Vietnam delivers:Â 8% GDP growth in 2025, a booming stock market, and official entry into the ranks of upper-middle-income economies.
But behind the shiny facades of new mega stadiums and airports, cracks are emerging. The country is heavily reliant on a handful of giants and struggles with a risky dependence on China.
âťťWe are entering an era of national rise.
To Lam, Vietnam’s top leader
Details
🏗️ Concrete Boom: Vietnam is building at breakneck speed. Infrastructure spending jumped 27% to $32bn. For 2026, another 34% budget increase is planned. The goal: 10% growth—at almost any cost.
🏦 “Chaebol,” Vietnamese-style: Vietnam’s stock market rose 37%. But nearly three-quarters of those gains came from just three stocks tied to the Vingroup empire. Without that single conglomerate, the rally would have been a modest 11%.
🚧 The Vin Fail: The fragility of the model showed in a $67bn railway project. Vingroup pulled out after the state refused to provide interest-free loans covering 80% of the cost.
🇨🇳 China’s Shadow: Vietnam’s trade deficit with China widened by 40%. The country increasingly acts as a final-assembly hub for Chinese components to bypass U.S. tariffs.
📉 The Power Puzzle: Electricity consumption grew by only about 5%. Historically, energy demand should rise much faster. That raises doubts about how much of the growth reflects real production.
HCMC as a Lifeline?
Vietnam is trying to break out of its rigid model. Resolution 260 turns Ho Chi Minh City into a test lab for a more modern growth path:
- Bureaucracy Bypass: HCMC can now approve mega-projects independently, without waiting for slow approvals from Hanoi—aimed at clearing the investment backlog.
- Logistics over Assembly: With the new Cái Mép Hạ Free Trade Zone, Vietnam wants to move from being a “gatekeeper for Chinese parts” to an independent global logistics hub.
- The Transit-Finance Loop (TOD): The city builds metro lines, keeps 100% of the land-value gains around stations, and reinvests them directly into infrastructure.
🥡 Takeaway
Vietnam is growing fast, but prosperity and value creation are largely booked by foreign corporations. More than 77% of export value comes from foreign firms, while exports by domestic companies recently fell by 6%.
For now, Vietnam is a highly efficient host for foreign capital rather than an independent economic powerhouse. The 10% growth target for 2026 is a risky bet. Long-term success hinges on whether reforms like those in HCMC can reduce dependence on global multinationals and conglomerate giants.
The China Survival Guide for Western Businesses
Entity setup, WeChat strategy, hiring your first local team. 12+ years on the ground in Shanghai.
