Shenzhen will invest US$200 million to establish an economic trade zone in Vietnam, according to an agreement signed in Hanoi on Tuesday.

The economic trade zone, located in Yen Hung district, Quang Ninh province, 125 kilometers from the capital Hanoi, will include 2.2 million square meters of factory space, 400,000 square meters of warehousing and 100,000 square meters of office buildings for management, research and public services, when the first phase of the park is finished in 2015.

The investor Shenzhen-Vietnam Joint Investment Co. has been jointly registered by 10 Shenzhen companies, including China National Aviation Holding Co., China Shenzhen International Cooperation Group and Neptunus.

According to the agreement, the park will introduce 170 enterprises, mostly from Shenzhen and Guangdong Province, and generate 25 billion yuan of output value (US$3.6 billion) when it is up and running.

It will serve as a platform for Shenzhen enterprises, particulalry in the clothing and electronics industries to expand in the global market using cheaper labor, preferential policies and incentives offered by the country and its government.

The agreement was one of three deals signed betweem Shenzhen and Vietnam on the sidelines of the Vietnam-Guangdong Economic and Trade Seminar held in Hanoi on Tuesday. According to the other two agreements, Shenzhen Sanyo Laser Electronic Co., Ltd. and Shenzhen Dawei Group, a power cable manufacturer, will invest US$38 million to jointly expand the electronics market and build hydro-electric power plants in Vietnam.

Also at the seminar, Guangdong??s delegation signed 22 projects worth nearly US$1.6 billion. Most of the projects involve electricity, electronics, construction and food processing.

Wang Yang, Guangdong Party chief, said Guangdong would support Vietnamese businesses to invest in processing, transport and telecoms. The province would increase imports from Vietnam and help promote tourism to Vietnam among Guangdong residents.

According to the Guangdong Economic and Trade Cooperation Department, trade turnover between Guangdong and Vietnam reached US$2.45 billion in 2007, an increase of 53 percent over 2006 and nearly one sixth of the total two-way trade between the two countries.

Deputy Prime Minister and Foreign Minister Pham Gia Khiem, attending the forum, urged businesses from the two sides to help seek the most suitable methods to boost cooperation between Guangdong and Vietnam .

Editor: Yan