Note: This article looks broadly at the business environment in Bac Ninh. For specific details on setting up a company in Vietnam see: How to Start a Business in Vietnam: Ultimate Guide 2024.
Bac Ninh province has rapidly emerged as a top choice for foreign investors seeking to tap into Vietnam’s thriving manufacturing sector. Its strategic location within the Red River Delta, coupled with solid manufacturing infrastructure and a skilled workforce, has propelled the province into a manufacturing powerhouse.
The province boasts a robust industrial ecosystem, home to numerous industrial parks and export processing zones. With a focus on attracting high-tech industries, Bac Ninh has become a magnet for electronics, machinery, and automotive manufacturers.
Beyond its manufacturing prowess, Bac Ninh is also experiencing growth in other sectors, including supporting industries, logistics, and services. This diversification strengthens the province’s economy and offers additional investment opportunities for businesses looking to expand their operations in Vietnam.
Key Economic Sectors in Bac Ninh
Bac Ninh province has experienced rapid economic growth, transforming from an agricultural-based economy to a thriving industrial hub. The province’s economic landscape is primarily shaped by the following key sectors:
- Manufacturing: As the cornerstone of Bac Ninh’s economy, manufacturing accounts for the largest share of the province’s GDP. Electronics, particularly mobile phone components and semiconductors, are the dominant industries, with major global corporations establishing their production facilities here.
- Supporting Industries: To support the manufacturing sector, Bac Ninh has developed a robust ecosystem of supporting industries, including logistics, transportation, packaging, and materials supply.
- Services: The service sector is growing in importance, with a focus on information technology, telecommunications, finance, and business support services.
- Agriculture: Despite industrialization, agriculture remains a significant contributor to the local economy, with rice cultivation being the primary activity. Efforts are underway to modernise agricultural practices and increase value-added products.
The province’s strategic location, coupled with a skilled workforce and supportive government policies, has made it an attractive destination for both domestic and foreign investors.
Public Administration Performance Index
The Public Administration Performance Index (PAPI) measures the efficiency and quality of public administration services provided by a government. In the context of Bac Ninh, the PAPI provides insights into the city’s governance effectiveness.
PAPI, Bac Ninh, 2019 to 2023
Note that missing data from 2021 and 2022 has been attributed to ‘data noise’. It’s not clear what this means.
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Participation | 5.53 | 5.82 | 0 | 5.42 | 5.19 |
| Transparency of Local Decision-making | 5.82 | 0 | 0 | 5.90 | 5.43 |
| Vertical Accountability | 4.55 | 0 | 0 | 5.27 | 5.01 |
| Control of Corruption in the Public Sector | 7.16 | 0 | 0 | 7.18 | 6.07 |
| Public Administrative Procedures | 7.27 | 7.58 | 0 | 7.64 | 7.19 |
| Public Service Delivery | 8.26 | 8.09 | 0 | 7.28 | 7.38 |
| Environmental Governance | 3.38 | 3.77 | 0 | 3.17 | 3.01 |
| E-Governance | 3.73 | 0.0 | 0 | 3.45 | 2.79 |
| Unweighted PAPI Score | 45.70 | 25.26 | 0 | 45.31 | 42.08 |
Source: The Viet Nam Provincial Governance and Public Administration Performance Index
Provincial Competitiveness Index
The Provincial Competitiveness Index (PCI) is a key tool for evaluating the business environment in Vietnam’s provinces. Bac Ninh, as a manufacturing hub, is always a focal point in PCI reports.
PCI, Bac Ninh, 2019 to 2023
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Entry Costs | 7.41 | 7.13 | 6.53 | 7.04 | 6.88 |
| Access to land | 6.96 | 7.05 | 7.14 | 7.07 | 7.55 |
| Transparency | 6.68 | 6.59 | 6.39 | 5.34 | 7.02 |
| Time Costs | 7.74 | 8.54 | 8.47 | 8.42 | 7.23 |
| Informal Charges | 6.79 | 6.83 | 7.27 | 7.69 | 7.24 |
| Policy Bias | 5.91 | 6.93 | 6.29 | 6.46 | 7.51 |
| Proactivity | 6.42 | 6.23 | 7.27 | 6.55 | 7.34 |
| Business Support Policy | 5.47 | 6.48 | 7.27 | 6.75 | 6.62 |
| Labor Policy | 6.51 | 7.57 | 6.74 | 6.82 | 7.03 |
| Law & Order | 7.64 | 7.09 | 7.06 | 6.95 | 7.91 |
| PCI Scores | 67.53 | 69.08 | 69.45 | 66.74 | 70.79 |
| Ranking | N/A | 7 | 7 | 10 | 4 |
N/A: The PCI stopped publishing rankings for provinces outside of the top 30.
Source: Provincial Competitiveness Index 2023
Foreign direct investment in Bac Ninh
Bac Ninh has emerged as a prominent destination for foreign direct investment in Vietnam. Its strategic location, coupled with a favourable investment climate, has attracted numerous multinational corporations to establish their manufacturing facilities in the province.
Notably, in the first seven months of 2024, Bac Ninh launched 259 new projects with registered capital of just shy of US$3.2 billion. This was more than three times the registered capital Bac Ninh recorded in the first seven months of 2023 which was just US$1.05 billion.
Global companies in Bac Ninh
Some of the most prominent and influential firms with factories in Bac Ninh include:
- Samsung: A global tech giant, Samsung has made substantial investments in Bac Ninh for manufacturing smartphones, components, and related electronic products, solidifying its position as one of the largest foreign investors in Vietnam.
- LG: Another South Korean electronics conglomerate, LG has established production facilities for televisions, mobile phones, and other electronic devices, contributing significantly to Bac Ninh’s economic growth.
- Foxconn: A major Taiwanese electronics contract manufacturer, Foxconn has a significant presence in Bac Ninh, producing products for global tech brands, and is a key player in the province’s electronics ecosystem.
- Canon: The Japanese imaging and optical products company has invested in production facilities for cameras, printers, and other imaging equipment, diversifying Bac Ninh’s industrial base.
Entertainment and Nightlife in Bac Ninh
While Bac Ninh is primarily known for its industrial development, it also offers a growing range of entertainment and nightlife options to cater to both locals and visitors.
Nightlife
Bac Ninh’s nightlife scene is still developing compared to larger cities, but it’s gradually gaining momentum. You can find a selection of bars and pubs, particularly in the city centre, offering a relaxed atmosphere to unwind after a day of work or sightseeing. Live music performances are becoming more common, adding to the entertainment options.
Entertainment
Beyond nightlife, Bac Ninh offers several cultural and recreational activities. The province boasts historical sites, temples, and pagodas, which are perfect for exploring and learning about the region’s heritage. Additionally, there are parks and green spaces for outdoor activities, such as picnics and leisurely walks.
While Bac Ninh may not have the same vibrant nightlife as Ho Chi Minh City or Hanoi, it provides a more laid-back and authentic experience. It’s an ideal place to relax and immerse yourself in local culture.
What’s next?
Bac Ninh has established itself as a leading FDI destination in Vietnam. The province’s strategic location, robust infrastructure, and favourable investment climate have attracted significant foreign investment, primarily in the electronics, automotive, and machinery sectors.
FDI has been a catalyst for Bac Ninh’s economic growth, generating employment, transferring technology, and improving infrastructure. While challenges such as environmental impact and skill shortages persist, the province’s proactive approach to addressing these issues positions it for continued success in attracting foreign investment.
To sustain its growth trajectory, Bac Ninh will need to focus on maintaining a competitive investment climate, fostering innovation, and developing a skilled workforce.
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