Can Tho seeks to improve FDI quality, create new growth momentum
Can Tho is now facing a “window of opportunity” to upgrade the quality of FDI, but needs to shift from a mindset of attracting capital to one focused on selecting, absorbing and spreading investment value.
Following the expansion of its development space, together with the formation and completion of its network of transport infrastructure, industrial parks and logistics centres, Can Tho is presented with an opportunity to redefine its role in attracting foreign direct investment (FDI) to the Mekong Delta.
In the new development phase, the goal is not only to attract more capital, but more importantly to retain a greater share of the value generated by each investment project.
According to Associate Professor Dr Phan Anh Tu, Vice Rector of the School of Economics at Can Tho University, FDI is a relatively stable “pillar” of the city's economy but has yet to become a new growth driver. Therefore, rather than simply increasing the number of projects and registered capital, Can Tho should focus on selecting suitable investment flows, shortening the time needed to put projects into operation, improving its capacity to absorb investment and strengthening linkages between FDI enterprises and the domestic sector.
In the first eight months, the delta city attracted three new FDI projects with a total registered capital of 25.22 million USD, bringing its total number of such projects to 125 and their capital to over 7.15 billion USD.
During the period, the Can Tho Export Processing & Industrial Zone Authority received and worked with around 30 investors. Between January and July, the city welcomed 525 foreign delegations comprising 3,535 visitors. However, the number of new FDI projects remained modest.
According to Tu, Can Tho should prepare “investment-ready” dossiers for each priority industrial park, clearly setting out available land, planning, infrastructure, land rental prices, electricity and water supply capacity, wastewater treatment facilities and the time required to complete inter-agency procedures. This would shift investment promotion from simply “inviting” investors to proactively developing a portfolio of projects.
Expanding infrastructure, strengthening linkages to create value
Following the reorganisation of administrative units, the city's industrial park network now stretches from Tra Noc, Thot Not, Vinh Thanh, Tan Phu Thanh, Dong Phu and Song Hau to An Nghiep, Tran De, Dai Ngai, Long Thanh and Tan Binh. The city is also coordinating surveys and proposing the scale and boundaries of the Tran De economic zone, creating additional space for industry, logistics and the marine economy.
Inter-regional transport infrastructure is expected to further change Can Tho's locational advantages. The 175.2km Ho Chi Minh City-Can Tho railway, passing through five provinces and cities, is expected to help restructure the economic landscape and reduce logistics costs. Logistics costs in the Mekong Delta currently account for around 18-22% of the value of goods, while the project is targeted to begin construction in 2027.
However, infrastructure only creates opportunities; the ability to turn them into investment flows and economic value depends on the locality's preparedness.
According to Tu, human resources and logistics are not yet the biggest obstacles to FDI but could become decisive factors for future investment flows. Therefore, workforce training needs to be carried out in advance and closely linked to specific business needs.
Can Tho capitalises on its strengths in logistics, finance, science and technology, high-quality human resources and business services, while other localities can undertake appropriate stages involving raw materials, processing, energy and the marine economy, he noted.
This orientation opens room for a new generation of FDI in deep processing of agricultural and aquatic products, food technology, biotechnology, multimodal logistics, the circular economy, clean energy, automation, digital transformation and knowledge-based services.
According to Dr Tran Huu Hiep, an economic expert, Can Tho is now facing a “window of opportunity” to upgrade the quality of FDI, but needs to shift from a mindset of attracting capital to one focused on selecting, absorbing and spreading investment value.
The effectiveness of FDI should be assessed in terms of the amount of added value retained locally, quality employment, the transfer of technology and management capacity, and the extent to which domestic businesses participate in value chains./.