PHOTO: ETHNIC VOYAGES CAO BANG

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Vietnam’s Lang Son province has emerged as a promising location for investors looking to lớn diversify or complement their china manufacturing. Manufacturing hubs in Vietnam and trung quốc have a different phối of strengths and often play a complementary role in the production process. Vietnam Briefing profiles Lang Son and China’s Guangxi & factors that need to be considered when planning a supply chain shift.

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The COVID-19 pandemic & the US-China trade war, have disrupted global supply chains forcing businesses lớn diversify production or seek alternate suppliers while hedging raw inputs. This has been further accentuated as the world’s factory đài loan trung quốc faces lockdowns & blockades due khổng lồ a zero covid approach.

While several countries have benefitted from such diversification, Vietnam, which borders đài loan trung quốc offers immense benefits as the country is well-known for political stability, ideal location, and business-friendly policies.

In this context, Vietnam’s northern Lang Son province is on the rise khổng lồ become an attractive spot for investors wishing khổng lồ supplement or diversify their business operations from China.

To illustrate this we examine Lang Son and China’s Guangxi which both show significant growth potential, although they have distinct characteristics that should be taken into consideration.

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An introduction lớn Lang Son province

Located in the northeastern mountainous regions of Vietnam, Lang Son province covers an area of 8,310 square kilometers and borders one of Vietnam’s economic centers, quang Ninh province to lớn the west và Guangxi khổng lồ the Northeast. Lang Son is known as a cross-border trade hub in the North và a gateway that connects Vietnam with China’s Guangxi và the wider ASEAN region.

As per the People’s Committee of Lang Son due khổng lồ its railway network & road system connecting economic hubs in Vietnam, the province has emerged as a cargo transshipment gateway khổng lồ the Chinese market & ASEAN countries.

It has a population of approximately 790,000 & its demographic is dynamic with different ethnic groups inhabiting the province.

Lang Son’s economy has shown noticeable signs of growth, from 8 lớn 9 percent for the 2011-2018 period và a further 6 to 7 percent projected for 2022 onwards. Three major industries making up the province’s economy include:

Agro-forestryIndustry-constructionServices
20.3%19.7%49.7%

It is worth noting that Lang Son scored well on the Provincial Competitiveness Index (PCI), ranking 36, up 13 places compared to 2020 with a competitive overall point of 63.92. PCI scores of Lang Son have improved extensively year after year (lower scores indicate improvement):

20172018201920202021
5350504936

Lang Son sub-index scores are no less impressive, with the majority of the criteria scoring above 6, most notably the four criteria of time costs, informal changes, proactivity, & law và order:

Time costs7.82
Informal changes7.55
Proactivity7.60
Law & Order7.39

Lang Son province’s performance can not be underrated as according to the official report, the 2021 (PAR INDEX) of Lang Son reached 87.11 percent, standing at the 23rd position out of 63 provinces, up 13 places compared lớn 2020, proving the province’s transparency in legal aspects.

The province has risen lớn position itself as the next hub for investments in Vietnam. Lang Son currently enjoys more than 40 FDI projects with total investment capital adding up khổng lồ US$240 million. Lang Son’s authority recently approved a decision promoting 37 investment projects, calling for another US$1.9 billion worth of investment for the 2019-2025 period.


In 2019, Lang Son held an investment promotion conference, namely ‘Lang Son – a successful destination for investors’ on ensuring the most transparent and favorable business environment for investors. As per the Department of Planning & Investment, Lang Son offers tax reductions và exemptions, và business-friendly land rent, in compliance with the government’s laws.

In terms of infrastructure, Lang Son’s upcoming Dong Dang (Lang Son province) – Tra Linh (Cao Bang province) expressway (115 km in length) as well as the improvement of the highway 4B linking to lớn Quang Ninh province can be a strong push for the province’s logistic industry & supply chain, in parallel with the cargo transshipment site project, attracting new investment plans.

Remarkably, Lang Son province is the chosen destination for the construction of three wind nguồn plants by the German-based BayWa r.e. In three districts: Van Quan, Cao Loc, & Loc Binh.

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Lang Son is also known for its extensive economic zones. The Dong Dang-Lang Son border-gate economic zone covers an area of 394 km2 and two other industrial parks cover another 761,7 hectares. It is projected that 10 more industrial parks will be established by 2030.

With a business-friendly environment và the geographical advantage of proximity khổng lồ China, Lang Son bodes well lớn become an appealing destination for businesses looking for a location.

An introduction lớn Guangxi

Located in the Southern part of China, Guangxi is bordered by Guangdong province to lớn the east, Yunnan province to lớn the west, và Vietnam khổng lồ the southwest.

Guangxi is home to the famous Huashan Cliff Paintings, a UNESCO World Heritage Site.

While Guangxi is among China’s less-developed provinces it shows great growth potential as it has partnered with two regional initiatives including the Greater Mekong Subregion Economic Cooperation Program (GMS) và the PRC-Association of Southeast Asian Nations miễn phí Trade Area.

In terms of infrastructure, Guangxi enjoys both deep-water seaports & land ports at its international borders. The region also has an extensive expressway system that link Guangxi’s seaport with Yunnan, Guizhou, and its land ports at the border with Vietnam.

The region’s pilot không tính tiền trade zone (FTZ) has been a magnet for foreign investments. Up to 194 foreign-funded enterprises were established, 40 of which were from the pilot FTZ in 2019. The contractual foreign investment was worth US$ 2.68 billion in 2019, an increase of 56.4 percent year on year. Guangxi pilot FTZ is projected to become a world-class economic playground that promotes trung quốc and ASEAN partnership in trade.

Guangxi’s economy is dependent on three major zones, each focusing on specific industries:

Nanning Area: Modern service sectors such as financing, intelligent logistic, culture, & media;Qinzhou Port Area: Industries such as port logistics, international trade, eco-friendly chemicals, components for new energy cars; andChongzuo Area: Cross-border trade/logistics/financing/tourism/labour service.

According lớn government statistics, in 2021, Guangxi’s profits of industrial enterprises reached 106.5 billion yuan, up 41.2 percent year on year.

Lang Son & Guangxi – Deciding your China+1 destination

It is noteworthy that in February, leaders from Vietnam’s northern provinces of Cao Bang, Lang Son, quang Ninh, and Ha Giang signed a memorandum of understanding (MoU) with Guangxi authorities on future partnerships for the 2022-2026 period. This will generate a favorable environment for businesses operating in Guangxi looking lớn supplement their business operations in Vietnam. As mentioned earlier, with trung quốc and Vietnam in different stages of development, the business relationship is complementary rather than competitive.

Lang Son province is also the first point of Vietnam in the Nanning-Lang Son-Hanoi– hai Phong and the Nanning-Lang Son-Hanoi-Ho đưa ra Minh City-Moc Bai economic corridors, which facilitates business operations of foreign investors, making the province an attractive option for a China+1 location.

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Thanks to lớn abundant and competitive labor rates as well as a stable political environment, Vietnam’s Lang Son province is a promising location lớn be considered for businesses looking khổng lồ diversify their operations from manufacturing hubs in China.