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Ho Chi Minh City

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Source: General Statistics Ofce, 2010 data, most recent available as of March, 2012
FDI
Registered Capital
US$30,011.2
Gross Industry
Output
VND509,831.5 bn
H
o Chi Minh City (HCMC, known as Saigon until 1976)
is much younger than Hanoi, with many historians
dating the city at just over 300 years old. A prosperous
and densely-populated trade hub, the city is today considered the
commercial and economic center of Vietnam. HCMC is actually
a municipality (on the same governmental level as a province)
and, with a population of over 7 million, it is the most populous
province/municipality in Vietnam.
Te inhabitants of HCMC the "Saigonese" are generally seen
as industrious and tolerant. HCMC is in many ways a promised
land, attracting immigrants from across Vietnam to pursue
economic fortune. While the majority of people in HCMC are
ethnic Vietnamese, the city is also known for cultural diversity.
Economy and Investment Climate
Ho Chi Minh City accounts for over 20 percent of Vietnam's GDP
and 25 percent of the countrys industrial production. HCMC is
also the number one location for FDI infows into Vietnam.
HCMC plays host to a series of international exhibitions, most
at the Saigon Exhibition and Convention Centre in Phu My Hung
New Urban Area. In 2011, for example, the city hosted VietnamPlas
(for plastics and rubber, packaging and print, food technology
and printing and labeling sectors), Linkage (featuring industrial
automation, electricity engineering and energy industry products)
and VietnamWood.
Real estate prices in HCMC are widely described as "gloomy" in
2012, but development continues. Te developer of Ho Chi Minh
Citys tallest building - Bitexco Financial Tower - is due to break
ground on its US$400 million Ben Tanh Tower project in Ho Chi
Minh City in early 2012, with the tower to open its doors in 2015.
Manufacturing Zones
HCMC manufacturing zones took a hit in 2011 following the
withdrawal of a major solar panel manufacturing project. After
HO CHI MINH CITY
Municipality
Population
7,396.5 thousand
Ho Chi
Minh City
Southeast

Ho Chi Minh
City accounts for
over 20 percent of
Vietnams GDP and
25 percent of the
countrys industrial
production.

4 |
DEZAN SHIRA & ASSOCIATES
eight months of construction, in late 2011 the U.S.-based First
Solar Group put implementation of its US$1 billion solar panel
project in HCMCs outlying district of Cu Chi an investment
more than four times the sum of all other foreign direct investment
in HCMC EPZs and IZs in 2011 on hold until global market
demand requires additional capacity.
Ho Chi Minh City EPZ and IZ Authority (HEPZA) aims to
attract a modest US$500 million of investment capital in 2012,
with US$200 million in foreign direct investment, and discuss a
plan to set up a specialized IZ dedicated to supporting industries
development with priority rendered to Japanese investors.
Manufacturing zone rent prices in HCMC are high (66 times more
than that in the frst phase and double compared to that in IZs
based in southern Binh Duong province), so HEPZA has proposed
a stable land rental scheme for investors.
Major manufacturing zones with vacancies in the city include Tan
Phu Trung, Hiep Phuoc and Dong Nam IZs, and Tan Tuan EPZ,
each with their own industry focus. Hiep Phuoc IZ, for example,
prioritizes investment into precise engineering, information
technology, chemical and pharmaceutical, food processing and
production of building materials for interior decoration. Tan Phu
Trung IZ has set aside 200ha for investors in hi-tech, eco friendly
and supporting industries as of February 2012.
Following the nations general push in the direction of industrial
clusters, an automotive industry cluster is being developed in Cu
Chi district, with incentives to attract both foreign and domestic
investors, such as rent fxed at US$55 per square meter for the
park's 50-year life span and rent waived for the frst fve years for
small and medium-sized enterprises.
Infrastructure
Intracity transportation
Motorbikes remain the most common way to move around the city.
In addition, there are plans for a light rail rapid transit network,
with the frst complete line due in 2014.
A proposal to introduce two boat taxi routes in the city is currently
being considered by the government, with routes possibly beginning
operation in early 2013. Te fare for boat taxis would be higher
than buses because of the high initial cost of investment and, if two
routes operate at 50 percent capacity, they would transport about
5,000 passengers a day.
Roads
National Highway 1A runs north-south through the whole of
Vietnam, from Ca Mau (close to the Mekong Delta Region) to
Lang Son (close to the Chinese border), Ho Chi Minh City, Da
Nang and Hanoi. A 55 km stretch of highway between An Phu,
northeast of HCMC, and Dau Giay is due to be completed in 2012.

Sai gon Por t

has the highest
throughput and
container traffic
of any port in the
country.

DEZAN SHIRA & ASSOCIATES

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Railways
HCMC is a terminal for many train routes in the country. Te
Reunifcation Express runs from HCMC to Hanoi from Saigon
Railway Station in District 3, with stops at cities and provinces
along the line.
Air
HCMC is served by Tan Son Nhat International Airport, located
in Tan Binh District, the largest airport in Vietnam in terms of
passengers handled.
International services at Tan Son Nhat Airport will soon be
superseded by Long Tanh International Airport. Based in Long
Tanh, Dong Nai Province, about 40 km northeast of Ho Chi
Minh City, Long Tanh Airport will serve international fights,
while the older Tan Son Nhat Airport will serve domestic fights.
Ports and waterways
HCMCs location on the Saigon River makes it a bustling
commercial and passenger port. Saigon Port has the highest
throughput and container trafc of any port in the country.
Approximately 10.2 million tones of goods passed through HCMC
Port in 2011, according to a Saigon Port Authority report. Major
imports into the port include fertilizer, steel, iron, wheat, machinery,
equipment and chemicals, while the major export is rice.
Cargo ships and passenger boats operate regularly between
HCMC and various destinations in Southern Vietnam and
Cambodia, including Vung Tau, Can To and the Mekong Delta,
and Phnom Penh. Trafc between HCMC and Vietnam's southern
provinces has steadily increased over the years and a project to dredge
these routes to facilitate transport has been approved, and will be
implemented between 2011 and 2014.
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