Tran Luu Quang, Party Secretary of Ho Chi Minh City, has pledged that the city will achieve double-digit growth. Yet the next phase of expansion for this megacity will need to be driven by productivity, alongside a range of reinforcing factors.

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Perspective rendering of the Central Square and Administrative Center complex in Ho Chi Minh City, launched on April 29. Photo: Investor.

The meeting room at the Ho Chi Minh City People’s Committee headquarters remained lit on the morning of Saturday, April 18. Inside, members of the city’s People’s Council engaged in intense discussions to ensure that key decisions could be approved without delay.

Among the most significant issues raised and widely agreed upon was the necessity of implementing the Central Square and Administrative Center project for Ho Chi Minh City, with a total investment of nearly VND30,000 billion (US$1.2 billion).

The project comes at a time when, following administrative restructuring, Ho Chi Minh City has a population of nearly 14 million people across 168 commune-level units. The scale of its administrative apparatus has also expanded, with more than 8,000 officials and civil servants working across multiple dispersed offices.

“Today is a day off, yet the People’s Council convened to provide the legal basis for the People’s Committee to implement priority projects,” Tran Thanh Trong, Chairman of the Board at Sang Ban Mai JSC and a member of the city’s People’s Council, told reporters after the meeting.

From a business perspective, he noted a strong sense of political determination among the city’s new leadership to drive development. Implementation efforts are accelerating and showing positive results.

Just 11 days after that meeting, on April 29, the Central Square and Administrative Center project was officially launched.

Pursuing 10% growth

Such decisiveness sends a clear message for an action-oriented term. As Vietnam’s economic engine, Ho Chi Minh City is entering a phase of acceleration, determined to remove all bottlenecks and achieve growth exceeding 10%.

Early indicators are already emerging. According to newly released statistics, the city’s gross regional domestic product (GRDP) in the first quarter grew by an estimated 8.27% year-on-year. Excluding oil and gas, the figure reached 8.58% - the highest first-quarter growth in more than five years. This positive momentum is expected to support further expansion in the remaining quarters of the year.

Perhaps the most notable highlight lies in business confidence. During this period, more than 13,600 new enterprises were established, up 46.7% in number, with registered capital reaching nearly VND91,400 billion (US$3.7 billion), an increase of 46.6%.

Significantly, Ho Chi Minh City continues to attract strong foreign direct investment inflows, with nearly US$2.9 billion recorded - a surge of 219.7% compared to the same period last year.

From the perspective of international investors, Seck Yee Chung, Vice President of the Singapore Chamber of Commerce in Vietnam, previously noted that these impressive economic indicators reflect the city’s sustained efforts to improve the business environment through supportive policies, administrative reforms and infrastructure development.

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Ho Chi Minh City is often at the forefront of policy experimentation. Photo: Nguyen Hue.

Singaporean businesses have also praised the city’s efforts to remove barriers, mobilize resources and drive breakthroughs in key projects.

From an academic standpoint, Associate Professor Burkhard Schrage, Deputy Head of the Management Department at RMIT University Vietnam, identified three core factors sustaining Ho Chi Minh City’s leading role: openness, economic density and a strong capacity for experimentation.

Notably, the city has often led the way in piloting new policies. It has repeatedly pioneered fresh approaches to investment, urban development, infrastructure, administrative reform and private sector growth.

A clear example is the development of export-oriented industrial and high-tech zones. These areas not only attract manufacturing but also introduce higher standards in production, management, supplier relations and workforce development. Over time, they have helped Vietnamese enterprises integrate into more demanding value chains.

Shifting from scale to quality

Following its expansion, Ho Chi Minh City’s economy now accounts for approximately 23.1% of the national total. Each 1% of growth generates more than VND18,400 billion (US$740 million), a figure comparable to or exceeding the GRDP of several provinces after restructuring. As such, every percentage point of growth in the city makes a substantial contribution to national GDP.

Regarding growth targets, during a recent working session with General Secretary and State President To Lam, Tran Luu Quang reaffirmed the commitment that the city will achieve double-digit growth.

Building on a budget revenue base of around VND800,000 billion (US$32.8 billion) in 2025, the city aims to reach VND1 quadrillion (US$41 billion) in 2026. Notably, Quang emphasized that this revenue will not rely solely on land, but will be accumulated from diversified sources to ensure sustainability.

“The next phase of growth cannot rely on scale alone. Ho Chi Minh City must transition from expansion-based growth to productivity-driven growth,” Burkhard Schrage added.

This transition requires improved infrastructure, more efficient logistics, stronger public transportation, advanced digital systems, a transparent and predictable administrative framework, and better coordination among localities. Businesses need to perceive the broader Ho Chi Minh City region as a unified economic space rather than fragmented administrative zones.

At the same time, collaboration with universities will play a critical role. The city’s future competitiveness will depend on effective connections between businesses, academic institutions, research centers and government. Universities are no longer just training grounds but active partners in strengthening the city’s innovation ecosystem.

Additionally, the city must be selective in attracting investment, prioritizing FDI that brings technology, management capabilities, supply chain upgrades, higher environmental standards and high-value employment. In parallel, local enterprises need support to enhance productivity and compete globally.

Finally, quality of life remains a strategic factor. As Burkhard Schrage noted, talent may come for job opportunities, but they stay for efficient transport, housing, education, healthcare, public spaces and a livable environment.

“If Ho Chi Minh City can combine economic scale with high-quality human resources, innovation, infrastructure, strong university-business linkages and quality of life, it can lead Vietnam’s next phase of growth toward higher value and deeper global integration,” he said.

Tran Chung