Decision No. 14/2006/QD-BCN Approving the Planning for the Development of Industry and Small-Scale Handicrafts along the Vietnam-China Border until 2010

Pursuant to …;

Approve the Master Plan for the Development of Industry and Small-Scale Industries along the Vietnam-China Border until 2010

_________________________

MINISTER OF INDUSTRY

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to Decision No. 120/2003/QĐ-TTg dated June 11, 2003 of the Prime Minister approving the Strategy for Economic and Social Development along the Vietnam-China Border;

Pursuant to Circular No. 1332/VPCP-CN of the Government Office regarding the delegation of authority to approve the Master Plan for the Development of Industry and Small-Scale Industries along the Vietnam-China Border until 2010;

In accordance with the proposal of the Director of the Planning Department.

Pursuant to …;

Article 1. Approve the Master Plan for the Development of Industry and Small-Scale Industries along the Vietnam-China Border with the main contents as follows:

1. Development Orientation

- Ensuring national defense and security, social order and safety, sovereignty, and territorial integrity, paying attention to the organic relationship with surrounding regions and the whole country based on division of labor and cooperative mutual benefit, gradually improving the economic life and raising the cultural level of the people in the area.

- Mobilizing all resources from ethnic groups in the region, other provinces, domestic enterprises of all economic sectors, and foreign investment, particularly from China and ASEAN countries. The State will focus on developing infrastructure and support policies for industrial and small-scale industrial enterprises.

- Maximizing the potential and advantages of the border region, which serves as a gateway for Vietnam and ASEAN countries to interact with China, promoting cooperation and import-export activities with border areas of China.

- Concentrating on developing industry and small-scale industry in key border gateways; industrial zones, clusters, encouraging development in other areas along the border with medium and small scales. Combining the development of small-scale industry with tourism. Paying special attention to environmental protection, especially forest conservation and water sources.

2. Orientation for Development until 2010

- Prioritizing investment in industries with competitive advantages such as: medium and small-scale mining and mineral processing, agricultural and forestry product processing, construction materials, small hydropower plants, fertilizers, chemicals, and mechanical repair. Giving priority to attracting investment in export-oriented processing and manufacturing industries, production of packaging materials for export to the Chinese market. Emphasizing the development of small-scale industries and traditional crafts that utilize local labor and raw materials such as weaving, bamboo and rattan products, wood carving, household furniture, and other trades contributing to economic restructuring and employment creation in the region, increasing income for residents.

- Industrial parks and large and medium-sized production projects will mainly be established and implemented in Lào Cai and Mong Cai. Medium and small-scale industries and small-scale industries will be distributed in districts, closely linked to raw material areas and the industrial systems of provinces.

- The State encourages and supports the development of small-scale industries, craft villages, and traditional trades of ethnic minorities; training and introducing new trades to the people along the border to create jobs, increase income, and contribute to poverty reduction.

- Strengthening exploration and evaluation of mineral resource reserves to form a basis for the development of mining industries after 2010.

3. Orientation for Development of Each Province until 2010

a) Dien Bien Province

- For Muong Nhe District, initially develop small-scale industrial facilities for processing bamboo, rattan, and some types of forest products to meet local needs, while also cooperating with central provincial facilities to supply raw materials and certain products to other regions and participate in exports.

- Develop some brick and tile production facilities, mechanical repair services, and hand tool production to meet local needs. Gradually establish industrial zones in the district center and at the Sin Thau National Border Gate to attract investment, and industrial zones in resettlement areas for the Son La Hydropower Project. Develop construction materials production to meet local infrastructure and resettlement needs, focusing on products like building stone, fired bricks, roof tiles, and other materials. Utilize existing potential and adjust crop structures to form specialized raw material areas for the development of agricultural and forestry product processing industries.

b) Lai Chau Province

For the three border districts (Muong Te, Sin Ho, Phong Tho), concentrate on developing small hydropower plants; mining and processing minerals; producing construction materials; processing agricultural and forestry products such as bamboo and rattan products and other forest products; meat and animal feed processing; mechanical repair services, and agricultural tool production to meet local needs. Gradually establish the Muong So industrial cluster in Phong Tho to attract investment in mineral processing, cement, and construction materials production; the Le Loi-Nam Hang industrial cluster in Sin Ho and Muong Te to attract paper, roofing tiles, and small mechanical production.

