Seminar Marks 40 Years of Doi Moi with Call for Private Sector Reform

Why It Matters

Accelerating private‑sector consolidation and deeper tech integration are crucial for Vietnam to sustain growth, attract foreign investment, and move up the global value chain. The upcoming Politburo proposal could unlock policy tools that address fragmentation and boost competitiveness.

Key Takeaways

• Private sector accounts for ~50% of Vietnam's GDP but remains fragmented
• State proposal to overhaul development model slated for June/July Politburo plenum
• VinFast’s EV localisation at 60% in 2025, aiming 80% by 2026
• Bank credit hit $740 bn, 144% of GDP; SMEs hold 48% of loans
• 97% of private firms are SMEs, limiting innovation and global value‑chain depth

Pulse Analysis

Vietnam’s four‑decade doi moi journey has produced a vibrant, albeit uneven, private sector that now drives about half of the nation’s output. The upcoming policy package, set for the third Central Committee plenum, seeks to cement a science‑tech and digital‑first development model. By formalising mechanisms that commission private firms for strategic national projects, the government hopes to reduce fragmentation among the more than one million registered enterprises and channel the sector’s considerable labor force into higher‑value activities.

Banking data underscores the economy’s rapid credit expansion, with outstanding loans reaching roughly $740 billion—equivalent to 144% of GDP—by the end of 2025. While state‑owned groups dominate large‑scale financing, small and medium‑sized enterprises now absorb nearly half of total credit, reflecting broader financial inclusion. Simultaneously, banks are accelerating digital payment platforms, which improve access for SMEs and support the broader digital transformation agenda.

Corporate champions such as VinFast illustrate how private conglomerates can spearhead industrial upgrading. The electric‑vehicle maker’s localisation rate climbed to 60% in 2025 and targets 80% once domestic battery cells come online in 2026, reshaping supply‑chain dynamics and raising standards for local suppliers. This model, if replicated across manufacturing and technology sectors, could deepen Vietnam’s participation in global value chains, boost productivity, and attract further foreign investment. The success of these reforms will hinge on governance reforms, transparent ownership structures, and sustained policy support for scaling SMEs into globally competitive firms.