Hai Phong, already known as a key industrial-logistics-seaport axis in Vietnam, is undergoing a historic transformation. The 2024 administrative merger with Hai Duong has propelled it to the forefront of national development. The combined economic output now ranks third in the country, trailing only Hanoi and Ho Chi Minh City. But the numbers only tell part of the story.
This transformation is an economic, infrastructural, and strategic one. With an ambitious vision, Hai Phong is leveraging structural reforms, regional integration, and policy innovation to reshape itself as a competitive growth pole in northern Vietnam, capable of rivaling traditional economic powerhouses.
Structural transformation through merger
A new two-tier government
The newly consolidated Hai Phong is governed under a unique two-tier system of central city and commune/ward levels, completely bypassing districts. This is the first time such a model has been implemented in northern Vietnam. The new political-administrative center, located in Thuy Nguyen district, spans 13.6 hectares with a total investment of 2,831 billion VND, underscoring the city’s commitment to urban modernization and governance innovation.
Economic scale and impact
Before the merger, Hai Phong ranked 5th and Hai Duong 11th in Gross Regional Domestic Product (GRDP). Now unified, the new Hai Phong’s GRDP reaches 658 trillion VND (approx. $26 billion), pushing the city to third place nationally. More than just a statistical leap, this elevation reflects a well-integrated urban-industrial ecosystem ready to absorb investment, talent, and capital on a massive scale.
The merger not only increases economic heft but also aligns the development trajectories of both regions. Hai Duong, traditionally a satellite supplying goods and labor, now directly feeds into Hai Phong’s high-growth sectors such as manufacturing, logistics, and services.
Building a superconnected city
A transportation quartet
Hai Phong’s comprehensive transportation network positions it as Vietnam’s best-connected city. It possesses four transportation modes that work in tandem to bring out the best of the province’s infrastructure. Three among them are road, rail, and air:
- Roadways: the Hanoi-Hai Phong & Quang Ninh-Hai Phong expressways, national highways (5, 10, 17), and beltways form an efficient land transport grid. Strategic nodes like Thuy Nguyen, Kinh Mon, and Chi Linh are now within seamless reach of seaport and industrial zones.
- Railways: the proposed Lao Cai–Hanoi–Hai Phong high-speed rail promises a trans-Asian logistics corridor, connecting northern Vietnam to China and beyond. This would give Hai Phong a strategic edge that even Hanoi and Ho Chi Minh City currently lack.
- Airways: the Cat Bi International Airport already processes millions of passengers annually, and the future Tien Lang International Airport, with a projected capacity to serve northern regional aviation, will further cement Hai Phong’s multimodal logistical advantage.
Setting sail to global trade
Hai Phong’s port system deserves its own section. It boasts the largest waterway node in northern Vietnam, including Lach Huyen, Dinh Vu, Tan Vu, Nam Dinh Vu, and Nam Do Son. With over 70 operational wharves, including deep-water capabilities that accommodate ships over 130,000 DWT, these ports connect Vietnam directly to global shipping routes. Lach Huyen alone has become a focal point of the city’s ambition to be a maritime trade hub.
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More capital, more confidence
A new peak in FDI inflows
In 2024, Hai Phong boasted nearly $45 billion in foreign direct investment (FDI) across more than 1,850 projects from nearly 50 countries and territories. This puts the city on par with some newly industrialized economies in Southeast Asia. The bulk of these investments are in industrial and logistics zones, which collectively span 10,000 hectares (most of which are already operational or handed over.)
2025 investment promotion conference
At the heart of Hai Phong’s investment momentum is the 2025 Investment Promotion Conference, held as part of the third APEC Business Advisory Council (ABAC) meeting. Scheduled for July 15, the event is expected to catalyze new waves of capital. On the agenda: issuing investment certificates for 32 projects and signing seven MOUs, collectively worth over $15.6 billion.
These projects range from infrastructure development in Tan Trao and Thuy Nguyen to high-tech zones in Kim Thanh 2 and Tien Lang Airport. The ripple effects are expected to transform Hai Phong’s socio-economic landscape, creating jobs, expanding industrial zones, and propelling urbanization.
The first Free Trade Zone (FTZ) in Vietnam’s North
An institutional breakthrough
Hai Phong is the first locality authorized by the National Assembly to pilot a Free Trade Zone (FTZ). This a new governance and economic model with exceptional incentives. Under Resolution 35, the FTZ spans 6,470 hectares across Dinh Vu–Cat Hai and southern coastal areas. Its location is strategic, encompassing Lach Huyen Port, Cat Bi Airport, and economic powerhouses like Deep C, VSIP, and Nam Dinh Vu.
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Policy and infrastructure synergy
This FTZ embodies a broader economic experiment than simply taxes. It aims to integrate logistics, production, R&D, and finance under a modern, liberalized framework. Policymakers envision it as a sandbox to test future economic policies and as a vehicle to attract strategic industries like semiconductor manufacturing, biotechnology, and global financial services.
Experts believe this could be a turning point for Vietnam’s global economic competitiveness. The FTZ model is expected to be replicated if successful, much like Shenzhen’s influence on Chinese economic reform.
A real estate renaissance for Hai Phong
A new, integrated market
Real estate development in Hai Phong is entering a new golden era. The two-tier governance model accelerates planning approvals and land clearance, creating a more predictable and attractive environment for developers. The merger is also dissolving administrative boundaries, particularly between Thuy Nguyen and Kinh Mon, fostering integrated industrial-urban corridors.
According to Nguyen Quang Van, Chairman of the Hai Phong Real Estate Association, the planning logic is shifting from “isolated centers” to “regional urban ecosystems.” Instead of being bound by administrative divisions, new developments are aligned with economic corridors, where industries, services, and residences coexist and feed off each other.
Investment hotspots and growth corridors
Flagship real estate projects include Vinhomes Golden City and Vinhomes Royal Island (located strategically near expressways and industrial hubs). These developments are not just residential zones; they are components of wider economic ecosystems that include ports, factories, and trade zones.
The border areas with Hanoi, Quang Ninh, and Hai Duong are also experiencing rapid valuation increases, with Hai Phong projected to enter a new 5–7-year real estate price surge cycle.
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Fiscal powerhouse and sustainable growth
Consistent budget surpluses
Hai Phong’s state budget revenues have exceeded 100 trillion VND annually for three consecutive years (2022–2024), placing it among the top fiscal performers nationwide. The average annual revenue growth rate for 2021–2025 is projected at 7.06%, with domestic revenue rising by 9.27%.
This fiscal strength provides Hai Phong with autonomy and resilience in public investment, infrastructure development, and social programs. It also reflects a mature, well-diversified economy with strong private and FDI sector contributions.
Sectoral shifts and future readiness
While industry and logistics remain Hai Phong’s backbone, there is a clear shift toward high-end services, urban development, and knowledge-based industries. The labor force from Hai Duong is expected to flow into these new sectors, helping re-balance economic structures and support sustainable growth.
How InCorp Vietnam can help?
The new Hai Phong is not simply two provinces merged together. It’s a boiling pot of economic ambition, policy innovation, and regional integration. Navigating this evolving landscape requires deep local insight and hands-on support, and InCorp Vietnam is ready to help.
With expertise in regulatory frameworks, business setup, and local engagement, InCorp helps investors position themselves at the forefront of Hai Phong’s transformation, whether you are a policymaker, an investor, or an enterprise looking for your next growth destination. Whatever your aim is, InCorp ensures you are ready to thrive in what may be Vietnam’s next urban and economic success story.