c) Lao Cai Province

For Lao Cai City and four border districts (Bat Xat, Bac Ha, Bao Thang, Sa Pa), develop mining and processing industries (apatite, copper, iron), export-oriented agricultural and forestry product processing, export processing for Yunnan-China, small and medium hydropower plants to supply electricity for local needs, fertilizer and chemical industries. Continue implementing planning and constructing infrastructure for three industrial parks (Dong Pho Moi, Bac Duong Hai, and Tang Long).

d) Ha Giang Province

For border districts (Vi Xuyen, Hoang Su Phi, Xin Man, Quan Ba, Yen Minh, Dong Van, Meo Vac), concentrate on developing medium and small-scale mining and processing industries; small hydropower plants; small-scale and household agricultural and forestry product processing; developing small-scale industries to create jobs for ethnic minorities. Maintain export processing for China in the Thanh Thuy Border Gate area.

e) Cao Bang Province

Leverage the potential and strengths of border counties (Baobao, Baolam, Haquan, Tongnong, Tralin, Trungkhanh, Phuhoa, Halang, Thachan) to develop industry at a high speed, focusing on mineral processing, agricultural and forestry products, and export-oriented manufacturing. At the same time, pay attention to developing small hydropower plants and cottage industries.

e) Lang Son Province

For border counties (Trangding, Vanlang, Caoloc, Locbinh, Dinhlap), large border gate areas such as Huunghiep, Chimaa, Tanthanh should concentrate on developing industries serving exports, such as manufacturing, assembly, and packaging. In other areas, focus on developing agricultural and forestry product processing industries like cinnamon processing, plantation wood, and bamboo; expand the capacity of coal mining and Na Duong Thermal Power Plant to double by 2010; study the exploitation and processing of bauxite on a large scale for both domestic use and export. Promote the production of construction materials, develop cottage industries, and traditional crafts to provide employment for people in border areas.

g) Quang Ninh Province

For Mong Cai City, concentrate on developing industries processing agricultural and marine products for export to China; manufacturing, packaging products serving imports and exports through the Mong Cai border gate and tourism services. For border counties (Binhlieu, Haiha), mainly develop small-scale industries, household handicrafts to meet local needs.

4. Target for industrial and cottage industry development in border counties along the Vietnam-China border by 2010

Strive to achieve an annual growth rate of industrial value-added production of about 20-21% during the period from 2006 to 2010, and maintain a high level of 15-17% from 2011 to 2020. The industrial value-added production in 2010 should increase threefold compared to 2004, reaching approximately 28 billion VND, accounting for about 8% of the total industrial value-added production of the seven border provinces.

Over the next five years, attract an additional 30-35 thousand workers, bringing the total number of industrial workers in 2010 to around 55-65 thousand people.

By 2010, ensure that 100% of rural households have access to electricity (with 70% using national grid power and 30% using small hydropower and other forms of energy); provide sufficient electricity for industrial production with increasingly high quality.

Develop some industrial zones in border gate areas to attract foreign investment and domestic enterprises producing, manufacturing, and assembling products for export to China and other countries in the region. Form clusters of small-scale processing industries linked to raw material regions.

Border industry along the Vietnam-China border focuses on the following sectors:

a) Mining and mineral processing industry;

b) Agricultural and forestry product processing, food, and cottage industry;

c) Small hydropower;

d) Construction materials production industry;

đ) Chemical and fertilizer industry;

e) Mechanical repair industry.

Growth target for industrial production in border counties of the seven provinces is as follows:

5. Orientation for the development of specialized industrial sectors by 2010

a) Mining and mineral processing industry

- Strengthen investment in geological surveys, evaluation, and classification of ore prospects in the region to achieve necessary reliability for mining and processing activities.

- Mining and mineral processing activities need to combine small-scale operations with industrial-scale operations, with the principle that small-scale operations supply inputs (raw ores or concentrates) for deep processing by industrial-scale operations, minimizing the export of raw ores. For certain types of minerals where domestic resources cannot be processed (both raw and refined) and domestic demand is low, they may be exported to exchange for raw materials such as coke and bituminous coal for domestic steelmaking. Exports must comply with legal regulations.

b) Agricultural and forestry product processing, food, cottage industry, and traditional crafts

- For areas with large border gates and those already forming specialized agricultural and forestry production zones, advanced technology-based medium and large-scale industrial facilities should be established to produce for export. Utilize capital and technology from Chinese enterprises to invest in processing agricultural and forestry products for export to the Chinese market.

