises The localities need to be active on behalf of the business sector to solveproblems that are unclear about the law Failure to grasp the law often causesobstacles to the operation of the business The openness of state agencies in thelocality is an important factor contributing to the sympathy of investors with thegovernment The strong commitment to support business development is animportant motivational force that encourages the cooperate spirit of investors.These support commitments need to be made by the specific actions of localleaders.

It can be observed that besides the natural advantages that a locality hasinherited, there are other factors that make up the competitiveness This is thesubjective effort of local leaders and local authorities This makes some localitiesnot rich in natural conditions can still strongly develop in economy Enterpriseswould like to invest in localities with favorable conditions, low business runningcost, simple procedures to achieve a high profits

- Infrastructure Factors

The technical infrastructure is not only the basis for attracting FDI but also thefactor speeding up the FDI activities, which has a decisive influence on theefficiency of production and business This is the top concern of investors beforemaking a decision A locality with systems of communication, traffic, energy, watersupply and drainage, financial services, will facilitate the development of FDIprojects The impact of each factor reflects the development level of each country

in general and each locality in particular During the implementation of the project,

if the locality has a good infrastructure system, the investors will only focus onproduction and business, shorten the project implementation time as well as costsfor transportation, information… then the investment efficiency will be increased.+ Technical infrastructure: The quality of technical infrastructure and the level

of industrialization have a great influence on the flow of foreign investment into

one locality A complete system of technical infrastructure (including road, rail, air,electricity, water, post & telecom, ) is desired by all foreign investors Thetechnical infrastructure refers not only to roads, bridges, warehouses, yards butalso to supporting services such as banking system, audit firms, consultants Lacking of necessary support from these activities, the investment environment willalso be seriously affected.

+ Social infrastructure: Beside technical infrastructure, the investment attraction

is also influenced by social infrastructure Social infrastructure includes health andsocial care systems, education and training, entertaining and other services Inaddition, the values of social morality, customs, religion, culture also constitutethe social infrastructure of a country or a locality

1.2.3.3 Factors from the foreign investors

- World economic situation

FDI is a form of international capital movement so it is very sensitive to theworld economic fluctuations A stable, growing world economy will be themotivation and prospect for investors when they move their capital to othercountries for profit Conversely, when the world economy is in crisis or recessionand affected by any factors, that will make investors have difficulty with their ownbusiness, they will be really prudent and careful in using their capital, thus, it will

be very difficult for countries to receive capital from foreign investors In Vietnam,the decline of FDI inflows through two regional and world economic crises in 1997-1998 and 2008 was clearly visible

- Trend of FDI flows in the world

The trend of FDI capital flows is an important factor for countries and localities

to develop policies to attract and receive these flows It is easy for a country orlocality located in the FDI flowing area to receive this flow and vice versa It can

be said that Southeast Asia has now become an attractive area for foreign investors

or capital inflows Therefore, Vietnam in general and localities in particular should

promote their comparative advantages and improve the investment environment inorder to attract efficiently this capital.

- Investment strategy of foreign investor

Beside the trend of FDI flows, the strategy of foreign investors is also animportant factor in attracting FDI from countries and localities Currently in theworld, FDI inflows are mainly from large investors, such as MNCs, TNCs, andsome developed countries such as the US, Japan Therefore, to attract capital fromthese investors, the recipient countries as well as localities need to know what theirstrategy is

With large investors with strong financial potential, prestige and experience ininternational business, they tend to invest in high technology, to use the skilledlabors and to invest into areas with high business prospects Developing countriesalso integrate into international economic integration, step by step changethemselves to fit the world and catch up with developed countries These countriesactively change trade, financial, monetary policies to be able to receiveinvestment capital

