Photo courtesy of Vietnam News

 

Vietnam is on the cusp of a significant economic transformation, driven by strategic administrative mergers designed to form mega industrial hubs. These landmark consolidations are not just altering physical boundaries but are reshaping the nation’s economic landscape with expectations of sustained double-digit growth.

 

Key changes include the unification of Bắc Giang with Bắc Ninh in the north and the merger of Bình Dương and Bà Rịa – Vũng Tàu with Hồ Chí Minh City in the south. These strategic amalgamations aim to create expansive and sustainable development corridors that will enhance Vietnam’s position in both regional and global markets.

 

Hồ Chí Minh City, following its merger, has emerged as Vietnam's largest megacity, housing a population of around 14 million and contributing a quarter of the nation's GDP. This megacity now stands as a financial hub and manufacturing powerhouse with a robust marine and energy infrastructure, positioning itself as one of Southeast Asia’s most dynamic economic centres.

 

The mergers represent more than just geographical adjustments; they embody a convergence of shared vision and ambition. Party General Secretary Tô Lâm highlighted this transformation as the foundation for a megacity destined to become a powerhouse for finance, production, logistics, and innovation on both regional and global stages.

 

Before the merger, the three localities—Hồ Chí Minh City, Bình Dương, and Bà Rịa – Vũng Tàu—had distinct industrial focuses. Hồ Chí Minh City capitalised on light industry, high-tech manufacturing, and logistics. Bình Dương focused on processing and support industries, while Bà Rịa – Vũng Tàu specialised in heavy industry, petrochemicals, and port advantages. The merger synthesises these strengths into a cohesive industrial zone.

 

The newly expanded Hồ Chí Minh City now boasts 61 industrial parks, export processing zones, and clusters, producing over 30% of Vietnam’s total manufacturing output. Furthermore, it attracts foreign direct investment (FDI) exceeding $90 billion (approximately 3.3 trillion Thai Baht). According to Salvatore Banco from law firm D’Andrea & Partners, this merger strengthens the city’s connectivity to ASEAN and global supply chains, enhancing its appeal to high-quality foreign capital.

 

In just one month since the merger, FDI inflow surged by 45.7% year-on-year, reaching $6.2 billion (approximately 227 billion Thai Baht) by July. Notably, more than $1 billion (approximately 37 billion Thai Baht) has been channelled into high-tech industries, reflecting robust investor confidence in the new business climate despite increasing regional competition for FDI.

 

Nguyễn Công Vinh, director of the municipal Department of Finance, acknowledged the challenges ahead. High logistics costs, limited land for industrial development, low levels of automation and productivity, and slow digital transformation are significant hurdles. To address these, the city must define clear functional roles within its regions: Hồ Chí Minh City as a hub for research, development, and innovation; Bình Dương as a centre for smart manufacturing in semiconductors and automation; and Bà Rịa-Vũng Tàu focusing on logistics and heavy industry.

 

Vice Chairman Nguyễn Lộc Hà emphasised that high-tech, innovative, and next-generation industries will drive growth. The city's strategic shift towards smart manufacturing, green industry, and the circular economy aims to upgrade value chains, fostering an innovation ecosystem aligned with regional development goals.

 

In the north, the merger of Bắc Giang and Bắc Ninh rekindles a historic union, creating one of Vietnam’s most dynamic growth regions. Now covering over 4,700 square kilometres and with a population surpassing 3.6 million, the expanded Bắc Ninh ranks fifth nationwide in economic output. It serves as a gateway to Hà Nội and connects the economic triangle of Hà Nội, Hải Phòng, and Quảng Ninh, benefiting from strategic corridors and connectivity.

 

Robust infrastructure bolsters this region, including planned upgrades to Gia Bình Airport, which is set to become northern Vietnam’s largest airport, and enhancements to rail and road networks facilitating seamless economic integration.

 

The merger revives a historical connection, as Bắc Ninh and Bắc Giang were once the unified Hà Bắc province. Since their initial separation in 1997, Bắc Ninh has emerged as Vietnam’s electronics hub, drawing significant FDI with over 16 industrial parks and a cumulative investment exceeding $32 billion (approximately 1.2 trillion Thai Baht). Bắc Giang, a rising star in supporting industries, attracts high-tech projects, achieving impressive GRDP growth of 14.02% recently, the highest nationwide.

 

The new province aims to deliver balanced and sustainable growth, leveraging the convergence of technology, workforce, and regional connectivity. Chairman Vương Quốc Tuấn stressed that Bắc Ninh aspires to become a centrally governed city by 2030, targeting average GRDP growth of 11-12% annually and establishing its status as Vietnam’s leading electronics hub.

 

This ambitious plan emphasises continued focus on planning, infrastructure, and urban development to attract private investment. By improving policies for high-tech, green, and digital industries, Bắc Ninh aims to establish itself as a centre of science, technology, innovation, and digital transformation, positioning these as new growth drivers.

 

Kalungi Clausen from Civitas and House of Tech views these developments as heralding a new era in regional development strategies. By integrating provinces, Vietnam can transcend outdated administrative boundaries, laying the groundwork for interconnected urban centres, industrial parks, and regional transport networks.

 

Through these strategic mergers, Vietnam is setting the stage for a new chapter in its economic journey, with mega hubs poised not only to transform the country’s industrial landscape but also to redefine its role on the global economic stage. These hubs aim to foster innovation, drive economic growth, and enhance sustainable development, creating a more prosperous future for Vietnam.

 

  Adapted by ASEAN Now from Vietnam News 2025-09-01

 

13 hours ago, snoop1130 said:

designed to form mega industrial hubs.

Goodness me. The Viets are learning from the Thais! Now there's a revolution!

Thailand will get to stare at Vietnam's tail lights in disbelief, as the Vietnamese economy will skyrocket past Thailand's in the not too distant future.

 

 

Freaky......just come off Whatsapp talking to friend who has been touring around Vietnam.......he said he was totally blown away.

11 hours ago, Will B Good said:

 

 

Freaky......just come off Whatsapp talking to friend who has been touring around Vietnam.......he said he was totally blown away.

 

blown away by what? 

 

Mega-City One.  I wouldn't advise living in Peach Trees.

13 hours ago, save the frogs said:

 

blown away by what? 

 

 

Industrial and urban development.