- For areas where economic exchanges between Vietnam and China are not well developed, infrastructure is difficult, and there are no large specialized agricultural and forestry zones, develop small-scale processing and preliminary processing facilities based on household and cooperative models, revive and develop traditional crafts, introduce new crafts from southern regions, create conditions for border residents to exploit and utilize local raw materials, produce valuable products for domestic consumption and export, increase income, and improve living standards.

c) Orientation for the development of the power sector

- Maximize the advantage of terrain and hydrological conditions to build small hydropower stations providing local electricity and contributing to stabilizing the regional power grid. For areas where clusters of villages have formed and economic development is evident, if topographical conditions permit, construct hydropower stations with up to 5,000 kW capacity to supply electricity to the area and connect to the grid.

- For remote areas far from village centers, scattered households in mountainous regions where it is impossible to extend the national power grid, solve electricity supply issues through extremely small hydropower clusters or other forms of energy.

On the territory of all border counties, plan to build about 37 small hydropower stations with a total investment of 3,115 billion VND. By 2010, aim to construct 10-13 stations, with the remainder to be built during the period 2011-2020. Total investment for the period 2006-2010 is 1,110 billion VND.

d) Orientation for the development of the construction materials production sector

- Utilize existing natural resources to produce inexpensive building materials to meet local needs and support relocation to border areas.

- Invest deeply and newly to enhance production capacity, utilize technology and equipment ensuring product quality to meet domestic needs and compete with imported goods.

d) Orientation for the development of the chemical and fertilizer industry

- Maintain the production of certain types of fertilizers to serve the needs of border areas. Study and construct new factories for DAP, superphosphate, and NPK in Lào Cai.

- Utilize by-products from agricultural processing facilities to build several factories for producing microbial fertilizers to serve local agricultural production.

- Invest in expanding the production of yellow phosphorus and other phosphorus-based chemicals.

- Study the market to establish several processing facilities for packaging materials to serve the export packaging of goods.

e) Orientation for the development of the mechanical industry

- For remote districts: Invest in production bases for knives, shovels, picks, and small-scale repair services to meet daily needs.

- For towns and markets with national and international border gates such as Lào Cai, Móng Cái, Đồng Đăng (Lạng Sơn), Tà Lùng, Sóc Giang (Cao Bằng) and other border gates, invest in repair facilities for transportation vehicles serving cross-border cargo transport, assembly plants for vehicles and machinery to meet local and nearby provincial needs.

6. Planning for industrial zones, clusters, and points

- Focus on attracting investment to build infrastructure and fill existing industrial zones. From now until 2010, no new industrial zones or clusters will be planned. After 2010, based on actual conditions, expand or plan additional industrial zones and clusters.

- By 2010, along the entire border, there will be four industrial zones: Tằng Loỏng, Đông Phố Mới, Bắc Duyên Hải (Lào Cai), and Hải Yên - Móng Cái (Quảng Ninh) with a total planned area of 700 to 800 hectares, and nine industrial clusters: Mường So Industrial Cluster (Phong Thổ); Lê Lợi - Nậm Hằng Industrial Cluster (Sìn Hồ); Sin Quyền Copper Mine Processing Industrial Cluster (Bát Xát), Cam Đường (Lào Cai); Tòng Bá (Hà Giang); Eastern Region (Cao Bằng); Đồng Đăng (Lạng Sơn); Ninh Dương, Hải Hòa-Móng Cái (Quảng Ninh); each cluster ranging from 2.5 to 30 hectares. Additionally, there will be industrial points linked to mineral extraction and processing facilities, and craft villages.

7. Capital Investment Needs for Industrial Development

During the period from 2006 to 2010, it is estimated that 3,600 to 3,700 billion VND in capital investment will be required. Details as follows:

Unit: billion VND

8. Implementation Measures and Policies for Planning

a) Measures and policies for mobilizing investment capital

Call for and encourage all economic sectors to participate in developing mountainous industrial regions, especially state-owned enterprises. It is expected to mobilize capital from state-owned enterprises: 60 - 65%, from private sector: 10 - 15%, and from foreign investors: 20 - 25%.

State budget funds (including central and local levels) prioritize investment in infrastructure for small industrial clusters in mountainous border districts (excluding Móng Cái town and Lào Cai city) and common infrastructure for the locality.

