Vietnam’s Key Economic Regions (KERs) in 2022
Vietnam’s vibrant economy is bolstered by its four Key Economic Regions (KERs): the Northern, Southern, Central, and Mekong Delta regions. Each of these areas plays a significant role in the nation’s economic landscape, contributing to a collective surge in trade and investment.
Overview of Economic Performance in 2022
In the wake of the pandemic, Vietnam experienced a remarkable economic rebound in 2022, with foreign direct investment (FDI) exceeding US$27 billion and imports and exports totaling over US$700 billion. This growth not only reflects a recovery but also a distinct concentration of financial activity across the four KERs, showcasing their individual strengths and offering opportunities for investors.
Northern Key Economic Region (Northern KER)
The Northern KER, comprising cities like Hanoi, Hai Phong, and Bac Ninh, serves as a critical economic engine for the north.
- Economic Contribution: Hanoi stands out, contributing a substantial 47.22% to the regional gross regional domestic product (GRDP), significantly higher than the contributions from Hai Phong and other provinces.
- Trade Performance: The region experienced a 7.84% increase in import and export turnover compared to 2021, with Bac Ninh reporting the highest trade turnover of US$83.4 billion, accounting for 33.89% of the region’s total.
Foreign Direct Investment in the Northern KER
In 2022, the Northern KER attracted over US$9.61 billion in FDI, with Bac Ninh and Quang Ninh emerging as significant contributors. Notably, the region’s aim for 2023 is to enhance its focus on high-tech and environmentally friendly projects, building on its strong foundation in electronics manufacturing, particularly for global giants like Apple and Samsung.
Trade Breakdown in the Northern KER
| Provinces | Import (US$ Billion) | Export (US$ Billion) | Total (US$ Billion) | Increase (%) | Contribution to KER (%) |
|---|---|---|---|---|---|
| Hanoi | 41.00 | 17.10 | 58.10 | 114.82 | 23.61 |
| Hai Phong | 21.40 | 24.90 | 46.30 | 104.99 | 18.81 |
| Bac Ninh | 38.40 | 45.00 | 83.40 | 100.36 | 33.89 |
| Others | Various | Various | Various | Various | Various |
| Total | 130.60 | 115.50 | 246.10 | 107.84 | 100 |
Major Investments in the Northern KER
- Stavian Quang Yen Petrochemical is set to invest US$1.5 billion in a polypropylene resin project in Bac Tien Phong Industrial Park.
- Goertek Vina plans to expand its electronic devices manufacturing factory in Bac Ninh from US$260 million to US$565 million.
- JD Future Explore V Limited is developing an e-commerce warehouse in Hai Phong, bringing in an estimated US$32 million.
Southern Key Economic Region (Southern KER)
The Southern KER includes major urban centers like Ho Chi Minh City and industrial provinces such as Binh Duong and Dong Nai.
- Economic Significance: Ho Chi Minh City alone contributes 15.5% to Vietnam’s GDP, accounting for 46% of the Southern KER’s GRDP. The region’s growth during 2022 varied from 7% to 9%, with Ho Chi Minh City leading.
- Trade Growth: The Southern KER recorded a 5.7% growth in import and export turnover, driven primarily by Ho Chi Minh’s impressive US$110.3 billion in trade.
Foreign Direct Investment in the Southern KER
Ho Chi Minh City remains the top destination for FDI in the Southern KER, contributing 34.92% of the region’s total investments. Other provinces like Ba Ria-Vung Tau and Dong Nai are also witnessing robust growth.
Trade Breakdown in the Southern KER
| Provinces | Import (US$ Billion) | Export (US$ Billion) | Total (US$ Billion) | Increase (%) | Contribution to KER (%) |
|---|---|---|---|---|---|
| Ho Chi Minh | 62.80 | 47.50 | 110.30 | 105.05 | 41.47 |
| Binh Duong | 24.80 | 34.30 | 59.10 | 101.55 | 22.22 |
| Others | Various | Various | Various | Various | Various |
| Total | 130.11 | 135.87 | 265.98 | 105.74 | 100 |
Major Investments in the Southern KER
- Lego is investing US$1 billion in a new factory in Binh Duong, which is expected to create 4,000 jobs.
- Coca-Cola Vietnam is establishing a factory in Long An with a US$136 million investment, aiming for a production capacity of 1 billion liters annually.
- Pandora Group plans to invest approximately US$100 million in a jewelry manufacturing facility in Binh Duong.
Central Key Economic Region (Central KER)
This region comprises Thua Thien Hue, Da Nang, and surrounding provinces, noted for its strategic seaport and tourism potential.
- Growth Indicators: The Central KER recorded a substantial 17.1% increase in import and export turnover in 2022, with Da Nang leading the growth charge at over 14%.
- Investment Climate: The region received US$531 million in FDI, with Thua Thien Hue securing the largest share of registered investment capital.
Trade Breakdown in the Central KER
| Provinces | Import (US$ Billion) | Export (US$ Billion) | Total (US$ Billion) | Increase (%) | Contribution to KER (%) |
|---|---|---|---|---|---|
| Da Nang | 1.50 | 2.10 | 3.60 | 116.505 | 17.31 |
| Quang Nam | 3.27 | 2.14 | 5.41 | 138.718 | 26.01 |
| Others | Various | Various | Various | Various | Various |
| Total | 10.96 | 9.84 | 20.80 | 117.183 | 100 |
Major Investments in the Central KER
- KURZ Group is launching a US$40 million high-tech factory project in Binh Dinh.
Mekong Delta Key Economic Region (Mekong Delta KER)
The Mekong Delta, encompassing provinces like Can Tho and An Giang, has a pivotal geo-economic position with significant contributions to agriculture and aquaculture.
- Economic Dynamics: Each province contributes relatively equally to the region’s GRDP, with growth rates ranging from 8% to 11%. Can Tho stands out, being the center for FDI, attracting US$185.96 million.
Trade Breakdown in the Mekong Delta KER
| Provinces | Import (US$ Billion) | Export (US$ Billion) | Total (US$ Billion) | Increase (%) | Contribution to KER (%) |
|---|---|---|---|---|---|
| Can Tho | 0.57 | 1.71 | 2.28 | 38.00 | 35.24 |
| An Giang | 0.67 | 1.00 | 1.67 | 129.46 | 25.81 |
| Others | Various | Various | Various | Various | Various |
| Total | 1.65 | 4.82 | 6.47 | 68.76 | 100 |
Major Investments in the Mekong Delta KER
- VSIP Can Tho project, involving US$160 million, aims at enhancing infrastructure within Vinh Thanh Industrial Park.
- Sphere Denmark is investing US$17 million in An Giang to produce outdoor sportswear.
Future Prospects for Vietnam’s KERs
The experiences of 2022 have underscored the significance of the KERs in Vietnam’s economic narrative. As the country continues to improve its business environment and reinforce infrastructure, the focus remains on attracting advanced, sustainable projects to secure long-term economic growth and stability.