Article 1: Ho Chi Minh City’s Economy: Driving Growth Through Transformation

Leading the Economy with Steady Growth

Ho Chi Minh City continues to affirm its leadership position in Vietnam’s economy. The 2024 annual report highlights a Gross Regional Domestic Product (GRDP) of VND 1,178 trillion (based on 2010 prices), marking a 7.17% growth compared to the previous year. Although not yet fully back to pre-pandemic trends, this stable growth reflects the City’s remarkable efforts in overcoming internal challenges and global economic volatility.

The service sector remains the "flagship" of the City’s economy, accounting for 65.7% of GRDP and achieving a growth rate of 7.7% over the past year. This sector has demonstrated resilience against adverse fluctuations, with wholesale and retail trade, transportation and logistics, banking and finance, and information technology rebounding robustly, supported by domestic consumption and the return of international tourists.

Meanwhile, the industrial and construction sectors face ongoing challenges. The industrial sector grew by 7.26%, a modest figure given the City’s potential, while the construction industry, heavily impacted by the pandemic, is restructuring to align with new development demands and trends.

Transitioning the Growth Model

Amidst a global shift towards green and high-tech economies, Ho Chi Minh City is aligning with this trend. The City has identified transitioning from labor-intensive practices to high-tech and environmentally friendly growth as a strategic direction. This approach not only improves growth quality but also enhances the City’s competitiveness in the international market.

However, challenges remain. One of the most pressing barriers is the shortage of high-quality human resources. The proportion of trained workers in Ho Chi Minh City has not significantly improved post-pandemic, despite this being a critical factor for implementing advanced production technologies. Additionally, high production and living costs reduce the City’s attractiveness to domestic and foreign investors, posing difficulties in maintaining stable capital flows for technological innovation projects.

Moving Towards a Sustainable Economy

To successfully transition its growth model, Ho Chi Minh City must implement comprehensive strategies and solutions to fully exploit its potential while overcoming existing barriers.

Regional Connectivity: Strengthening regional integration is a critical strategy, particularly as labor-intensive industries trend towards relocating to neighboring provinces. Ho Chi Minh City must play a central role in building regional production and service supply chains, leveraging its technological, infrastructural, and human resource advantages to support surrounding provinces. This not only alleviates pressure on the City but also drives collective growth for the Southern region.

Attracting Investment: The City needs to create more favorable conditions for investment, particularly in high-tech and eco-friendly sectors. This requires robust administrative reforms, enhanced transparency, and an improved business environment. Additionally, policies supporting technological innovation, production process upgrades, and labor productivity optimization are essential.

Education and Training: Investing in education and training must be prioritized to meet the high-quality workforce demands of the transforming economy. Developing training programs aligned with new technology trends and collaborating with domestic and international businesses to tailor training to market needs are necessary steps.

Conclusion

Ho Chi Minh City is entering a new phase of development, filled with opportunities but also significant challenges. Transitioning the growth model is an inevitable trend to enable the City to not only recover swiftly but also emerge stronger in the global competition. The success of this process hinges on effective policy coordination, synchronized investment in infrastructure, and improvements in workforce quality.

With strategic, well-directed efforts, Ho Chi Minh City has the potential to become a model of sustainable development, elevating Vietnam’s economic position on the global stage. The City is poised not only to retain its role as the country’s economic locomotive but also to lead the nation into a new era of progress and prosperity.