While Ho Chi Minh City hogs the limelight in Vietnam’s economic boom, further north the nation’s third largest city is well on its way to its goal of becoming ‘the Singapore of Vietnam’.
Over the past five years, Da Nang city has undergone a building boom, spending US$4.5 billion on infrastructure projects. For eight years in a row, the city has ranked top in the Vietnam Provincial Competitiveness Index for the categories of good governance and business-friendly policies.
Da Nang is the main commercial and educational center of central Vietnam, well known for its clean environment, beautiful beaches and good public services. It is often referred to as the most livable city in Vietnam. Currently, the city has an estimated 1 million inhabitants in its urban areas, although the city’s master plan calls for a population of over 2 million by 2020.
With better infrastructure, a beachside lifestyle attracting more and more Vietnamese and expats – not to mention a thriving tourism industry – the city is now attracting retail heavyweights who until now have mostly focused on just Ho Chi Minh City and Hanoi, the capital, in the north.
Malaysia-based department store Parkson this year opened in the city centre, with an overbridge linking it to the Korean-owned CVG cinema built on top of a Thai Big C hypermarket.
While many people turned up for the Parkson opening and signed up for membership cards, the store is largely empty most days and the third-floor food court has yet to open. But the owners will be realistic – with a potential doubling of the population within five years, they know all too well the customers will come.
Philippines-Vietnam joint venture Highlands Coffee has opened on the riverfront and is always busy, prompting a second cafe just a few blocks away. New restaurants – both local and foreign – are opening almost weekly and there is a steady stream of expatriates moving north from the crowded commercial capital.
Da Nang’s rapid rise is the product of shrewd infrastructure investment. New projects have included the Da Nang Hi-Tech Park and the Da Nang IT Park. The Hi-Tech Park is currently under construction and will consist of over 1130 hectares once finished. The park aims to boost science and technology development in the city by attracting both foreign and local investors. It’s offering financial incentives to business, including a 10 per cent tax rate 15 years, or a four-year tax exemption and a 50 per cent tax reduction for the next nine years.
The Da Nang IT Park offers zero per cent tax for the first four years after first turning a profit, a five per cent tax rate for the next nine years and a 10 per cent tax rate for the next two.
The IT park also offers up to 50 years of free land lease to qualifying “anchor tenants”, depending on the type of industry and size of the investment.
Other key recent infrastructure projects include US$60 million for a new airport terminal, $88 million on a new city hall and $93 million on a futuristic three-storey overpass.
A monitoring system, installed by IBM, provides real-time updates on bus routes and checks water quality. Cisco Systems has installed over 300 kilometers of fiber-optic cable, which connects all government offices in the region.
Already an important landmark of Da Nang, and a clear sign of its growing strength, is the recently built Dragon Bridge, which crosses the Han River, and made headlines around the world for its spectacular design. The 666-meter-long dragon-shaped bridge breathes fire and spouts plumes of water. The dragon is one of the most important symbols in Vietnamese culture as it symbolises power, nobility and good fortune. Therefore, more than just an award-winning architectural design, the Dragon Bridge has become a symbol of the newfound strength of the city.
It is clear that Da Nang is well on its way to becoming a modern city with an effective and transparent bureaucratic system. With its improving business and investment climate, paired with its plentiful financial incentives, the city clearly deserves the honorific of Vietnam’s Singapore.
- Additional reporting from Louis Allen.
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