Industrial transformation - the foundation for Ho Chi Minh City to "go further"

Experts and managers say that after 50 years of development, Ho Chi Minh City's industry has become outdated, still using a lot of resources, is labor-intensive and has low added value. Therefore, transforming the industry towards high technology and modernity will be the foundation for "the city to go further".

The proportion of industry in the economic scale and GRDP growth of Ho Chi Minh City is gradually decreasing. (Source: Communist Magazine)

In 2022, industry accounted for 19% of Ho Chi Minh City's Gross Regional Domestic Product (GRDP) (the national average was 32%). By the first half of 2024, this rate would be 17.8%.

The research team of the Ho Chi Minh City Institute for Development Studies (HIDS) assessed that the decreasing contribution of the industrial sector is one of the reasons why the position and role of the economic center of Ho Chi Minh City in the country is not commensurate and tends to decline.

Not to mention, in recent years the city's economy has developed in width, so the growth momentum has gradually dried up. Industrial infrastructure is limited and cannot meet the demand for width development.

New drivers of growth

According to Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (Huba), currently, trade and services contribute 65.6% to the city's economy, followed by industry (17.8%), construction (3.2%) and agriculture, forestry and fishery (0.5%).

Although ranking second, the proportion of industry in the economic scale and GRDP growth of the city is gradually decreasing.

Experts and managers also commented that after 50 years of development, Ho Chi Minh City's industry has become outdated, still using a lot of resources, is labor-intensive and has low added value. Therefore, transforming the industry towards high technology and modernity will be the foundation for "Ho Chi Minh City to go further".

Mr. Nguyen Ngoc Hoa emphasized: "Industrial transformation will bring high added value to the city, meeting domestic and international development needs. This new driving force will help the city avoid falling behind the world 's increasingly high demands, as well as improve product quality for the domestic market," Mr. Hoa commented.

In a report on the importance of industrial transformation published in September 2024, HIDS said that industrial transformation is the process of changing the foundation of industries. At the city level, it is a structural shift towards abandoning or upgrading some traditional industries, developing new industries with high added value and sustainability.

For Ho Chi Minh City, the group of experts from HIDS believes that the dual transformation in industry, i.e. both greening and digitalization, will exploit the symbiotic benefits of both trends.

Deputy Director of HIDS Pham Binh An emphasized: "The city needs to dual-transform industry, upgrade value chains, and develop core industries to find new growth drivers."

This method has been implemented in many countries and is an inevitable trend.

Industrial transformation will bring high added value to Ho Chi Minh City, meeting domestic and international development needs. (Source: Natural Resources and Environment Newspaper)

Citing Europe, HIDS said Germany has an "Industrie 4.0" strategy to promote automation and smart manufacturing. At the same time, the European "locomotive" also strives to encourage the use of renewable energy, improve energy efficiency and reduce carbon in production.

Similarly, in China - the world's second largest economy - there is a plan called "Made in China 2025", promoting the application of artificial intelligence (AI), big data and robots in production.

The country of one billion people also invests in the supply chain to produce renewable energy and electric vehicles to fulfill its commitment to peak emissions by 2030 and become carbon neutral by 2060.

"Ho Chi Minh City's industry should transform to high technology, smart factories, and less labor. Traditional industries such as food, textiles, and rubber and plastic should upgrade their value chains through the application of technical advances to process high value-added products. At the same time, continue to develop industrial support services," the HIDS group noted.

Policy dialogue - highlight of HEF 2024

Implementing the "National Strategy on Green Growth for the period 2021-2030, vision to 2050" and continuing to more specifically deploy the plan "Strategy for Industrial Development of Ho Chi Minh City to 2030, vision to 2050", the City government realized that one of the key goals and tasks is to focus on developing the city's industry in depth, prioritizing the development of high-tech industries, stages that bring high added value, applying advanced technology, using new materials, using green energy and sustainable development.

Therefore, the 5th Ho Chi Minh City Economic Forum (HEF) in 2024, taking place from September 24-27, chose the theme "Industrial transformation, a new driving force for sustainable development of Ho Chi Minh City".

Delegates at the opening session of the Ho Chi Minh City Economic Forum 2023. (Source: VNA)

At the press conference providing information about the 2nd Ho Chi Minh City Friendship Dialogue and the 5th HEF taking place on September 12, Mr. Pham Binh An said that if in 2022, Ho Chi Minh City chose the economic forum theme as digital economy, in 2023 as green growth journey to Net Zero, then this year, the theme of industrial transformation is the process of applying science and technology to change business models, towards sustainable development; finding directions for industries with high added value.

"This is a trend in countries around the world, setting new standards that Vietnamese businesses as well as businesses in Ho Chi Minh City cannot stay out of, otherwise they will lose the market," Mr. Pham Binh An affirmed.

At HEF 2024, the locality hopes to collect more information and recommendations from domestic and foreign experts on global industrial transformation trends. This will contribute to clarifying the industrial transformation strategy for the economic locomotive.

The event will have about 40 local, ministerial and international delegations and experts from 16 countries such as Laos, Cambodia, China, Cuba, the United States, Japan, South Korea, Russia, India, Germany, etc.

Besides the opening session and parallel sessions, the policy dialogue session, which was boldly organized for the first time by the city at this Forum, is expected to become a highlight of this year's forum.

The policy dialogue session aims to create opportunities for localities and enterprises to have in-depth and substantive exchanges with the Prime Minister and central ministries and branches on the current situation and solutions in applying the industrial transformation model in Ho Chi Minh City as well as national strategic issues, and at the same time recommend models, solutions and policies to the Government.

As a major economic center, the economic locomotive of the whole country, a change in awareness and new knowledge in the entire political system, businesses and people about the industrial transformation journey is necessary. Therefore, the 5th HEF is expected to "open up" more on this issue, thereby creating momentum to promote economic growth of Ho Chi Minh City.

Within the framework of HEF 2024, the 2nd Ho Chi Minh City Friendship Dialogue (FD) in 2024 will also be held with the theme “Industrial Transformation: Experience and Priorities in Development Cooperation”. The dialogue will take place from September 23-24.

Source: https://baoquocte.vn/chuyen-doi-cong-nghiep-nen-tang-de-tp-ho-chi-minh-di-xa-hon-287351.html