Lao Cai city is increasingly developing in the border area. Photo: Manh Dung

Lao Cai city is located on the economic corridor of Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam)

The economic corridor collaboration linking the five provinces and cities of Kunming (Yunnan, China), Lao Cai, Hanoi, Hai Phong, and Quang Ninh (Vietnam) has been in place since 2004. At the conferences, the economic corridor cooperation executed many rich and quality contents, demonstrating its efficacy in boosting collaboration between member provinces and cities in domains ranging from the economics to culture and society. In particular, member provinces and cities have taken advantage of their geographical location, promoted the benefits of transportation connections, and leveraged the capabilities of each locality to seize opportunities and respond to difficulties, resulting in many spectacular outcomes.

Holding an extremely important position on the economic corridor of Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam), Lao Cai city is a bridge and gateway not only for Vietnam but also for ASEAN countries to the Southern and Southwestern markets of China. Possessing inter-regional and international transport infrastructure including: roads, railways, waterways and in the future, airways, and having Lao Cai Border Gate Economic Zone - one of the eight key border gate economic zones invested by the Government, along with many mineral mines with large reserves, Lao Cai city is attracting more and more investment from domestic and foreign enterprises.

Specifically, in terms of socio-economic conditions, Lao Cai city in the border area still faces many difficulties and has a different level of development compared to the provinces and cities that are members of the corridor. However, this difference has created the driving force for Lao Cai city to develop strongly. In fact, the Northwest corridor of Vietnam (including Lao Cai city) has made fundamental economic developments, people's lives have improved significantly, urbanization has been promoted thanks to investment policies and incentives applied by the State. On the other hand, the Hanoi - Hai Phong - Quang Ninh area is one of the areas with the highest economic development in the country, with the largest purchasing power in the corridor, creating a huge flow of goods and this flow of goods passes through Lao Cai before entering the market, increasing the role of Lao Cai as a hub and transit station on the corridor. The natural differences in socio -economic conditions have contributed to increasing sustainable links and mutual support among member regions of the corridor for the purpose of promoting common economic development along the entire route.

Transportation networks, communications, electricity, border trade zones, border economic zones, and other infrastructural elements are critical for an economic corridor. Recognizing this, in recent years, Lao Cai city has prioritized infrastructure development through a succession of significant projects, with an emphasis on infrastructure development, particularly those in the Lao Cai Border Economic Zone. Highways and railways have also seen significant investment and expansion. The finished and implemented projects not only enhance the socioeconomic growth of Lao Cai city, but also broaden and smooth the space for cooperation and connection, with a significant spillover effect on nearby regions.

Import and export activities through Kim Thanh International Road Border Gate No. II are bustling. Photo: Viet Vinh

The reason why Lao Cai city can play an important role and position is because the city owns international border gates such as Lao Cai - Ha Khau International Road Border Gate and Lao Cai - Ha Khau International Railway Border Gate. The international border gates in Lao Cai have an important position in the process of economic and trade exchanges across the land border between Vietnam and China, being an important gateway of the Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam) economic corridor, a transit point for goods with the shortest journey connecting Vietnam and countries in the region through seaports to the Southwest of China. The international border gates in Lao Cai have become the most important buffer zone of the ASEAN - China Free Trade Area (ACFTA) - formed and put into operation since 2010.

International border gates in Lao Cai hold special advantages when compared to other localities in the country. Lao Cai is the only locality with a border gate located in the provincial city, thereby possessing a whole service system of Lao Cai city to serve the needs of economic - trade exchange, import - export. International border gates in Lao Cai are also located in Lao Cai Border Gate Economic Zone, which was planned and built since 1998, put into operation since 2001, aiming to build a key economic driving force of Lao Cai province. Lao Cai Border Gate Economic Zone is planned into separate functional areas, with many incentives for investment activities, and the Government has created attractive financial and credit conditions for organizations and enterprises doing business and operating here. The continuous expansion of Lao Cai Border Gate Economic Zone in recent years has contributed significantly to promoting traffic activities through international border gates in Lao Cai to China and vice versa.

Results of exploiting the advantages of economic corridors and the potential of international border gates in Lao Cai

Dong Pho Moi Industrial Park. Photo: Manh Dung

Taking full advantage of its advantages and maximizing its important role, over the past years, Lao Cai province in general and Lao Cai city in particular have achieved many outstanding achievements:

The average growth rate from 2015 to 2020 was 16.4%, and the average income per capita increased steadily over time, reaching 86 million Vietnamese dong in 2020, exceeding the Congress Resolution's target, 1.43 times higher than the first year of the term, and 1.3 times higher than the provincial average. During the period 2015-2020, import-export turnover reached 3.4 billion US dollars in 2020, which is 3.36 times greater than in 2016. Revenue from import-export activities in 2020 exceeded 2,300 billion Vietnamese dong, 1.7 times greater than in 2016.