1.3 Attracting FDI experiences & Lessons for Hanoi

1.3.1 Attracting FDI experiences of some locality

1.3.1.1 Attracting FDI experiences of Bac Ninh city

FDI capital in Bac Ninh has increased continuously over the years and peaked

in 2008 Bac Ninh city is now home to over 1.000 FDI projects from 33 countriesand territories, including many hi-tech and environmentally friendly projects withlarge value, invested in by Samsung, Canon and Foxconn FDI has played animportant role in the socio-economic development of Bac Ninh city However, FDIactivities in Bac Ninh also reveal some limitations that need to be addressed toimprove the quality of this capital source Accordingly, Bac Ninh has adjusted thepolicy to attract FDI as follows:

Firstly, priority should be given to attracting FDI in the direction of "using hightechnologies, modern technologies, friendly with environment, effectively using

natural resources, minerals and land" Promote the development of supportingindustries; Strengthen the development of infrastructure, includes: traffic,electricity, water, waste treatment; Focusing on high value services such as:finance, banking, insurance, information technology, telecommunications, softwareand solutions, R&D,

However, the investment activities in Bac Ninh also showed signs of reductionand the comparative advantage limit In order to improve the investmentenvironment and increase the FDI attraction efficiency, Bac Ninh determined thatthe development of supporting industries is a sustainable way to move faster on theindustrialization-modernization road

As a result, in about 30 economic-technical sectors that need supportingindustries of Vietnam, Bac Ninh has more than 15 sectors But, most of them have

to import materials and accessories in foreign countries for production, such astextile, electronics and telecommunications sectors Furthermore, Bac Ninh'sproducts are generally poor in type, the price is much higher than the same productsare imported due to the high cost of production Along with that, human resourcesfor supporting industries have not met the quantity of quality

Secondly, implement priority and incentive policies to attract foreign investmentinto key sectors of Bac Ninh Priority and incentive policies include: supporting forland clearance; supporting investors to provide and train workers; for large-scaleprojects with investment capital of 150 billion VND or more, using hightechnology, beside the incentives provided by the government, Bac Ninh authoritywill set up a special incentive support to foreign investors, if this support wasapproved by prime minister

Third, in order to diversify forms of investment to mobilize and increase theFDI investment in infrastructure development (traffic, electricity, water), the citycontinues to encourage investment in the form of BT, BOT and at the same timedirect the research and development of PPP in accordance with Decision No.71/2010 dated 9/11/2010 of the Prime Minister

Fourthly, to improve the quality of the examination, appraisal the issuance andadjustment of investment certificates The issuance of an investment certificatemust meet the following requirements: the suitability of the investment field for thelocal planning system, regional planning, sector development planning ; thetechnical standards of the project must be equal or higher than that of theVietnamese technical standards The technology used in the project must beadvanced and environmentally friendly.

Fifthly, strengthen the state management to the investment activities afterlicensing, intensifying the examination and supervision in accordance with the law

on investment; reviewing, classifying and handling projects which are delayed ornot implemented

Sixth, changing and improving the investment promotions efficiency, focusing

on the investment promotion activities on the spot in the direction of thrift andefficiency Strengthening support, resolving difficulties, creating favorableconditions for the implementation of investment projects, which have been issuedcertificates of investment

Seventh, continuing to reform administrative procedures, simplifying theinvestment and construction procedures, accelerating the improvement of thebusiness investment environment, improve the provincial competitiveness index ofBac Ninh

1.3.1.2 Attracting FDI experiences of Quang Ninh province

Quang Ninh has 11 industrial zones approved by the government, including 4focused industrial zones and industrial clusters In 2016, total investment capital inindustrial zones and economic zones in Quang Ninh reached over 22 trillion VND,increase 49,62% in the comparison to the plan, of which FDI increased 1,55 timesthe plan and more than 6 times in the comparison to 2015

Beside Cai Lan Industrial Park, that almost fulfilling its target of 98,6%, otherindustrial zones are building and completing infrastructure which is an advantage toattract FDI to develop clean industries with high technology

Hai Ha Industrial Seaport is located in the coastal area of Hai Ha district, in thegulf of tonkin belt and two corridors to Guangxi, Yunnan (China) This area is veryimportant and very important in the trade between Vietnam and China This is akey project in the development orientation of Quang Ninh, in the planning wasapproved by the prime minister policy The project location is convenient andadjacent to the economic zones such as Mong Cai, Bac Phong Sinh, Hoanh Mo,Mong Cai border gates and some localities in South China, which have theadvantage of deep-water ports, and can receive ships of 150.000 DTW.

