Phu Tho at a Turning Point for High-Quality FDI

When investment flows are no longer just about quantity but have become a test of a local economy’s capacity for selection and absorption, the government and functional agencies cannot remain bystanders.

In an increasingly competitive landscape, attracting a large number of projects is no longer the sole measure of success. What matters more is the quality of the capital, its spillover potential, and its substantive contribution to growth. For Phu Tho, the current period marks a distinct shift—from a “red carpet” mindset to a selective approach, targeting next-generation FDI.

Phu Tho has solidified its position as one of the largest automotive and motorcycle manufacturing hubs in the country, hosting global brands such as Honda, Toyota, and Piaggio.

In recent years, the province has achieved remarkable results in attracting foreign investment, establishing itself as a major industrial center of the Northern Midland and Mountainous region. Prominent global corporations operating here include Honda, Toyota, Piaggio, BHFlex, Partron Vina, and Interflex Vina.

Currently, the province hosts approximately 735 active FDI projects with a total registered capital of over $13.2 billion from 27 countries and territories. Notably, in the first four months of 2026, the province attracted over $1.2 billion in FDI, reaching 75% of the annual plan—a multi-fold increase compared to the same period last year.

However, behind these growth figures lies a strategic change in approach. If the previous priority was simply filling industrial zones (IZs), the current requirements are much higher. Phu Tho is shifting from “broad” attraction to “deep” selection, prioritizing projects with high technology content, high added value, environmental friendliness, and strong links with domestic enterprises.

According to Mr. Le Van Loc, Deputy Director of the Phu Tho Department of Finance, the global supply chain shift is opening vast opportunities for midland provinces. However, opportunities only become momentum when coupled with absorptive capacity. This requires the province to prepare not just land and infrastructure, but also to enhance the quality of human resources and substantively improve the business environment.

FDI projects are no longer concentrated solely in urban areas but are also shifting toward rural and mountainous regions. This trend not only ensures social balance but also plays a vital role in creating jobs for local laborers (Photo taken at Lap Thach Footwear Company, Lap Thach Commune).

Analyzing the issue in greater depth, Mr. Hoang Long Bien, Head of the Provincial Industrial Zones Management Board, noted that although foreign investment attraction in the province has seen positive improvements, several bottlenecks persist in reality. The infrastructure within industrial zones lacks true synchronicity, particularly regarding logistics systems and support services. There is also a shortage of high-quality human resources, which fails to meet the requirements of high-tech projects. Furthermore, the linkages between FDI enterprises and domestic firms remain limited, preventing a clear and significant spillover effect.

Furthermore, the investor structure is evolving. Asian partners, particularly from China, continue to hold a large share. This provides rapid capital flows but necessitates rigorous screening to avoid low-tech, energy-intensive, and environmentally damaging projects.

FDI projects in Phu Tho are no longer concentrated solely in urban areas but are shifting toward rural and mountainous regions. This ensures social balance while creating vital employment opportunities for local laborers.

This transition is closely tied to the goal of restructuring the local economy. As industry moves from simple assembly to smart manufacturing, and as IZs transform into production ecosystems, the requirements for planning, infrastructure, and governance must evolve accordingly.

Mr. Dao Van Hung, Deputy Director of VPIC1 Co., Ltd. (a 100% foreign-invested enterprise in Khai Quang IZ), shared: "In the long run, choosing high-quality FDI not only boosts labor productivity but also creates a foundation for innovation and sustainable development. To achieve this, the province needs more than just commitments—it needs specific actions in administrative reform and substantive partnership with businesses."

In the race for investment, advantages no longer lie solely in geography or costs; they increasingly depend on the quality of governance and the prestige of the local government.

As FDI enters a new cycle of movement, Phu Tho stands before a rare opportunity to break through. However, that opportunity will only be realized if the province has the courage to select and the capacity to absorb. The final answer will not be found in the number of licenses issued, but in the tangible value these projects bring to the economy and the lives of the people.

Quang Nam