Diverse service sector to drive growth in HCM City

 

Nguyễn Thiện Nhân, secretary of the HCM City Party Committee, speaks at a seminar on service sector development in HCM City on Wednesday. — VNS Photo Bồ Xuân Hiệp
 

HCM CITY — HCM City should develop a more diverse service-sector economy and avoid relying on only real estate to maintain robust economic growth, experts have said. 

Nguyễn Thiện Nhân, secretary of the city’s Party Committee, said the service sector has greatly contributed to economic growth during the past three decades, but a long-term growth strategy should be devised by 2030.

“Services such as healthcare, education, transport and logistics are badly needed, and they must focus on environmental protection,” he noted.

Speaking at a conference in the city on Wednesday, Nhân said local authorities should learn from other urban areas around the world and enhance services, especially transport and logistics.

Nhân cited examples of major cities that have successfully developed the service sector, including New York, Sydney, Melbourne, Seoul, Tokyo and Singapore. 

As a major economic hub of the south and the entire country, HCM City has in recent years focused on economic restructuring, especially the industrial, agriculture and service sectors.

Major services include finance, banking and insurance; trade and tourism; transportation; and ports and warehouses.

Others include telecommunications, information and communication; real estate; science and technology; healthcare; and education.

Nguyễn Thanh Nhã, director of the city’s Department of Planning and Architecture, said the service industry would be a driving force to build a smart urban area.

“The city must build sufficient infrastructure, especially transport and logistics, to meet fast economic growth,” he said, adding that strategic planning with industry-oriented solutions is needed.

Urban planning will not only focus on land and housing use, but also on renovation of existing infrastructure and application of Artificial Intelligence (AI), he said.

Land allocation

Võ Văn Hoan, vice chairman of the city’s People’s Committee, said the central Government had allowed the city to convert 26,000ha of agricultural land to industrial land, which will serve service, industrial and real estate services. 

“The city must allocate a significant portion of this land resource to build infrastructure for the service sector as soon as possible,” he noted.

Zhiyu Jerry Chen, sector coordinator for urban development at the World Bank in Việt Nam, said: “Việt Nam in the past decade has experienced a rapid, broad-based and steady urbanisation process.”

Hà Nội and the Red River Delta as well as HCM City and the Southeast region are the two leading metropolitan regions and are “engines of growth”, he noted. 

“We see strong growth and the beginning of HCM City’s industrial structure transitioning into a more value-added economy,” Chen said. “However, we also see some slowdown of growth rates in certain aspects of the economy and industrial development."

The city should avoid over-relying on one sector such as real estate and develop a more diverse service sector, and use new technologies and artificial intelligence, among others, he said. 

“Very few international cities have developed without strong secondary-sector industries, so I recommend that HCM City develop a clear strategy for its secondary-sector development, in addition to the service sector,” he said.  

Service activities play a major role in the functions and development of cities. For those reasons, urban planning strategies should incorporate actions that are targeted at the location and development of these activities, according to experts. 

However, such development is not easy because of the wide array of services, from globally-focused high-level decision-making (such as banking and finance) to local scale retail, education and health services, they said.

Nearly 300 local and international experts yesterday took part in the international conference on HCM City’s service sector development organised by the municipal People’s Committee. — VNS