Ho Chi Minh City Development: From Metropolis to 'Development Epicenter'

In order for Ho Chi Minh City to become a 'development epicenter', there needs to be a strong shift in management thinking, improved competitiveness, building an elite public authority apparatus... and many other things.

Ho Chi Minh City is facing many great opportunities after merging with other provinces - Photo: TTO

The year 2025 marks a special step forward for Vietnam in the innovation process; not only demonstrating the mindset and determination to turn the country into a developed nation by 2045, but also laying important foundations for Vietnam to be able to make this extraordinary step forward in the next 2 decades.

In this turning point, with a much larger scale and advantages after merging with Binh Duong and Ba Ria - Vung Tau from July 1, 2025, Ho Chi Minh City (new) has become a megacity with an area of ​​nearly 7,000 km2, 14 million people, RGDP over 100 billion USD, accounting for nearly 1/4 of the country's GDP, and an average income per capita of about 7,500 USD.

With its overall scale, strategic location, pioneering role and great contributions to the country's success over the past four decades of innovation, Ho Chi Minh City carries great expectations from the people of the whole country and the international community for a new stature in the next two decades.

The city is not only considered a megacity in terms of scale, but also has the potential to become the "development epicenter" of Vietnam and Southeast Asia. However, to achieve that status, Ho Chi Minh City not only needs extraordinary efforts, but also the ability to make great strides in vision and development thinking.

In practice, large scale is not a sufficient condition for a miraculous development, because many megacities in the world have not overcome this harsh requirement.

In fact, its massive scale has become an obstacle, reinforcing the “middle-income trap” – reflected in stagnant labor productivity, traffic congestion, river and air pollution, flooding during heavy rains, and the fact that millions of people have to live in poor housing conditions. This situation has long been present in many megacities such as Manila (Philippines), Jakarta (Indonesia), Mexico City (Mexico) and São Paulo (Brazil).

Experience from Shanghai

To become a "development epicenter", Ho Chi Minh City can learn from the successful experiences of Chinese megacities, especially Shanghai.

Shanghai's development path from 2000 to present can provide many valuable lessons for Ho Chi Minh City for two major reasons.

Firstly, in 2000, Shanghai was quite similar in size to Ho Chi Minh City today: population of about 16 million people, GDP of approximately 100 billion USD, per capita income of over 7,000 USD (2024 price), and held a central position in finance - international trade.

Second, being identified as the "development epicenter" of the country has helped Shanghai not only grow rapidly but also create a strong influence, pulling the whole region onto a new development trajectory, based on modern governance, science - technology - innovation, and value resonance.

Thanks to this role, Shanghai has risen to the stature of a developed economy, with a per capita income of over 26,000 USD - far exceeding many OECD countries.

Lujiazui Financial District in Shanghai's Pudong - Photo: CGTN

Shanghai's role as the "development epicenter" over the past two decades is clearly demonstrated in four aspects:

First, pioneering institutional reform and improving governance . Shanghai was the first locality chosen by China to pilot a Free Trade Zone (2013). This success paved the way for the expansion of more than 20 other Free Trade Zones, creating a profound impact on the process of improving the Chinese economy.

Second, it excels as an international financial and trading center . Shanghai is now one of the top five global financial centers; it has the world's busiest port; and its airport is among the top 10 busiest international airports.

Third, become a global technology, innovation and R&D center . With R&D spending equivalent to 4% of GDP, focusing on strategic areas such as semiconductors, AI and biotechnology, Shanghai has built its position as an Asian "Silicon Valley", attracting more than 400 of the world's leading corporations to set up R&D centers. It is also the nucleus for cutting-edge technology industries, from semiconductors, AI, biotechnology, fintech, to electric vehicles - notably Tesla's Gigafactory with an output of nearly 1 million vehicles/year.

Fourth, regional development spillover . Shanghai has become a "locomotive" for neighboring localities. During the period 2000 - 2020, the GDP of Anhui, Jiangsu and Zhejiang increased 12 times, 9 times and 8 times respectively - 6 times higher than the rate of Shanghai (from 100 billion USD to nearly 600 billion USD).

As the per capita income of the core reaches a high level, the rate of natural growth slows down; but this slowdown creates opportunities for resonance, helping the surrounding area grow faster - thereby further strengthening the power of the "development epicenter".

As a result, the entire Yangtze River region, with Shanghai as its backbone, has grown faster than the national average and raised its share of China's GDP from 20% in 2000 to 24% in 2020 (estimated based on China Yearbook statistics).

The role of "development epicenter" is often associated with 7 outstanding characteristics.

- Global appeal: leading destination for finance, investment and premium services.

- International gateway: important trading center, connecting the country with the world economy.

- Reform vanguard: a place to test policies and institutional innovations before replicating them nationwide.