In spite of having just 150 hectares with total investment capital of USD 25million, the Quan Trieu Industrial Park Project is determined to be the driving forcefor the socio-economic development of Dong Trieu district and its surroundingareas This is a key project in the development orientation of Quang Ninh, it isincluded in the master plan approved by the Prime Minister policy, is located in thewestern area of this locality, adjacent to Hai Duong and Hai Phong And there are

no similar scale projects within a radius of 30km

The Kim Sen industrial cluster in Dong Trieu district has been filled Theproject has a comparatively large advantage for investors thanks to theimplementation of some supporting industries projects that will motivate thedevelopment of the area, basically form and develop the urban network andpopulation distribution, as well as infrastructure services to create sustainabledevelopment of the industrial zone

With specific incentive policies for each project such as handover clean land,advance budget of locality to clear the land ; investing in infrastructure works forprojects calling for investment; listening to and respecting investors' interests,Quang Ninh will be the first modern industrial locality in Vietnam in the shortesttime

1.3.1.3 Attracting FDI experiences of Hai Phong city

Hai Phong city has become one of the leading localities with strongbreakthrough in attracting FDI of Vietnam Statistics released by Hai Phong’s

Department of Planning and Investment show that so far this year Hai Phong hasattracted more than USD 1 billion from 47 newly registered and 35 revisedprojects.

Last year, Hai Phong ranked second nationwide in luring FDI, which reachednearly USD 33 billion Major investment projects include the USD 1.5 billionproject by LG Display and USD 550 million project of LG Innotek Investors saythat they selected Hai Phong for its potential

In recent years, a great resource has been concentrated in Hai Phong to createbreakthrough development of socio-economic infrastructure for the city, especiallythe traffic infrastructure, for the aim to assert that Hai Phong is an important traffichub and gateway to the sea of the northern localities

A number of strategic projects and constructions of strategic have been investedsuch as Hai Phong international gateway port, Cat Bi international airport, Tan Vu -Lach Huyen road bridge, Hanoi – Hai Phong and Ha Long – Hai Phong Highway,Bach Dang bridge, Highway 10 Expansion, Turning point Nguyen Binh Khiem –Dinh Vu - Chua Ve (belongs to Project No 356, section 2A from Nguyen BinhKhiem to Dinh Vu dam)

At the regular meeting of the People's Committee of Hai Phong city, Chairman

of Hai Phong People's Committee Nguyen Van Tung affirmed: the efficiencybrought from the foreign investment projects for the city is Maintaining the growthrate of key industries, especially large projects belonging to enterprises withforeign direct investment

Specifically, LG Electronics Vietnam Co., Ltd contributes mainly to the growth

of the city's industry, with television products, mobile phones, LCD screens used incars In addition, Garment Company Limited Regina Miracle has over 15,000employees, accounting for 60% of the total garment workers in the city Inlogistics, the city has two projects of the head Singapore to invest in Dinh VuIndustrial Zone with registered capital of USD 25 million and VSIP Hai PhongIndustrial Park and Services with registered capital of USD 7.91 million…

However, Hai Phong didn’t complete its goal of attracting USD 2,4 billion ofFDI in 2017 The shortage of land funds, the limited scale of IPs and slow landclearance were blamed for the failure Le Trung Kien, Director of the municipalDepartment of Planning and Investment, said “Improving the local business andinvestment environment has been chosen as 2018’s theme We will continue to step

up reforming administrative procedures and procedures related to the investmentenvironment, land clearance, land access, and maximizing support for businesses.Hai Phong has promulgated a series of policies to meet investors’ demands for animproved business and investment environment and personnel quality, quickercompletion of administrative procedures, and fewer unnecessary regulationshindering investors.”