Trade and services are important in Lao Cai, cementing the city's status as a link in the Kunming-Lao Cai-Hanoi-Hai Phong-Quang Ninh economic corridor. Lao Cai's international border gates have evolved into popular international commercial destinations, serving as important import and export hubs. Lao Cai has long advocated for the preservation and expansion of market share for existing export products and markets, while aggressively developing new export products and markets. Import and export services have also improved significantly. Logistics services have enticed hundreds of firms to cooperate

The system of markets, supermarkets and shopping malls has been invested in and developed strongly. Photo: Viet Vinh

The commercial and service infrastructure, including markets, supermarkets, shopping malls, and hotels, has been invested in and developed strongly. The city has 13 markets and 11,300 commercial and service establishments, with the scale of the establishments increasing by an average of 1.5 times compared to the first year of the term. The city's tourism industry has developed in both scale and quality, with accommodation establishments increasing by 21% and tourists increasing by an average of 40% per year...

Market research, participation and organization of import-export connection activities, as well as domestic and international fairs and exhibitions, are utilized to promote trade. Service types are becoming more diverse and of higher quality, as service groups serving import-export activities such as finance, banking, customs procedures, temporary import and re-export, logistics, telecommunications, and transportation keep up with trends and meet integration requirements, etc.

Continue to promote the advantages of the economic corridor

Resolution No. 16-NQ/TU of 2021 of the Lao Cai Provincial Party Committee on the development of Lao Cai city to 2030, with a vision to 2050, clearly states: “Lao Cai city plays a particularly important role in the development of Lao Cai province; is the driving force, political, economic, cultural and social center of the province; an important trade “bridge” position between provinces and cities of Vietnam and the Southwest region of China”.

In the "dual circulation" economic strategy announced by China in October 2022, Vietnam in general and Lao Cai in particular play an important role. In this Strategy, China emphasizes the orientation of shifting the driving force of economic development from export - investment to consumption - innovation; shifting from focusing on the US and the West to zoning, regionalization, and closer ties with Asian countries, promoting regional connectivity through expanding and strengthening cooperation with East Asian countries and ASEAN countries... When China implements this strategy, Vietnam and Lao Cai play an important role in China's "outside circulation" because Vietnam is the only country with a close geographical location and convenient traffic connections to China, while Lao Cai is a bridge and gateway for China through Vietnam. Chinese enterprises and multinational corporations from China to the northern provinces of Vietnam can conveniently connect by road, transporting raw materials and goods to production facilities in Vietnam within 24 hours. In the short term, Vietnam is also China's safest foreign market, due to its good control of the Covid-19 epidemic.

The development orientation of Yunnan Province (China) to 2035 identifies tasks to strengthen cooperation and economic connectivity with neighboring localities and countries in Southeast Asia. Yunnan identifies other important foreign economic tasks such as: building a pilot free trade zone with high standards, opening up more deeply to the outside world. Combining Yunnan Province's locational advantages in opening up to South Asia, Southeast Asia and around the Indian Ocean. Accordingly, Yunnan Province will become a strategic link between a strong domestic market and international markets in South Asia and Southeast Asia and an important support for the "dual circulation strategy"; promoting the modernization of the governance system and governance capacity in ethnic minority areas at the border... With Lao Cai Province, Yunnan is actively implementing the construction of cross-border economic cooperation zones with neighboring localities, including the Lao Cai - Yunnan Cross-Border Economic Cooperation Zone.

Lao Cai City continues to maximize its advantages on the economic corridor of Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam) and the potential of border gates for economic development. Photo: Manh Dung

That context opens up numerous opportunities for Lao Cai's development, necessitating a focus on maximizing the benefits of the Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam) economic corridor and the potential for economic development of international border gates in Lao Cai.

In the coming time, with the attention of the Central Government, Lao Cai will focus on prioritizing infrastructure development, especially upgrading the Noi Bai - Lao Cai expressway, investing in the Lao Cai - Hanoi - Hai Phong high-speed railway, and traffic connections between economic zones. In addition, the city will prioritize calling for investment in standard commercial centers, promoting the development of e-commerce, building specialized streets; promoting trade promotion, attracting investment in high value-added manufacturing industries; strictly implementing legal regulations, complying with decisions of the Lao Cai Provincial People's Committee and the Government on investment incentive policies, focusing on investment quality rather than quantity; strengthening propaganda and promotion of the potential strengths and orientations of Lao Cai province and city in the socio-economic development strategy, especially in the strategy to promote import - export activities, trade, services, and tourism; Coordinate to provide timely information on changes in the mechanisms and policies for managing border trade activities between the two sides so that state management agencies and businesses on each side can promptly grasp and make appropriate adjustments...

With a key position and being an important link on the economic corridor of Kunming (China) - Lao Cai - Hanoi - Hai Phong - Quang Ninh (Vietnam), Lao Cai city has promoted its role well and initially taken advantage of the advantages that the corridor brings in promoting the activities of international border gates in Lao Cai, developing Lao Cai Border Gate Economic Zone and gradually improving the urban landscape, raising the living standards of people, attracting investment capital inside and outside the province, affirming its position as a regional connection center.

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