Actually, this position initially belonged to Sai Gon (old name of HCM City) because France had no choice. France first conquered The South and at that time, The North still got king as well as goverments and it was so-called “under the protection of French Empire”. read more
Moreover, Hanoi is in the North so they also had more chance to widen the French-Indochina up north to China’s teritory. Interesting fact: French also considered to choose Dalat (Đà Lạt) to be the capital before Hanoi because the environment there was exactly like French weather because of its high altitude. read more
French Indochina was designated as a colonie d'exploitation (colony of economic exploitation) by the French government. Funding for the colonial government came by means of taxes on locals and the French government established a near monopoly on the trade of opium, salt and rice alcohol. read more