Bac Giang needs more open policies to develop industrial clusters

Under the plan for the period up to 2020, Bac Giang should have 40 ICs. Of those, 27 ICs already have investors in technical infrastructure and secondary investment, while 13 others are adopting procedures for technical investment. Despite a relatively high occupancy rate, Deputy Director of Bac Giang Department of Industry and Trade Nguyen Van Phuong said there are still a lot of difficulties in the management and development of the ICs.

For example, some ICs cannot be built due to inappropriate land use planning. To solve the problem, the local Department of Industry and Trade advised the provincial People’s Committee to use the land of uncleared ICs temporarily to establish new ICs and attract investors.

Due to the US-China trade war, many foreign investors have been looking for investment opportunities in Vietnam, including in Bac Giang. So far, five investors have registered to build ICs infrastructure, drawing several secondary investors. However, according to the Law on Planning, planning of ICs has to conform to other provincial planning, which will not be completed until the end of 2021. Therefore, investors have to wait and this could affect their production and business plans.

In addition, a draft decree amending and supplementing Government Decree No. 68/2017/ND-CP on the management and development of ICs recently reviewed by the Ministry of Industry and Trade said the ability to mobilize investment capital is one of requirements to choose technical infrastructure investors. Phuong said this regulation is difficult to implement because it is not qualitatively or quantitatively clear.

Site clearance is another obstacle in the establishment of ICs in the province even though this is the mission and responsibility of the state and not of enterprises. Therefore, Bac Giang Province sometimes was in embarrassing situations to allow some investors to invest in infrastructure of other ICs.

Furthermore, investors in industrial parks (IPs) can enjoy Corporate Income Tax (CIT) exemption for two years, and reduction of CIT for the next four years but they do not have these preferential incentives when investing in ICs. Thus, there are big gaps in preferential mechanisms between IPs and ICs. To create a level playing field for investors, the draft decree needs more attractive incentives for investing in ICs.

The difficulties concerning the above policies and mechanisms need to be solved thoroughly in order to promote the important role of ICs. Particularly, to attract investors in IC infrastructure, the state needs to create more land fund and then issue bids for contractors and find investors with real financial and management capabilities.