Danang’s Growth Catalyst: The Power of Free Trade

The establishment of the Free Trade Zone is of great significance, serving as a “boost” and a major driving force for the economic development of Da Nang City in particular, and the regional economy as a whole.

The establishment of the Free Trade Zone is expected to create significant momentum to promote the socio-economic development of Da Nang City – Photo: VGP/Minh Trang

Driving Regional Economic Growth

At the 7th session of the 15th National Assembly, a resolution was passed regarding the organization of urban governance and the pilot implementation of several special mechanisms and policies for the development of Da Nang City. For the first time in the country, the National Assembly has allowed Da Nang to pilot the establishment of a Free Trade Zone. This is expected to generate strong momentum for the socio-economic development of the city.

Immediately following the session of the 15th National Assembly, reporting to Da Nang’s voters, Nguyen Van Quang, Secretary of the Da Nang Party Committee, affirmed that the National Assembly’s approval for the city to pilot the establishment of the Free Trade Zone is a major initiative of great significance, serving as a “boost” and a major driving force for the economic development of Da Nang City in particular and the regional economy in general.

Secretary Nguyen Van Quang emphasized that the pilot policy for the Free Trade Zone is a bold, innovative initiative to test a model that has been proven globally but has no precedent in Vietnam.

According to Tran Chi Cuong, Vice Chairman of the Da Nang People’s Committee, allowing the city to pilot the establishment of the Free Trade Zone will provide an effective legal basis for the locality to leverage its potential and advantages.

“The resolution on urban governance and the pilot implementation of special mechanisms and policies for Da Nang, recently passed by the National Assembly, features distinctive and superior characteristics aimed at overcoming limitations and bottlenecks in the implementation of Resolution 119/2020/QH14. This will help unlock resources, foster new driving forces for the development of Da Nang, provide an effective legal basis to harness its potential and advantages, create breakthroughs, and address the bottlenecks and barriers to the socio-economic development of Da Nang,” said Tran Chi Cuong.

The formation of Da Nang’s Free Trade Zone will serve as a foundation for attracting strong FDI inflows into the city and the Central Key Economic Region, promoting the socio-economic development of the region and the entire country, diversifying commercial and tourism activities while reinforcing the city’s central role,” Tran Chi Cuong added.

The High-Tech Park is expected to become the production hub for the Free Trade Zone – Photo: VGP/Minh Trang

Unlocking Resources

According to Le Thi Kim Phuong, Director of the Department of Industry and Trade of Da Nang, the city’s approval to pilot the establishment of a Free Trade Zone will help unlock resources, which will have a very strong and positive impact on future development.

The formation of the Da Nang Free Trade Zone will increase the flow of goods through the city’s seaports, positioning Da Nang as the central seaport hub of the Central region, bringing numerous positive effects to the economy.

Specifically, the Free Trade Zone in Da Nang will promote logistics activities and enhance the value-added services of tourism and commerce in both Vietnam and Da Nang. It will also create a chain of premium service products (tourism, retail, entertainment, etc.), contributing to attracting more tourists to Da Nang and the Central Highlands region.

Additionally, the establishment of the Da Nang Free Trade Zone may bring indirect benefits, such as the establishment of headquarters for major corporations, innovation in science and technology, maritime economic development, talent attraction, and much more, leading to a significant impact on the socio-economic landscape.

Da Nang’s Free Trade Zone is a key factor in attracting major “eagles” (large investors) – Photo: VGP/Minh Trang

Agreeing with the above assessments, Vu Quang Hung, Head of the Management Board of Da Nang’s High-Tech Park and Industrial Zones, stated that the pilot Free Trade Zone model will help position Da Nang as an economic leader.

“With Da Nang’s strategic location, featuring both a deep-water seaport, an international airport, a maritime border, and a land border, as well as being the endpoint of the East-West Economic Corridor, the city is fully capable of establishing a Free Trade Zone. Here, foreign businesses and investors can bring in goods, organize production, preliminary processing, packaging, and labeling before exporting to other countries or bringing them into the domestic Vietnamese market. This presents a significant advantage for Da Nang,” Mr. Hung remarked.

Based on this, Mr. Vu Quang Hung believes that once Da Nang’s Free Trade Zone is established, it will be closely linked with Lien Chieu Port and Da Nang International Airport. This will boost the development of production, processing, recycling, assembly, sorting, and packaging of export and import goods, while also providing logistics services and services related to import-export activities. The goal is to establish an international transshipment hub, creating an increasingly complete technical infrastructure and maximizing the value chain of the seaport and airport.

Additionally, the Free Trade Zone will effectively connect production infrastructure and provide complementary support for future new industrial zones and clusters. It will also link inland ports, railway stations, and major transportation routes.

The area behind Lien Chieu Seaport is planned to become a logistics zone – Photo: VGP/Minh Trang

Planned Construction of Nine Locations

According to Da Nang’s Department of Construction, the city will develop a dispersed Free Trade Zone across nine proposed locations, each designated for various functions such as production, logistics, and commerce-service areas, with a total area of over 1,700 hectares.

These nine locations, proposed by various departments and districts, include:

1. Location 1: An area behind Lien Chieu Seaport (east of Lien Chieu Seaport and west of Lien Chieu Industrial Zone) in Hoa Hiep Bac Ward (Lien Chieu District) with about 100 hectares designated for logistics.
2. Location 2: A 100-hectare area along the Nam Hai Van Bypass (east of Lien Chieu Industrial Zone) from Cu De River to the north of the Nam Hai Van Transfer Station in Hoa Hiep Bac Ward, also proposed for logistics.
3. Location 3: A 400-hectare area north of Cu De River in Hoa Lien Commune (Hoa Vang District), designated for production.
4. Location 4: A 559-hectare area, designated for production, which includes 259 hectares of the existing Da Nang High-Tech Park and an additional 300 hectares for the park’s expansion in Hoa Ninh Commune (Hoa Vang District).
5. Location 5: A 90-hectare area at the base of Ba Na Mountain in Hoa Ninh Commune, designated for commerce and services.
6. Location 6: A 154-hectare area on both sides of Ba Na – Suoi Mo Road, northeast of Truc Dong Lake in Hoa Nhon Commune (Hoa Vang District), designated for commerce and services.
7. Location 7: A 53-hectare area on both sides of Ba Na – Suoi Mo Road, southwest of Truc Dong Lake in Hoa Nhon Commune, also designated for commerce and services.
8. Location 8: A 200-hectare area within the planned Hoa Nhon Industrial Zone, designated for logistics.
9. Location 9: An 80-hectare area southwest of Da Nang Airport (adjacent to Truong Chinh Road), designated for logistics.

Based on these functions, the designated locations can be divided into three groups:

• Commerce and service zones (Locations 5, 6, and 7) totaling approximately 297 hectares.
• Production zones (Locations 3 and 4) covering around 700 hectares, excluding the existing 259-hectare Da Nang High-Tech Park.
• Logistics zones (Locations 1, 2, 8, and 9) with a combined area of about 480 hectares.

In addition to these nine locations, the city will continue to review, adjust, and supplement locations during the planning and development process of the Da Nang Free Trade Zone to ensure feasibility.

Moreover, a 10th location is planned for land reclamation along Nguyen Tat Thanh Road, stretching from Nguyen Sinh Sac Street to the Da Phuoc International Urban Area. This reclaimed area, with a total size of 420 hectares, is also proposed for the Free Trade Zone.