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 topography, featuring “headwater rivers and towering mountains.” It is home to a significant international border gate and offers a vast area with a sparse population.

Lao Cai is renowned for its famous tourist destinations and diverse soil types. It is endowed with abundant mineral resources, including high-quality and large reserves of valuable minerals such as apatite, iron, and copper. 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 one of 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 a pivotal transshipment center between Vietnamese provinces, ASEAN countries, and Yunnan and southwestern China.

According to the Lao Cai Provincial Party Committee’s report, the province’s estimated economic growth rate (GRDP) for 2024 is 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) per year, an improvement of 8.9 million VND (approximately 376 USD) from 2023, equivalent to 80% of the national average. The economic scale is estimated at 78 trillion VND (approximately 3.3 billion USD), a rise of 11.8% from 2023, ranking 44th out of 63 provinces and cities.

Lao Cai witnessed a vibrant commercial atmosphere, with a 9.65% year-on-year increase in total retail sales of goods and services. The province experienced a significant surge in tourist arrivals, reaching an estimated 7.8 million, an increase of 8% compared to the previous year. The total import-export value through the border gates for the year is estimated at 3.625 billion USD, a remarkable 68% jump from 2023.

Lao Cai consistently ranks among the provinces with high disbursement rates in the country, with an estimated rate of 100% of the plan for 2024. The province has prioritized investments in critical sectors such as transportation, healthcare, and education, resulting in the completion of numerous impactful projects.

The provincial state budget revenue witnessed a positive turnaround, estimated at 12.8 trillion VND (approximately 541 million USD) for the year, equivalent to 139.5% of the Central Government’s assignment and a 135.9% increase compared to 2023. Credit growth performed well, with the total credit capital estimated at 70.8 trillion VND (approximately 3 billion USD), a 10% rise compared to the previous year.

During a working session with Lao Cai, Prime Minister Pham Minh Chinh requested that the province continue to prioritize growth and rejuvenate traditional growth drivers, including investment, exports, and consumption. He also emphasized the need to promote new growth drivers, such as science and technology, innovation, circular and sharing economies, knowledge-based industries, green transition, and digital transformation. The Prime Minister further suggested developing a 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 approximately 10% in 2025. He emphasized the importance of mobilizing all resources for development and improving the efficiency of investment attraction and utilization, particularly FDI and public-private partnerships.

Lao Cai’s border gate economic zone is poised to become the economic breakthrough for the province and the northern mountainous region. The province aims to establish itself as a pivotal transshipment center for trade 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 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 the border gates.

The People’s Committee of Lao Cai Province shared that the Lao Cai Border Gate Economic Zone, established in 2001, has evolved into a diverse, multi-sectoral hub over 23 years. It serves as a vital commercial link for the ASEAN region and southwestern China and is a growth pole and connectivity center for the northern mountainous region with the rest of the country.

Initially approved with an area of nearly 6,514 hectares, the zone has now expanded to nearly 15,929.8 hectares after adjustments. The Management Board of Lao Cai Economic Zone highlighted the significant growth in import and export activities through the province’s border gates in recent years.

The annual state budget revenue from import and export activities accounts for a substantial 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 employment 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 zone is positioned to become a driving force for the province’s border area development. The zone’s nucleus will be a cross-border 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 Board has actively promoted investment in 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 standardized goods storage warehouses.

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

According to the Master Plan for the Development of 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 the country by 2025. The province also targets a foreign trade turnover of 10 billion USD in 2025, making it a pivotal link between Vietnam, ASEAN countries, and southwestern China.