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[Research Contribution] Solutions to Promote the Role of the Private Sector in the Socioeconomic Development of Ho Chi Minh City with a Vision to 2045

6 October, 2025

Keywords: private economy, socioeconomic development of Ho Chi Minh City

In 2025, the merger with Binh Duong and Ba Ria – Vung Tau not only helps the City expand its space but also increases resources for economic development. Against this backdrop, the City urgently needs a vision for planning and new breakthrough economic development drivers. One of the crucial drivers for achieving breakthrough economic development is promoting the role of the private economic sector – an urgent requirement intrinsically linked to the effective implementation of Resolution No. 68-NQ/TW dated May 4, 2025, by the Politburo on private economic development.

The Resolution affirms: “In the socialist-oriented market economy, the private economy is one of the most important drivers of the national economy”. On this foundation, Ho Chi Minh City, upon merging with Binh Duong and Ba Ria – Vung Tau, will have conditions to form a super urban area integrating industry, finance, seaports, and innovation. In this development structure, the private economy is not only the main production force but also the decisive factor in the competitiveness of the entire key southern economic region.

The Role of the Private Economy in City Economic Development

Over 40 years of integration and renovation, HCMC has always maintained its role as an economic locomotive, serving as the largest financial, commercial, service, and science-technology center in Vietnam. Contributing nearly 23% of the national GDP, over 27% of national budget revenue, and being a leading locality in attracting FDI, HCMC not only affirms its role as an economic center but also shapes new development trends for Vietnam (Ngoc Le, 2025).

Ho Chi Minh City currently has nearly 400,000 operating enterprises, of which private enterprises account for over 300,000, contributing 51% of GRDP, over 30% of state budget, and creating employment for more than 40 million workers, accounting for 82% of the labor force.

Binh Duong has over 65,000 enterprises and is the leading locality nationwide in terms of industrialization and urbanization, with nearly 80% of GRDP coming from the private sector.

Ba Ria – Vung Tau has a small population but possesses nearly 17,000 enterprises, accounting for over 60% of GRDP, particularly in seaports, logistics, and petroleum services.

In total, the three localities gather nearly 400,000 private enterprises (equivalent to 45% nationwide), creating millions of jobs and contributing nearly 50% of the entire southern region’s industrial production value (General Statistics Office, 2024).

For HCMC alone, in 2024, approximately 52,500 newly established enterprises with registered capital of 400,000 billion dong; supplementary registered capital of approximately 340,000 billion dong. In total, the registered and supplementary capital for 2024 reached approximately 740,000 billion dong. Regarding FDI, in 2024 the City attracted 4.85 billion USD (Thanh Thuy, 2024).

HCMC is standing before a golden opportunity to transform into a center for private enterprises not only in Vietnam but also in Southeast Asia

With the additional merger of Ba Ria – Vung Tau and Binh Duong, Ho Chi Minh City has more resources and advantages to rise. Ho Chi Minh City is the “coordinating brain” of the region – where strategies are formulated, innovation is led, and high-quality services are provided: financial centers, banking, logistics services, commerce, high technology, and innovation. It possesses high-quality human resources, leading universities, and research institutes. Binh Duong is the “manufacturing center” – supplying goods and semi-finished products for export and for HCMC’s service sector; closely linked with seaports and regional consumption, with the advantage of being one of Vietnam’s leading FDI-attracting localities. It has a modern industrial park system and developed logistics infrastructure. The government is dynamic, with good administrative reform and a transparent investment environment. Ba Ria – Vung Tau is the “international logistics gateway” – connecting the import-export goods of the entire region, simultaneously providing energy and industrial support services. It possesses the Cai Mep – Thi Vai deep-water port system, capable of receiving large-tonnage vessels and international transshipment. It is a petroleum industry center, electric power, and maritime services. It has great potential for coastal tourism and coastal urban development.

HCMC’s economic growth in 2024 and objectives for 2025. Nevertheless, the private economic sector is encountering several difficulties and challenges, with many resources not being exploited effectively. These difficulties and challenges are hindering the private economic sector from playing its key and core role alongside the state economy and collective economy in building an independent, self-reliant, self-sufficient economy linked with deep, substantive, and effective international integration.

