The Realities of FDI in Hanoi - 20 years in Retrospect (1996-2006)

Abstract

During the 20 years of realizing Doi moi (1986-2006), the Hanoi Capital City has been one of the leading provinces and cities of the country in the numbers of projects and the total amount of FDI. In the first 3 years (1986-89), FDI was mainly focused on the trading and service fields. Investment in industrial and agricultural fields made only 20% of the total FDI. From 1990, FDI was massively poured into Hanoi. The year of 1996 is considered as the peak of FDI in Hanoi after 10 years of the opened-door period. However, from 1997-2003 the FDI into Hanoi tended to decrease. From 2004, the FDI has increased again, and reached 306.6 million USD. In 2006, Hanoi attracted 194 FDI projects with the registered capital of 1.12 billion USD. The building and developing the industrial zones is defined as economic goal of Hanoi and other provinces and cities in the whole country. However, the FDI is not yet rightly delivered among most important economic fields of Hanoi.

The successeds in the FDI that can be counted on are that the FDI projects have actively affected the realizing the socio-economic aims of Hanoi. They contributed to strengthening production capacity of the economy, speeding up the transformation of the economic structure towards industrializing and modernizing; creating many new jobs and industrial productions for Hanoi; improving technological, scientific and management quality of the production. The FDI also supplemented to the social capital, to enlarge the exportable market, created new jobs and improved the income of workers. However, FDI in Hanoi also reflected the limits and challenges of the investment environment, and that needs to find some solutions in order to improve the environment for FDI in Hanoi