Ho Chi Minh City develops high-value service industry

Ho Chi Minh City identifies the development of high-quality and high-value service industry as not only an economic goal, but also a strategy for sustainable, modern urban development with its own identity; at the same time, it is a fundamental solution to enhance competitiveness, international position and improve the quality of life of the people.

image (1) — *Modern urban area in the city center. (Photo: THE ANH)*

Potential, great room

According to the draft project "Building Ho Chi Minh City to become a major service center of the country and the region with high-class, modern, high-value-added service industries", the city is a service and economic center with the largest GRDP scale in the country, contributing 25% of the country's GDP; the added value of service industries accounts for about 31% of the total added value of the service sector in the country in 2024. Key service industries not only play a pivotal role in socio-economic development, but are also a key driving force for economic growth. The group of nine key service industries accounts for more than 90% of the value of the service sector, with a growth rate of 8.1% in the period 2010-2024. However, in Binh Duong and Ba Ria-Vung Tau in the past, the proportion of these nine service industries was lower, reaching 87% and 78% respectively. The synergy between the three localities creates a more diverse, rich and modern service picture. Binh Duong adds its strengths in logistics, transportation and warehousing, while Ba Ria-Vung Tau contributes outstanding value from seaport services, international transportation and tourism.

According to experts, this combination is expected to expand and enhance the service value chain of the new city, not only more diverse but also creating higher added value, making the city a leading service center of the country and the region. The (old) city continues to play a central role in most service industries, especially high-quality and high-value-added industries. The city affirms its leading position when contributing more than 30% of the country's total value in the fields of science and technology, health care , transportation, finance, banking, insurance, etc. With the wholesale and retail trade, import-export, accommodation, food and beverage industries, the city still accounts for about 20-30% of the country.

Binh Duong (old) makes the most prominent contribution to services related to industrial production activities such as: Industrial real estate, transportation, warehousing, logistics..., accounting for about 3-5% of the country. Ba Ria-Vung Tau (old) has its own advantages in seaport services, international transportation and resort tourism, with a contribution of 3% of the country, creating a unique competitive position. Therefore, after the merger, the new city will make an outstanding contribution to the service structure of the whole country with the "3 in 1" advantage: Both playing the role of a high-value service center (finance, banking, insurance, science-technology, information technology, telecommunications, healthcare) of the old city; and supplementing logistics services from Binh Duong; expanding to seaport services, international transportation and tourism from Ba Ria-Vung Tau. This resonance not only helps the new city maintain its national leading position in many service industries, but also creates a more diverse and comprehensive service structure.

Many breakthrough solutions

Despite many positive results, the service sectors in the city have not yet developed commensurate with their position and potential and still contain many unsustainable factors and many worrying issues. For example, traditional service sectors still account for a high proportion compared to high-end, modern service sectors with high added value; the transition to high-value service sectors is still slow compared to large urban areas in the region; most service enterprises are small and medium-sized. Infrastructure serving service sectors is still lacking in synchronization, low connectivity, often overloaded, and does not meet development needs; competitiveness is still limited in service sectors, especially financial services...

Vice Chairman of the City People's Committee Nguyen Van Dung said: The city aims to become a developed urban area on par with major cities in the world. To realize this goal, the city is focusing on implementing the following tasks: Building and implementing the project "Building the city into a major service center of the country and the region with high-class, modern, high-value-added service industries"; developing the city into an international financial center, gradually integrating capital markets, insurance, fintech, digital banking; orienting the development of logistics into a spearhead economic sector, planning Cai Mep-Thi Vai seaport, international transit port in Can Gio; at the same time, linking with the completion of transport infrastructure - seaport - warehouse - express delivery. The city also promotes international education, high-class medical services, serving not only domestic people but also international customers. Developing high-quality tourism to become a regional service brand...

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Developing financial services, especially the International Financial Center, will promote the development of related service industries, creating a spillover effect to many other areas of the economy; thereby, improving the image and position of the city. The city needs to give top priority to perfecting the legal framework, breakthrough policies on tax and land, synchronous infrastructure investment, training high-quality human resources, flexible and transparent management mechanisms with high internationality.
Associate Professor, Dr. Tran Huy Hoang, financial expert, Permanent Vice Rector of Van Hien University

According to experts, to realize the above aspirations, the city needs a system of synchronous solutions, both fundamental and breakthrough. These are solutions on mechanisms and policies; infrastructure; human resources; investment capital; trade promotion and advertising; innovation and technology. According to Associate Professor, Dr. Tran Hoang Ngan, member of the National Assembly's Economic Committee, the city needs to invest heavily in technical and social infrastructure. In the context of limited state budget, the city needs to mobilize social resources, especially the private sector and foreign investors. To attract investors, the city needs to create outstanding institutions: a transparent, attractive and stable investment and business environment.

Associate Professor, Dr. Tran Huy Hoang, financial expert, Permanent Vice Rector of Van Hien University, said: Developing financial services, especially the International Financial Center, will promote the development of related service industries, creating a spillover effect to many other areas of the economy; thereby, improving the image and position of the city. The city needs to give top priority to perfecting the legal framework, breakthrough policies on tax and land, synchronous infrastructure investment, training high-quality human resources, flexible and transparent management mechanisms with high internationality.

Source: https://ttbc-hcm.gov.vn/thanh-pho-ho-chi-minh-phat-trien-nganh-dich-vu-gia-tri-cao-1019857.html