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

Lao Cai’s Social and Economic Landscape

Lao Cai holds a vital “gateway” position and acts as the “bulwark” of the nation. The province boasts a diverse landscape with “headwater rivers and towering mountains.” It is home to a significant 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 mineral resources of high quality and large reserves (such as apatite, iron, and copper). The dense river system and steep terrain provide an advantage for small and medium-sized hydropower development.

Lao Cai is one of the few mountainous provinces in Vietnam with a comprehensive transportation network, including highways, railways, waterways, and the upcoming Sa Pa airport. It serves as an economic and foreign affairs hub along the Kunming-Lao Cai-Hanoi-Haiphong-Quang Ninh economic corridor and a pivotal transshipment center between Vietnamese provinces, ASEAN, and Yunnan’s market and southwestern China.

According to the Lao Cai Provincial Party Committee’s report, the province’s estimated economic growth (GRDP) for 2024 reached 7.38%, a significant increase of 2.2 percentage points compared to 2023 (5.11%) and higher than the national average. The per capita GRDP reached 97.5 million VND (approximately 4,100 USD), an increase of 8.9 million VND (approximately 375 USD) from the previous year and 80% of the national average. The economic scale is estimated at 78 trillion VND (approximately 3.3 billion USD), an 11.8% increase from 2023, ranking 44th out of 63 provinces and cities.

The province witnessed a vibrant trade and business environment, with a 9.65% year-on-year increase in total retail sales of goods and services revenue. Tourist arrivals surged, reaching an estimated 7.8 million, an 8% increase from the previous year. The total import-export value through the province’s border gates reached an estimated 3.625 billion USD, a remarkable 68% increase from 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 attracted investments in various projects related to transportation, healthcare, and education, with many effective infrastructure developments.

The provincial state budget revenue witnessed a positive turnaround, estimated at 12.8 trillion VND (approximately 540 million USD), exceeding the central government’s target by 39.5% and a 35.9% increase from 2023. Credit growth performed well, with total credit capital reaching an estimated 70.8 trillion VND (approximately 3 billion USD), a 10% increase from the previous year.

During a working session with Lao Cai, Prime Minister Pham Minh Chinh requested that the province prioritize growth and rejuvenate traditional growth drivers (investment, exports, and consumption). He also emphasized the need to promote new growth drivers, including science and technology, innovation, circular and sharing economies, knowledge-based economy, green transition, and digital transformation. The province was advised to build a database to develop artificial intelligence and formulate policies.

The Prime Minister further instructed the province to strive for a GRDP growth rate of over 10% in 2025 and to mobilize resources for development effectively. He also emphasized the importance of enhancing the efficiency of investment attraction and utilization, particularly FDI and public-private partnerships.

Lao Cai was encouraged to continue promoting border gate economic development as a breakthrough for the province’s economy and the Central Highlands and Northern Mountainous regions. The province should focus on establishing itself as a pivotal connection 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 Information Portal, the Lao Cai Border Gate Economic Zone is the only northern economic zone with an international border gate located within a city. The transportation infrastructure and yards at the border gates within the zone have been significantly invested in and are now relatively comprehensive.

The People’s Committee of Lao Cai Province shared that the Lao Cai Border Gate Economic Zone has been developing multi-sectorally since its establishment in 2001. It has become a hub for the ASEAN region and southwestern China and a growth pole and pivotal connection for the Central Highlands and Northern Mountainous regions with the rest of Vietnam.

Initially approved with a total area of nearly 6,514 hectares, the zone has expanded to nearly 15,929.8 hectares after adjustments. The Management Board of Lao Cai Economic Zone reported that import and export activities through the province’s border gates have grown steadily and robustly over the years.

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

The Lao Cai Provincial Planning for the period of 2021-2030, with a vision toward 2050, positions the Lao Cai Border Gate Economic Zone as a driving force for the province’s border area development. The zone’s nucleus is the cross-border economic cooperation, focusing on border gate economic development, trade, services, industry, logistics, and inland ports.

To boost border gate economic growth, the Provincial Economic Zone Management Board has actively promoted investment attraction into the zone in recent years. They have particularly focused on attracting investment in key sectors related to import and export activities, such as logistics services, e-commerce, financial and insurance services, export processing, and the construction of standard goods storage warehouses.

The province has concentrated resources on investing in hard infrastructure, with a focus on connecting transportation systems to border gates, the Noi Bai-Lao Cai highway, and the upcoming Sa Pa airport. They have also prioritized soft infrastructure, including telecommunications (5G), information technology, and smart border gates, to enhance transportation capacity, clearance procedures, and logistics cost optimization for enterprises.

According to the master plan for the development of the Lao Cai Border Gate Economic Zone until 2040, with a vision toward 2050, Lao Cai aims to become one of the eight key economic zones in Vietnam by 2025. The province also targets a foreign trade turnover of 10 billion USD in 2025, with the economic zone serving as the nucleus for Lao Cai to become a pivotal connection for economic exchanges between Vietnam, ASEAN countries, and southwestern China.