- Center for knowledge, education, research-development, innovation, and attracting and converging global talent.

- Development spillover hub: financial core, technology and management experience, spreading through supply chains, technology transfer, and forming regional economic clusters.

- Stable citadel: the fulcrum that helps the economy maintain high resilience to global crises and fluctuations.

- National symbol: embodiment of national aspirations and the economic breakthrough capacity in the international arena.

Things Ho Chi Minh City needs to do immediately

If it can exploit Shanghai's experience, especially in promoting its role as the "development epicenter" of the country and Southeast Asia, Ho Chi Minh City has full potential to create remarkable breakthroughs in the next two decades.

A possible scenario, based on the Shanghai experience, is that the city will achieve very high growth rates in the period 2026-2035, with GDP increasing by an average of 10% per year, population increasing by 3% per year, and per capita income increasing by about 7% per year.

In the 2036-2045 period, the pace may slow down but remains impressive: GDP increases by 6% per year, population increases by 1% per year, and per capita income increases by 5% per year.

According to this scenario, by 2045, Ho Chi Minh City will have about 20 million people, GDP of approximately 530 billion USD (2024 price), and average income per capita of 25,000 USD.

The city’s share of the country’s GDP depends on the national growth rate. If Vietnam grows at an average of 8% per year, its share will be around 24% (compared to 25% now). If the country grows at only 6.5% per year, the city’s share will jump to 32%.

In all scenarios, Ho Chi Minh City still plays a key role in the economy and is the "development epicenter" of the country.

Professor Vu Minh Khuong is currently teaching at the Lee Kuan Yew School of Public Policy, National University of Singapore - Photo: VGP

The big question is: What urgent priorities does Ho Chi Minh City need to immediately implement to turn this scenario into reality, thereby contributing to arousing the boundless strength of the nation in the era of rising up?

From years of empirical research and surveys, we believe that the city needs to pay attention to the following five fundamental orientations:

Firstly, affirming the role of the "development epicenter" of the entire Southeast region, the Mekong Delta, and the whole country; thereby building a growth strategy based on a higher trajectory, led by institutional and governance reforms, exploiting regional resonance, promoting innovation, R&D and integrating global technology.

The establishment of a Free Trade Zone (FTA) will be a strategic breakthrough. Unlike a Special Economic Zone (SEZ) based on incentives, a FTA is based on superiority, ensuring comprehensive integration with the world economy.

Second, strongly transform management thinking: from "administrative management" that focuses on procedural compliance, short-term targets and avoiding responsibility, to strategic management - wholeheartedly aiming for a long-term vision, seeking all global resources and intelligence to create value, taking the trust of people and businesses as the most important measure.

Third , prioritize value creation capacity: not only chasing projects, but also focusing on improving competitiveness, promoting the economic shift to higher value sectors, creating spillover effects, resonance and building social trust.

Fourth , build an elite public administration: refer to Shanghai's experience with two specific steps: (i) establish a City Development and Reform Commission with about 200 - 300 elite cadres, selected from many sources, including central and international, with the capacity to plan strategies and coordinate effective implementation; (ii) establish an International Business Advisory Council similar to Shanghai's IBLAC, gathering CEOs of about 50 global corporations, meeting annually to contribute strategic ideas - this mechanism helped Shanghai propose the first KTTMTD in 2013.

Fifth , quickly deploy breakthrough infrastructure projects: especially metro systems, data centers, educational zones, technology transfer centers and digital transformation support for small and medium enterprises, and jointly develop renewable energy (solar, offshore wind power, and equipment manufacturing).

Among them, the metro (metro - PV) must be the top priority. Experience from many Chinese cities (Chengdu, Suzhou, Hangzhou) shows that building 300 - 500 km of metro in 20 years is completely feasible and has a huge impact on growth, especially improving labor productivity and urbanization efficiency.

With a fairly high efficiency (ICOR at 3.0), if this project is invested by the city in the next 20 years at a rate of 2-3% of GDP (ie 2-5 billion USD) per year, it will contribute an additional 0.7 - 1 percentage point to annual growth, while strongly strengthening the confidence of people, businesses, and investors.

The year 2025 opens up a new opportunity, requiring Ho Chi Minh City not only to make great efforts in promoting growth, but also to have an eagle's eye, learn from international best practices and look to the future to shoulder the responsibility of becoming the "epicenter of development" - not only of Vietnam but also of Southeast Asia.

If the country's fortunes are coming, this will be the starting point, where the fire of aspiration will flare up, leading the nation into an era of sustainable prosperity.

Prof. Dr. VU MINH KHUONG (LY QUANG DIEU SCHOOL OF PUBLIC POLICY)

Source: https://tuoitre.vn/phat-trien-tp-hcm-tu-dai-do-thi-toi-tam-chan-phat-trien-20250910230034158.htm