The Economic Breakthrough of the Region with “The First River, The Peak”

Lao Cai’s Socio-Economic Landscape

Lao Cai holds a vital “gateway” position and acts as the “bulwark” of the nation. The province boasts a diverse topography, featuring “headwater rivers and towering mountains.” It is home to a prominent international border gate and boasts a vast area with a sparse population.

Lao Cai is renowned for its famous tourist destinations and diverse soil, abundant in valuable minerals such as apatite, iron, and copper, among others. The province also benefits from a dense network of rivers and streams, along with a steep terrain, which provides an advantage for small and medium-sized hydropower development.

Lao Cai is among the few mountainous provinces in Vietnam with a comprehensive range of transportation options, including highways, railways, waterways, and the upcoming Sa Pa airport. It serves as an economic and diplomatic hub along the Kunming-Lao Cai-Hanoi-Haiphong-Quang Ninh economic corridor and facilitates trade between Vietnamese provinces, ASEAN countries, and Yunnan and southwestern China.

According to the Lao Cai Provincial Party Committee’s report, the province’s estimated GRDP growth rate for 2024 is 7.38%, a significant improvement over 2023’s 5.11% and higher than the national average. The per capita GRDP reached 97.5 million VND per person per year, an increase of 8.9 million VND from the previous year and 80% of the national average. The province’s economic scale is estimated at 78 trillion VND, a rise of 11.8% compared to 2023, ranking 44th out of 63 provinces and cities.

Lao Cai witnessed a vibrant business and commercial environment, with a 9.65% year-on-year increase in total retail sales of goods and services. The province also experienced a significant surge in tourist arrivals, estimated at 7.8 million, an 8% increase from the previous year. Additionally, the total import-export value through the province’s border gates reached an impressive 3.625 billion USD, reflecting a 68% increase compared to 2023.

Lao Cai consistently ranks among the top provinces in Vietnam for high disbursement rates, with an estimated 100% plan achievement in 2024. The province has successfully attracted investments in various sectors, including transportation, healthcare, and education, resulting in the completion of numerous impactful projects.

The province’s state budget collection displayed remarkable improvements, estimated at 12.8 trillion VND for the year, surpassing the Central Government’s target by 39.5% and marking a 35.9% increase from 2023. Lao Cai also achieved impressive credit growth, with total credit resources reaching an estimated 70.8 trillion VND, a 10% increase compared to the previous year.

During a working session with Lao Cai, Prime Minister Pham Minh Chinh emphasized the need to prioritize growth and rejuvenate traditional growth drivers, such as investment, exports, and consumption. He also encouraged the province to explore new growth drivers, including science and technology, innovation, circular and sharing economies, knowledge-based industries, green transition, and digital transformation. The Prime Minister further suggested developing a comprehensive database for Lao Cai to advance artificial intelligence and policy formulation.

Additionally, the Prime Minister urged the province to strive for a GRDP growth rate of over 10% in 2025 and to maximize resource mobilization for development. He emphasized the importance of enhancing the efficiency of investment attraction and utilization, particularly in FDI and public-private partnerships.

Lao Cai is encouraged to continue promoting border gate economic activities as a breakthrough for the province’s economy and the Central Highlands and Northern Mountainous regions. The province is also advised to focus on establishing itself as a hub for economic exchanges between Vietnam, ASEAN countries, and southwestern China.

Lao Cai Border Gate Economic Zone: A National Key Economic Zone

According to the Lao Cai Provincial Foreign Affairs Portal, the Lao Cai Border Gate Economic Zone is the only zone in northern Vietnam with an international border gate located within a city. The zone boasts well-invested transportation infrastructure and cargo handling facilities at its border gates.

The Lao Cai Provincial People’s Committee shared that the Lao Cai Border Gate Economic Zone, established in 2001, has undergone 23 years of development and now boasts a diverse range of industries. It serves as a vibrant trading hub for the ASEAN region and southwestern China and is a growth pole and connectivity center for the Central Highlands and Northern Mountainous regions of Vietnam.

Initially approved with a total area of nearly 6,514 hectares, the zone has expanded through adjustments and now covers nearly 15,929.8 hectares. According to the Lao Cai Economic Zone Management Authority, the province has witnessed robust and stable growth in import and export activities over the years.

The annual state budget revenue from import and export activities accounts for a significant proportion of the province’s total revenue. The zone attracts approximately 500-600 enterprises from inside and outside the province to engage in import and export activities, providing stable jobs and income for thousands of local workers.

In the Master Plan for Lao Cai Province for the period of 2021-2030, with a vision towards 2050, the Lao Cai Border Gate Economic Zone is envisioned to become a dynamic area along the provincial border. The zone’s nucleus will be an economic cooperation area, focusing on border gate economic development, trade, services, industry, logistics, and inland ports.

To boost border gate economic growth, the Provincial Economic Zone Management Authority has actively promoted investment in the zone, particularly in sectors closely linked to import and export activities, such as logistics services, e-commerce, financial services, insurance, export processing, and the construction of standardized warehouses.

The authority has prioritized investments in hard infrastructure, focusing on transportation connectivity between border gates and the Noi Bai-Lao Cai highway and the upcoming Sa Pa airport. Additionally, investments in soft infrastructure, including telecommunications (5G), information technology, and smart border gates, aim to enhance cargo transportation, clearance procedures, and cost optimization for businesses.

According to the Master Plan for the Development of the Lao Cai Border Gate Economic Zone until 2040, with a vision towards 2050, Lao Cai aims to establish the zone as one of the eight key economic zones in Vietnam by 2025. This development is expected to transform Lao Cai into a central hub for trade and economic exchanges between Vietnam, ASEAN countries, and southwestern China, with a projected import-export turnover of 10 billion USD by 2025.