Through programs and projects for socio-economic development in mountainous regions. The state continues to support reasonably to develop the economy. Programs and projects should be integrated on the same territory and create maximum conditions for farmers and communities to benefit and participate in the planning and implementation process according to the principle of people knowing, discussing, doing, inspecting, and benefiting.

Industrial production and small-scale industrial projects on the border are considered for state investment development credit support according to legal provisions.

Enterprises investing in production of products serving consumption and export in border districts, which attract many local workers, will be supported by provinces with interest rates on loans if the enterprise borrows from financial institutions within the province.

b) Land and infrastructure construction policies

Projects receiving priority allocation into industrial zones and clusters according to provincial planning or investor requirements will enjoy preferential policies on land rent and infrastructure construction support as follows:

Regarding land rent and exemption/reduction of land rent:

- Investments in mountainous border districts (excluding Móng Cái town, Lạng Sơn city, and Lào Cai city), border economic zones, and industrial zones/clusters will be exempted or reduced from land rent and land use fees at the highest level allowed by law applicable in the region.

Regarding infrastructure construction support:

- Projects located within industrial zones and clusters and in towns/cities will have the state invest in infrastructure up to the factory fence such as electricity, water supply, drainage, roads, and communication.

- Projects outside these locations will be partially supported by localities with funding for the above works depending on the local budget capacity.

- Provinces will support costs for clearing obstacles when constructing projects.

c) Financial policies

Projects on the border will enjoy corporate income tax, personal income tax, and withholding tax on profits repatriated abroad according to legal provisions applicable in the region.

Facilitate enterprises to obtain preferential loans with low interest rates or borrow part from the state budget when investing in industrial production projects with a total investment of 50 billion VND or more in border communes.

d) Measures and policies on technology

Encourage scientific research agencies, universities, training schools, individual scientists, and artisans to conduct research and apply new technological advancements in border areas.

Prioritize investment in research, application, and transfer of technological progress in the fields of agricultural and forestry product preservation and processing, mineral extraction and processing. Encourage the private sector to participate in long-term joint investment in science and technology, establishing science and technology enterprises.

The ministries and sectors shall prioritize allocating funds annually to assign research tasks to state research agencies to address technological and equipment issues faced by enterprises in border areas.

The Science and Technology Development Support Fund shall prioritize investment in technological innovation and internet connectivity to provide free information services and support technology transfer for industries in border provinces.

d) Market solutions and policies

Enterprises along the border participating in domestic and international trade fairs will be supported by the provinces with funding for booth rental and other related expenses.

The State shall provide advisory services to facilitate interaction and find foreign partners to develop product consumption markets.

Export-oriented enterprises producing goods for direct export shall benefit from the highest preferential policies under laws governing import and export activities within their jurisdiction.

e) Human resource solutions

Organize free training courses for business owners and management staff of enterprises operating in mountainous provinces on starting businesses and enterprise management pursuant to Decision No. 143/2004/QD-TTg dated August 10, 2004, approving the program to assist in human resource training for small and medium-sized enterprises during the period 2004-2008.

Reduce or exempt school fees for students in border areas and children of ethnic minorities studying at educational institutions (universities, vocational colleges, technical schools, vocational training centers).

Provinces shall be responsible for training labor for investment projects according to the requirements of investors and support part or all of the training costs based on current national standards for vocational training expenses.

If enterprises train their own workforce, they will receive provincial budget support of 50% of the training cost; the maximum amount does not exceed 1,000,000 VND per person. This support applies only to local workers hired for the first time and signed long-term employment contracts.

For cadres from lowland areas who voluntarily work long-term in highland border districts, if they achieve a master's degree, the province will grant them a one-time payment of 10 million VND per person, and those achieving a doctoral degree will receive a one-time payment of 20 million VND per person.

g) Investment development solutions for raw material regions

Localities shall implement detailed planning for developing raw material regions linked to processing plants. Enterprises investing in raw material regions according to the plan will be exempted from land rental fees. Encourage residents in localities to plant industrial crops suitable for planned raw material regions.

Implement effectively Decision No. 80/2002/QD-TTg dated June 24, 2002, of the Prime Minister regarding policies to encourage the consumption of agricultural products through contracts.

Agricultural Extension Centers in border provinces shall give special priority to border areas in supplying quality seeds and livestock breeds at reasonable prices and providing guidance and transferring techniques to farmers to develop raw material regions serving processing industries.

h) Environmental protection solutions

For mineral extraction and processing activities: permits shall only be issued when there are specific designs and environmental protection measures, including post-extraction land reclamation (including small-scale operations).

