Ho Chi Minh City Reimagined: Industrial Transformation after the Merger

On July 1, 2025, Ho Chi Minh City (HCMC), Bình Dương, and Bà Rịa – Vũng Tàu officially merged to form an expanded metropolis with nearly 14 million residents and a land area of approximately 6,770 – 6,800 km². This strategic integration redefines Vietnam’s status quo, establishing HCMC as a new, mega-scale city-region poised to become the country’s premier industrial hub.

Industrial scale and geographical scope

Following the merger, HCMC now includes 66 existing export processing zones (EPZs) and industrial parks, covering more than 27,000 ha of industrial land. Under the master plan toward 2050, planners envisage 105 EPZs and industrial zones totalling over 49,000 ha. Furthermore, official announcements confirm the development of 14 new industrial parks with a combined area of approximately 3,833 ha, to be implemented in phases from 2025 through 2033.

Vision and strategic orientation

The newly enlarged HCMC is envisioned not merely as a municipal expansion but as a “multicentral, integrated, modern, and sustainable metropolis” that connects seaports, innovation hubs, logistics, and finance zones in a unified regional ecosystem. Policy roadmaps like Resolution 98QH15 (2023), and subsequent Government resolutions in early 2025, reaffirm the goal of achieving at least 8 % national GDP growth in 2025, with HCMC playing the leading role.

Industrial policy is now geared toward transforming existing zones into high-tech, ecoindustrial, urbanservice logistics integrated zones, while new sites will adhere to modern industry clustering aligned with national priorities: electronics, semiconductors, biotech, blockchain, AI, advanced materials, and environmental industries.

Key Drivers and Investment Targets

Between 2025 and 2030, HCMC’s industrial zones aim to attract USD 20–21 billion in investment, achieving average registered capital of USD 8–10 million per hectare, with at least 70 % of registered capital disbursed on schedule.

Launch of largescale projects are already underway: Thaco Industries is commencing a major mechanical industrial park in Bình Dương in August 2025, with total investment of roughly VND 75 trillion (approx. USD 3 billion) and a planned full operation within a year. Another highprofile example is Lego’s US 1 billion toy factory in the VSIP3 park in Bình Dương, which is committed to using 100 % renewable energy in production.

This new direction also includes pilots in five existing industrial zones: Tân Thuận, Hiệp Phước, Tân Bình, Cát Lái, and Bình Chiểu focusing on conversion toward ecoindustrial, hightech, urbanindustrial, and logistics hub models.

Leveraging Regional Complementarity

By merging HCMC with Bình Dương and Bà Rịa – Vũng Tàu, the city-region now enjoys a powerful “triangular” valuechain advantage. HCMC leads in innovation and finance, Bình Dương specializes in manufacturing and processing, and Bà Rịa – Vũng Tàu anchors maritime logistics and energy development. Together, this ecosystem aligns research, production, ports, and services across regional lines.

Experts suggest that HCMC may emerge as a major industrial centre in East Asia particularly in highvalue, technologyintensive manufacturing if challenges such as infrastructure, labour quality, and green orientation are effectively addressed.

Challenges: Infrastructure, Logistics and Human Capital

Despite its scale, the new HCMC faces persistent bottlenecks. Logistics costs remain high 1620 % of product value due to fragmented connectivity among industrial zones, ports, and highways. Only about 15 % of export cargo through Bà Rịa – Vũng Tàu uses inland waterways or rail, most still moves by road, raising costs and congestion.

Critical transport infrastructure such as Ring Road 3 and Ring Road 4, Bến Lức – Long Thành, and TP HCM – Mộc Bài expressways remain under development. Completing them is vital to reduce logistics cost and enhance industrial competitiveness.

Human capital and industrial support sectors require attention. Many manufacturers still rely on imported components. Efforts are underway to develop domestic parts suppliers, foster R&D-led enterprises, and support startups especially in industrial supporting industries—via policy, standards, and quality infrastructure.

Reorganising Industrial Space and Governance

Thought leaders emphasise the need to redesign industrial spatial planning. They advocate for a defragmented, multicentre industrial geography where each subregion plays a defined role, and industrial sectors cluster intelligently by specialty—consolidating food processing facilities near raw materials, building coldchain logistics centres near ports, etc.

Administrative fragmentation remains an issue. Authorities propose a “special singlewindow mechanism” for major industry projects to avoid delays of six months to a year in approvals – a critical factor in global supply chains. Meanwhile, large enterprises could be encouraged to lead clusters and pull up smaller suppliers, enabling a more cohesive industrial ecosystem.

Innovation, Sustainability, and Industrial Cocreation

HCMC’s renewed industrial model builds on a “cocreation space” philosophy: government, academia, businesses, and community groups jointly shape policy direction, innovation ecosystems, and socially conscious development pathways.

The city has recently entered the global top 5 for Southeast Asia’s innovation ecosystems, ranked #110 globally by StartupBlink in May 2025, and broke into the top 30 in blockchain technology – a testament to increasing global recognition.

Outlook and Strategic Recommendations

To realise its industrial ambitions, the reconfigured HCMC should:

1. Complete strategic infrastructure projects (ring roads, logistic corridors, portrailroad interconnection) to reduce logistics cost and foster integrated connectivity.
2. Accelerate the conversion of existing parks into hightech, ecological, and urbanindustrial hybrid zones, while ensuring the new industrial parks are developed with the highest standards of sustainability.
3. Strengthen industrial support sectors via targeted incentives, quality benchmarking institutions, SME access to industrial zones, and startup incubation within EPZs.
4. Implement a governance reform with streamlined approval via a singlewindow system and enabling enterpriseled industrial clusters.
5. Foster crosssector collaboration for innovation through cocreation networks among universities, research institutes, businesses, and civil society.

Conclusion

HCMC’s merger with Bình Dương and Bà Rịa – Vũng Tàu has unlocked a rare opportunity: to transform into Vietnam’s and possibly the region’s leading industrial centre by scale, integration, and strategic orientation. With nearly 50,000 ha of industrial land in planning, USD 20 billion of investment target by 2030, and an innovationdriven vision for tomorrow’s smart industries, the new HCMC stands on the brink of an industrial renaissance. The key to success now lies in resolving legacy bottlenecks, enabling innovation, and integrating its regional strengths into a coherent, sustainable growth model.