Ho Chi Minh City desires to become an international financial centre

Ho Chi Minh (HCM) City has set the target of becoming a smart and modern service-industrial city and maintaining its position as an economic locomotive and a growth driver of the southern key economic region and the whole country by 2025.

The 11th Congress of the HCM City Party Committee (2020-2025 tenure) has designed 26 development targets for the term across five areas, including the GRDP growing 8% on average annually, the digital economy contributing 25% to the GRDP by 2025 and 40% by 2030, the social labour productivity expanding 7% on average annually, and at least 95% of the people being satisfied with the service of state administrative agencies in each field.

To achieve these goals, HCM City has outlined four development programmes with dozens of specific projects. A significant programme to the city’s economic growth and development is the key programme for the development of businesses, innovative entrepreneurship and key products. This programme consists of 13 specific programmes and projects, such as programmes to support the development of enterprises and products in the areas of information technology and communications (ICT), mechanics and automation, and food processing in the period of 2020-2030; a project on developing HCM City into a regional and international financial centre; and support policies for the sharing economy, the digital economy and the circular economy between 2020-2025.

HCM City has also identified many groups of solutions in order to achieve the targets and tasks set out by the 11th Congress of the municipal Party Committee. Accordingly, the city will continue to renovate its economic growth model in a rapid and sustainable manner on the basis of science-technology application and development, with science-technology and innovation as the main driver of socio-economic and cultural development. In addition, administrative procedure reform will be accelerated with more practical and specific solutions.

Among the development tasks, becoming a regional and international financial centre is considered one of HCM City’s key goals in the near future, and is also a burning aspiration of the city for many years. This task has been included in the city’s 10-year socio-economic development strategy (2021-2030). In March 2021, the municipal People’s Committee submitted a document proposing the Prime Minister approve the city’s plan to develop a project on building a regional and international financial centre in the locality.

HCM City possesses many advantages to form and develop itself into a regional and international financial centre in the near future. First of all, in recent years, the city has been a “locomotive” and a main driver of Vietnam’s economy, contributing about 23% of the country’s GDP and about 27% of the national budget. On average, HCM City has attracted more than 33% of the total number of foreign direct investment (FDI) projects in Vietnam. The density of financial institutions in the city is the highest compared to other localities, while the total mobilised capital of local credit institutions accounts for 24% of the country’s total sum. Its total outstanding loans also account for 28% of that of the entire economy. Moreover, HCM City is the birthplace of Vietnam’s first stock market, with the total market capitalisation at the Ho Chi Minh City Stock Exchange accounting for more than 77% of the national total and 51.27% of the country’s GDP in 2020.

According to Chairman of the municipal People’s Committee Nguyen Thanh Phong, the formation of a regional and international-level financial centre in HCM City will create a positive and pervasive effect for the southern region and the whole Vietnamese economy. Capital supply for the country’s development will be more plentiful when attracting more foreign financial institutions and international investment flows. Furthermore, the fact that the city becomes a regional and international financial centre will contribute to more effectively exploiting the economic potential of the southern key economic region and the country as a whole.

Towards the goal of becoming a regional and international financial centre, HCM City is aiming to become a national financial centre in the short term. In the medium term, the city aspires to become a regional financial centre with a large concentration scale, providing financial services for neighbouring countries and then expanding to countries in ASEAN and across Asia. In the long term, the financial centre in HCM City will become the destination of leading financial institutions and economic organisations in the region and the world. Prof. Dr. Su Dinh Thanh, Rector of the University of Economics HCM City, said that in order to become a regional and international financial centre, the city’s financial system should be developed synchronously. Accordingly, HCM City should focus on developing the system of financial, monetary, bond and stock markets; property management technology; and financial services; as well as strengthening the global network of financial technology and perfecting the monitoring system and financial regulations.