For agricultural and forestry product processing activities, especially small-scale paper production projects, wastewater treatment systems must be in place before investment approval can be granted.

For fertilizer and chemical factories, particular attention must be paid to waste disposal issues in project content from the investment phase to operation.

For facilities causing pollution, a remediation plan and measures must be implemented. The State shall support part of the funding and assign research institutes under relevant ministries and sectors to transfer technology and technical solutions for handling.

i) Strengthening promotion of industry

Industrial Promotion Centers in border provinces shall offer maximum incentives to border district counties for training new skills and supporting small and medium-sized enterprises investing in the area according to Decree No. 134/2004/NĐ-CP dated June 9, 2004, on Encouraging Rural Industry Development.

Article 2. Implementation

1. Ministry of Industry

a) Announce the plan; take the lead and coordinate with relevant ministries, sectors, and localities to implement this plan after approval.

b) Allocate the maximum possible national industrial promotion funds to border provinces to promote the development of industry and handicrafts.

c) Study and propose mechanisms linking the research tasks of institutes and schools under the Ministry with resolving technological and equipment issues faced by small and medium-sized enterprises and craft villages in border areas.

2. Ministry of Finance

Take the lead in coordinating with the Ministry of Planning and Investment, the Ministry of Industry, and border provinces to study and build stable long-term financial, credit, and tax incentive mechanisms to attract investment in border industrial and small-scale industrial development.

3. Ministry of Commerce

Lead in building mechanisms and policies to support trade promotion for border areas, seeking markets for small-scale industrial products, particularly the Chinese market. Coordinate with China to organize trade fairs to introduce border region industrial and small-scale industrial products, promoting bilateral trade exchanges.

4. The Ministry of Agriculture and Rural Development

Lead in formulating mechanisms and policies to develop raw material regions serving the processing of agricultural and forestry products in border areas.

5. Ministry of Science and Technology

Study and propose solutions to encourage technology transfer and the application of new scientific and technological advancements in border regions.

6. Ministry of Transport

Study integrating border ring road construction projects with the development of industrial zones and clusters in the region.

7. People's Committees of the Seven Northern Border Provinces

a) Lead in formulating appropriate incentive mechanisms and policies in accordance with legal provisions on land leasing, land use, and support for land clearance... to attract investment in border industrial and small-scale industrial development.

b) Organize free training courses for entrepreneurs and business managers; establish programs and systems to support small and medium-sized enterprises along the border in terms of technology management and the application of advanced techniques in production;

c) Direct the promotion of crafts work within the jurisdiction;

d) Coordinate with the Ministry of Industry to manage the implementation of this plan after it has been approved;

8. State-owned Groups and Corporations

a) Vietnam Electricity Corporation shall proactively collaborate with localities to develop plans for the development of medium and small hydropower projects and power supply plans for the border area in accordance with set objectives;

b) Vietnam Tobacco Corporation and Vietnam Paper Corporation shall study and collaborate with provinces through various programs (such as poverty alleviation, afforestation...) to expand raw material cultivation areas along the border to provide employment for border residents and serve the production needs of the corporations;

c) Vietnam Steel Corporation and Vietnam Coal-Mineral Industries Group shall prioritize the implementation of mining and processing projects for iron ore, lead-zinc and other minerals along the border according to the planning;

d) Vietnam Chemical Corporation shall cooperate with localities and related units to research and build fertilizer, chemical production and packaging processing projects along the border;

đ) Hanoi Beer-Wine-Beverage Corporation shall cooperate with localities to study the development of beer raw material production areas in certain regions with suitable conditions; assist border localities with traditional liquor production industries to establish and develop brands for these liquors;

Article 3. The Standard Measurement Quality Control Department shall be responsible for organizing and guiding the implementation of the Regulations adopted herein.

Article 4. The Director of the Ministry's Office, the Inspector General of the Ministry, Heads of Departments and Directors of Bureaus under the Ministry, the Director of the Institute for Industrial Strategy and Policy Research, Vietnam Coal-Mineral Industries Group, Vietnam Electricity Corporation, Vietnam Tobacco Corporation, Vietnam Paper Corporation, Vietnam Steel Corporation, Vietnam Chemical Corporation, Hanoi Beer-Wine-Beverage Corporation and relevant organizations and individuals are responsible for implementing this Decision./.