1.3.2 Attracting FDI lessons for Hanoi

It can be said that the three provinces of Bac Ninh, Hai Phong, Quang Ninh arethree provinces and cities most successful in attracting FDI This confirms theimportance of FDI projects in creating the premise and making conditions for theindustrialization process in each locality Attracting FDI experiences of theseprovinces are also the valuable lessons for Hanoi, which are contributing to thelocally economic development

Specifically, these lessons are:

Firstly, the city needs to consistently identify the importance of FDI capital in

the development of the local economy Strategies, plannings and lists of projectscalling for investment from FDI must be linked to the overall socio-economicdevelopment plan of the city, bringing into play the potential of the city, and at thesame time create the best conditions for investors Besides, investing to createfavorable land fund for investors such as completing the planning and buildinginfrastructure of high-tech zones and new urban areas

Secondly, the city needs to develop a clear strategy for attracting FDI, then

setting clear and specific orientations as well as targets for each area, sector and

partner… to maximize the advantages of Hanoi and the superiority in thecomparison to other localities.

Thirdly, investment promotion is extremely important in attracting FDI Beside

the form of passive investment, Ha Noi needs to moves gradually to attract morequality investment projects than the quantity, actively improve the quality ofinvestment promotion documents, build a website introducing the list of projectscalling for investment, coordinate with international organizations to organize theattracting FDI conferences in potential foreign countries Specific activities ofHanoi in the policy of investment promotion such as:

+ Local marketing implementation: Hanoi should actively introduce investment

information through various forms and ways to enhance the image of Hanoi in theeyes of investors around the world Firstly, providing information, introducingpolicies, incentives, and preeminent advantages of Hanoi as the natural conditions,technical infrastructure, to investors, supporting them to study, compare andmake investment decisions Secondly, building the copious promotion contentthrough websites, international magazines, constructions calling for investmentfrom world organizations Thirdly, the city leaders also must be always ready totake the chances to introduce Hanoi to foreign investors, as well as to collectinformation on foreign companies as locality’s documents and facilities Fourthly,improving the quality of service through the hotline service of the Department ofPlanning and Investment of Hanoi, providing information, consulting andanswering questions of investors to create trust and sympathy with investorslooking for investment opportunities in Hanoi

+ Investment incentive policies: List the sectors and the fields of specific

investment encouragement, formulate the preferential policies for FDI capital

+ Reform of the investment licensing process: The time limit for granting

investment licenses shall be shortened for each type, such as project registered forlicensing or project evaluated for the license Shorten the procedures of promotion,approval and licensing in the spirit of simple, quick for investors

Fourthly, constantly improving the investment environment in the locality such

as reform of administrative procedures, infrastructure construction, creating thebest conditions for investors, especially, it is necessary to formulate policies tosupport and encourage investors effectively Strengthening services to attract FDI

In addition, support services for FDI such as: consulting, supporting administrativeprocedures; provide market information, support businesses to access financialservices, support licensing, transfer are very important to foreign investors whenthey want to go to the local Well done the support will help investors quicklyimplement the investment process Besides, it brings a beautiful image of the city tothe eyes of foreign investors

Fifthly, apart from the above policies, the city should also have policies to

attract talents and to train human resources on the spot to meet the needs ofinvestors, such as: taking care of the laborers' life to create a sustainable humanresource, strengthening the relationship between job centers, enterprises anduniversities, colleges and vocational schools in supplying skilled labor andorienting vocational training to suit the development needs of enterprises and thedevelopment orientation of the country

The above is a very precious experience of Bac Ninh city, Hai Phong city andQuang Ninh province in attracting FDI Hanoi has relatively unique natural andsocial conditions, so it is necessary to flexibly apply these experiences in reality tosuit the local context