Chu Lai Open Economic Zone: A New Frontier for Central Vietnam’s Economic Growth
The Chu Lai Open Economic Zone (OEZ), now seamlessly integrated into Da Nang City, is actively transforming the economic landscape of Central Vietnam. By bolstering logistics infrastructure and attracting high-tech investments, this region is poised to become a pivotal driver of growth, setting the stage for a new era of commercial activity.
A Transformational Shift in Governance
The recent merger of Quang Nam province into Da Nang City is not just a political maneuver; it’s a significant shift that places the Chu Lai OEZ directly under Da Nang’s management. This evolution is expected to promote streamlined governance and enhance coordination in policy implementation. For over two decades, the Chu Lai OEZ has been at the heart of regional economic development, emerging as a center for industries like logistics and high-value manufacturing. With Da Nang’s support, the OEZ is set to enjoy improved connectivity and infrastructure, positioning it as a central hub for trade and innovation.
Comprehensive Overview of Chu Lai OEZ
Established more than 20 years ago, Chu Lai was Vietnam’s inaugural coastal economic zone. Over the years, it has attracted a rich tapestry of industries, evolving into a dynamic hub for manufacturing, trade, and services. By late 2023, the zone had recorded 197 investment projects totaling an impressive VND 74 trillion (around US$3 billion), with foreign direct investments contributing significantly to this figure.
As of mid-2024, those numbers have swelled to 218 projects, with capital surpassing VND 87 trillion (US$3.5 billion). Despite this impressive growth, the zone faces challenges including land clearance issues and escalating production costs, prompting Da Nang’s city officials and relevant agencies to find efficient solutions.
Key Sectors Fueling Economic Growth
Logistics and Freight
Logistics is a cornerstone of Chu Lai’s economic framework. The Chu Lai Port stands as a critical node in Central Vietnam’s logistics network. Boasting robust connections to National Highway 1 and other major transportation arteries, the port facilitates a high volume of goods traveling to and from various locales.
In 2024, the port will launch services connecting directly to major ports in India and the US—demonstrating its commitment to enhancing global trade access. With increasing demand for exports to the US, partnerships with international shipping lines have expanded the range of connection points.
Industrial Production
Beyond logistics, Chu Lai has a growing industrial sector specializing in automotive manufacturing, mechanical engineering, and high-tech production. In 2022 alone, budget revenues generated from the OEZ reached around VND 77.7 trillion (approximately US$3.16 billion), accounting for over 60% of Quang Nam province’s overall revenue.
By mid-2024, Chu Lai OEZ hosts 14 industrial parks, covering over 3,400 hectares. Investment and development in these parks aim to further boost the zone’s industrial output and create thousands of jobs.
Strategic Development Orientation: 2021–2030 and Beyond
Center of Da Nang’s Growth Strategy
As part of Da Nang’s larger economic strategy, Chu Lai OEZ has been earmarked as a focal point for new investments and development projects. A series of priority clusters aim to enhance economic diversity in the region, including:
- Expanding coastal and riverside tourism to support the local economy
- Boosting automotive and multipurpose manufacturing, leveraging existing strengths
- Developing high-tech eco-industrial parks to encourage sustainable investments
- Enhancing industrial services, especially through the expansion of Chu Lai International Airport
- Improving logistics and port infrastructure to strengthen regional connectivity
- Promoting sustainable agriculture and food processing initiatives
These targeted efforts are designed not just to increase investment but also to create a sustainable, mixed-use economic environment that benefits various sectors of the economy.
Infrastructure Expansion and Integration
Infrastructure enhancements are central to the OEZ’s development. The ongoing expansion of Chu Lai International Airport is a critical element, aimed at boosting trade and attracting international investors. Current projects include maritime improvements to accommodate larger vessels, enhancing the zone’s logistics capabilities.
Additionally, new road networks are being established to better connect Chu Lai with key regions, including Da Nang and major expressways. These upgrades align with broader initiatives, such as the development of the Lien Chieu deep-sea port and a newly-established free trade zone.
Investment Attraction Strategy
Chu Lai OEZ has set its sights on attracting high-tech and clean industries. There’s a focused effort on sectors such as advanced manufacturing and renewable energy. The zone is actively courting foreign investments, particularly from markets like South Korea, Japan, and the United States, fostering partnerships that bolster technology transfer and local supply chains.
Efforts to improve the business climate are already underway, targeting e-government enhancements and reforming administrative processes to create a more transparent and investor-friendly environment.
Opportunities and Outlook for Investors
Regulatory and Policy Advantages
The Management Board of Chu Lai OEZ is advocating for an upgrade in its legal status to a special administrative economic unit. This change would grant the zone enhanced policymaking autonomy and allow it to establish more flexible regulations, thereby bolstering its appeal to investors.
Focus on High-tech Industries
Building on its automotive manufacturing foundation, the zone is investigating high-growth sectors like semiconductor manufacturing, aligning with global trends and local initiatives aimed at fostering technological innovation.
Strategic Partnerships
Chu Lai is actively pursuing cooperative agreements with international firms, indicating robust investor sentiment. Recent memoranda of understanding (MOUs) with various stakeholders signal strong confidence and pave the way for substantial projects across various sectors.
With its strategic position and focus on modernization, the Chu Lai Open Economic Zone is set to become a compelling investment destination. As it evolves, the interplay between governance, infrastructure, and industrial strategy will be pivotal in shaping its role in Vietnam’s broader economic narrative.