Difficulties and Challenges in Promoting the Key Role of the Private Economy

First, the private economy has not fully developed its inherent capacity. The majority of small and medium enterprises are established and managed in a family-style manner, spontaneously, lacking much knowledge and management skills, lacking strategy, lacking management and operational tools, so they have not connected and optimally utilized social resources and market opportunities. Some successful enterprises rely on relationships with officials who formulate and implement policies. Some enterprises fail because they refuse to invest in technology, invest in developing human capital, social capital, and intellectual capital, so they cannot predict the challenges and threats to their enterprises from changes in the business environment. The mentality of resisting change is causing many enterprises to become increasingly stagnant, with exhausted capital.

Second, investment in technology and techniques in the private economic sector remains limited; due to lack of capital, some enterprises are reluctant to invest, leading to low production levels, techniques, and labor productivity, high product costs, and difficulty competing. The level of investment in machinery, equipment, technology assets, and fixed assets per capita for private enterprises remains low.

Third, credit access for private sector enterprises remains very difficult. Many reports also indicate that the biggest difficulty is credit access. Specifically, in 2022, credit access became the biggest concern for 55.6% of enterprises, continuously increasing from 34.8% in 2019, 40.7% in 2020, and 46.9% in 2021, but by 2022, this ratio dropped to only 17.8% (Vu Khue, 2023).

Fourth, in 2025, according to experts, although private economic development policies have been issued simultaneously and quickly, practical implementation still faces many obstacles. Administrative procedures are complex and prolonged, wasting time and costs for enterprises. Additionally, there are difficulties in accessing land and credit, especially at the local level. Policies are also not consistent in application, leading to different interpretations and applications of laws by different agencies. The regulatory sandbox framework is still new and lacks specific implementation guidance, making it difficult for innovative startup enterprises to access. According to Mr. Tran Thanh Trong – General Director of Sang Ban Mai Joint Stock Company, Vice Chairman of the Binh Duong Provincial Business Association – emphasized that the biggest problem currently is not just regulations but the fear of responsibility among implementing officials. He also particularly emphasized task No. 8 in Resolution 68 – on building culture for the business community: “Enterprises themselves must also change, comply with laws, be transparent, and jointly create a responsible business ecosystem. Institutional reform is two-way – both the State and enterprises must act”.

Solutions to Promote the Role of the Private Economy in the Socioeconomic Development of HCMC with a Vision to 2045

First, the city government must urgently and decisively concretize Resolutions such as: National Assembly Resolution No. 198/2025/QH15 on some specific mechanisms and policies for private economic development; Government Resolution No. 138/NQ-CP: Issuing the Government’s Action Plan to implement Politburo Resolution No. 68-NQ/TW dated May 4, 2025, on private economic development, through specific action programs, to promote the existing advantages of the locality; exploit and optimally use social resources; take advantage of all opportunities from the business environment.

Second, the city government needs to promote public investment, simultaneously deploy many large infrastructure projects such as roads and infrastructure. Create an environment and conditions for private enterprises and FDI enterprises to participate in those projects, to exploit and optimally use social resources for infrastructure development. Because infrastructure development is a condition for economic development, attracting investment in production, tourism, services, education, and finance.

Third, support the private economy in improving scientific and technological levels for personnel, promoting cooperation and technology transfer, closely linked with training to improve human resource quality, to effectively exploit the achievements of science and technology, especially digital technology, helping save production costs, reduce costs, and improve competitiveness.

Fourth, prioritize solving short-term issues affecting the private economy such as removing credit constraints, land, and tax policies.

Fifth, the city government needs policies to support building many startup ecosystems, supporting newly established enterprises with specific policies.

For the private economy to truly play its role as a core economic component and driver of Ho Chi Minh City’s economy, in addition to building specific policies for the resolutions, monitoring the practical implementation of specific solutions by the city government is very important.

This article belongs to the proceedings of the scientific conference “Vision for Planning and Economic Development Drivers for the New Ho Chi Minh City” organized by the University of Economics Ho Chi Minh City. View the complete article Some Solutions to Promote the Role of the Private Economy in the Socioeconomic Development of Ho Chi Minh City with a Vision to 2045 HERE.

Author: Lecturer Le Van Phong – Ho Chi Minh City Open University

This article is part of the Research Dissemination and Applied Knowledge Series from UEH with the message “Research Contribution For All”. UEH respectfully invites readers to watch the next UEH Research Insights newsletter.

News, photos: Author, UEH Department of Communications and Partnerships