General Secretary Tô Lâm emphasized the need to renew thinking about the role and position of the private economy in the socialist-oriented market economy.
A Well-Deserved Recognition for the Private Economy
According to the 2024 White Paper on Enterprises from the Ministry of Planning and Investment (restructured under the Ministry of Finance), by the end of 2022 (based on the latest survey results from the General Statistics Office), the non-state enterprise sector (private enterprises) comprised 710,664 businesses, accounting for 96.6% of all enterprises nationwide. Among them, 44.3% were profitable, 8.6% broke even, and 47.1% reported losses. These figures reflect the impact of COVID-19 on the non-state sector, along with ongoing regulatory and policy challenges that have yet to be fully addressed.
However, despite short-term difficulties, the private sector grew by 19.9% on average during 2021-2024, second only to FDI enterprises (which grew by 29.3%). Meanwhile, the state-owned enterprise (SOE) sector experienced an 18.1% decline in growth during the same period.
The private sector has also witnessed significant increases in the number of micro, small, medium, and large enterprises. Many private companies have successfully established their national and international brands through global investments, enhancing both their domestic and international influence. Examples include Vingroup, T&T, Masan, Sovico, Hoa Phat, Trung Nguyen, and BIM Group.
With policies from the Party and State—most recently Resolution 41 from the Politburo—Vietnam’s economy as a whole, including the state-owned, FDI, and private sectors, has continued to grow. These sectors contribute to GDP, state budget revenues, job creation, and social welfare. However, for the private sector in particular, its entrepreneurial spirit, innovation, and ambition to rise still require a major turning point to fully unleash its potential in the globalized economy.
This turning point demands a clear and forward-looking vision for the role of the private economy in Vietnam’s socialist-oriented market economy. From there, legal frameworks and policy mechanisms must be refined to maximize the capacity of this sector.
For the first time, under the direction of General Secretary Tô Lâm, renewing the perception of the private sector’s role and position is being prioritized. His call for a breakthrough resolution on the private economy signals a long-awaited and well-deserved milestone for this sector.
New Mindset, New Expectations for the Private Economy
Although Vietnam’s political system has evolved in its perception of the private economy, bias and discrimination against this sector still exist—both among public officials and the general public. Without a correct understanding, the private sector will continue to face bureaucratic red tape and regulatory barriers.
As General Secretary Tô Lâm emphasized, Vietnam must transition from the mindset of “enterprises can only do what the law explicitly allows” to “enterprises are free to do business unless the law explicitly prohibits it”. This shift is crucial because, in recent years, unclear legal regulations and policies have led to loopholes, legal evasions, and violations of business ethics. At the same time, honest businesses often hesitate, unsure whether they are allowed to act unless explicitly stated, limiting innovation and growth potential.
Vietnam currently boasts a large and dynamic community of entrepreneurs. Including household businesses, data from the Vietnam Chamber of Commerce and Industry (VCCI) estimates there are 2-3 million entrepreneurs—a valuable national resource that plays a key role in industrialization, modernization, and economic self-reliance. However, despite this potential, private enterprises still struggle with scale, competitiveness, leadership, and industry linkages.
Additionally, Vietnam has over 5 million individual business households, many of which hesitate to scale up due to regulatory constraints and compliance concerns. As General Secretary Tô Lâm pointed out, many household businesses “do not want to grow” or “do not dare to grow” because of these barriers.
Now, imagine if these 5 million business households could expand into fully-fledged enterprises. Alongside existing and emerging private corporations, this would significantly boost GDP, state revenues, and employment, creating a ripple effect of prosperity across Vietnam and beyond.
No successful business environment can exist without cooperation, competition, and development. Millions of private enterprises—working alongside state-owned companies and FDI investors drawn to Vietnam’s growing economy—are shaping the country’s future.
With the right policies in place, Vietnam’s growth potential could surpass double-digit targets, unlocking new levels of economic success.
Source: Dr. Nguyễn Hoàng Hiệp, Economist