New governance model adopted to drive economic growth in Hanoi and Ho Chi Minh City

At the Government’s regular March 2026 meeting and during an online Government-localities conference on April 4 in Hanoi, Vu Dai Thang, Chairman of Hanoi’s People’s Committee, said Hanoi’s Q1 2026 economic growth reached the highest level in ten years for the comparable period, outpacing the national average. State budget revenue in the first three months totaled about 230 trillion VND, equivalent to around 35% of the annual plan. Disbursement of public investment exceeded 110 trillion VND, reflecting the system’s commitment to spur growth.

At the southern meeting point, Nguyen Van Duoc, Chairman of Ho Chi Minh City People’s Committee, reported signs of a robust recovery. Ho Chi Minh City’s Q1 GRDP rose by 8.27%, the highest since 2020. Retail sales of goods and services increased 13.7%, while industrial production grew 11%. The city attracted nearly $2.9 billion in FDI, up 219% year-on-year, indicating confidence from international investors.

Beyond growth scale, both cities reported improvements in growth quality. In Ho Chi Minh City, the number of newly established enterprises reached 12,545, up 47%, with registered capital of more than 253 trillion VND. Hanoi also cited positive momentum in services, cultural industries, and the digital economy.

Officials said the results were achieved despite challenges including inflationary pressures, global market volatility, and energy security concerns, with Hanoi and Ho Chi Minh City continuing to act as key pillars of the national economy.

A governance reform push aimed at creating breakthroughs

A common feature highlighted by both Hanoi and Ho Chi Minh City is a strong reform of governance and administration. In Hanoi, the operating model is based on “six clarity”: clarity of people, clarity of tasks, clarity of processes, clarity of responsibilities, clarity of results, and clarity of timeframes. The approach is intended to improve transparency, accountability, and efficiency across the political system.

Hanoi also completed three strategic documents within a short period: the draft Capital Law (amendment), a capital development master plan with a 100-year vision, and a Politburo resolution on Hanoi’s development. These are described as important institutional foundations to create long-term development space for the city.

In parallel, Hanoi is implementing a governance model built on four pillars—Party, People’s Council, People’s Committee, and the Fatherland Front—combined with deep decentralization to the local level. More than half of communes and wards have developed their own socio-economic development plans aligned with the city’s direction.

In Ho Chi Minh City, administrative reform and improving the business and investment environment were identified as priorities. The city aims to reduce at least 30% of the time required to process administrative procedures and to roll out a system for monthly performance evaluations for each agency.

A highlight in Ho Chi Minh City is the use of the special mechanism under National Assembly Resolution 98. The city has proactively selected, publicized, and advanced a series of major projects in infrastructure, technology, urban development, and port sectors, with total capital exceeding $20 billion.

Targeting bottlenecks to accelerate delivery

Both cities said they are focusing on “bottlenecks” that slow implementation. Hanoi identified land clearance as a key breakthrough to unlock stalled projects, with some projects processed in as little as 20 days to create clean land reserves for investment.

Ho Chi Minh City, meanwhile, emphasized resolving long-standing project obstacles and accelerating completion of strategic infrastructure projects, particularly regional transport connectivity and airport-related projects.

New growth engines and forward targets

Officials said neither city is satisfied with short-term results and both are pursuing strategic, sustainable growth drivers.

Hanoi: technology, innovation and digital transformation

Hanoi is positioning science and technology, innovation, and digital transformation as pillars. The city said it wants traditional sectors to embed technology to raise value-added and competitiveness, while also focusing on high-value services, cultural industries, and the digital economy.

In the coming months, Hanoi plans to improve its institutional framework after the Capital Law is passed, accelerate investment in strategic infrastructure such as urban rail, and address bottlenecks in transport, the environment, and urban management.

Hanoi also aims to implement 100% online processing of administrative dossiers by April 2026, signaling a commitment to administrative reform and digital transformation.

Ho Chi Minh City: higher growth targets and new sectors

Ho Chi Minh City, described as the country’s largest economic center, is pursuing more ambitious goals. The city plans GRDP growth in Q2 above 11% and aims for full-year growth above 10%.

New growth drivers include building an international financial center, developing port facilities, expanding free trade zones, and developing high-tech industries such as semiconductors, data centers, and artificial intelligence.

The city also emphasized culture and urban space development. Projects such as Ben Bach Dang Park and other major cultural spaces are expected to create new city landmarks, raise living standards, and attract tourism. Training high-quality human resources through international cooperation programs is also prioritized.

Overall, officials said Hanoi and Ho Chi Minh City are not only two major economic centers but also engines driving Vietnam’s economy, with spillover effects on other regions. In a context where the economy needs new momentum to break through, the roles of the two cities are increasingly viewed as both leading growth and serving as laboratories for models that can be scaled nationwide.