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한국어 Post-reform, Hanoi and Ho Chi Minh City remain the country’s two most important economic and governance centers, shaping national development.
02Dec2025
Latest News & Report / Vietnam Briefing
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Vietnam’s 2025 national administrative merger aimed to streamline governance, reduce fragmentation, and enhance regional competitiveness by consolidating key economic zones. Within this new structure, Hanoi and Ho Chi Minh City (HCMC) remain the country’s two most important economic and governance centers, shaping national development. Post-reform, Hanoi focuses on innovation, digital governance, human-capital development, and cultural–heritage preservation, while HCMC expands into a mega-city integrating industrial, logistics, and coastal economic strengths. Together, the two cities create complementary opportunities for foreign investors across various fields.
Hanoi and HCMC in Vietnam’s Map
B&Company’s synthesis
Hanoi after the national administrative merger
Hanoi was not merged with other provinces during Vietnam’s 2025 administrative reforms. In 2008, Hanoi expanded by merging with Ha Tay province, Me Linh district from Vinh Phuc, and parts of Hoa Binh. This left ample room for growth without needing further mergers, unlike denser cities facing infrastructure bottlenecks[1]. Keeping Hanoi intact preserves its role as the political and administrative capital while allowing focus on internal efficiencies like the new two-tier governance model.
In the period of 2020-2024, Hanoi has an average GRDP growth rate of 7.1%/year, higher than the national level (6%/year)[2]. In the first nine months of 2025, Hanoi has reached a growth rate of 7.92% and is expected to have an annual growth of 8.5%[3]. During 2026 – 2030, Hanoi targets to have GRDP growth of over 11% per year, an increase in the human development and well-being index. The city explicitly aims to be “Văn hiến – Văn minh – Hiện đại” (Heritage – Civilized – Modern), positioning itself as a top national centre for culture, education, health, science, technology and innovation
The Hanoi government has recently emphasized building a smart, modern capital. The city also accelerates the implementation of digital governance and public-service digitization: local authorities have issued directives to deploy information-technology staff at all administrative levels to support citizens and businesses in online public services[6]. The city is working to build an innovation ecosystem, leveraging the existing high-tech zone (e.g., Hoa Lac High-tech Park)[7].
Hanoi also sets a new record for its FDI inflows: in the first seven months of 2025, Hanoi attracted USD 3.8 billion of FDI investment, accounting for 15.6% of national FDI. This places Hanoi in the third rank compared to other cities/provinces in the country, behind HCMC and Bac Ninh[8]. Key sectors include real estate, manufacturing, R&D, tech transfer, and high-quality training[9].
However, Hanoi faces several challenges. After the national administrative merger, Hanoi has the highest population density among 34 cities and provinces. This high population density, particularly inthe central area, creates congestion, strains infrastructure, and drives up real estate and living costs. Rapid urbanization risks putting pressure on transport, utilities, and public services, while balancing modern development with heritage preservation remains difficult. Additionally, although the city is prioritizing innovation and digital transformation, the absorption and effective deployment of capital and talent in these sectors still lag behind targets[10].
Top 5 Vietnamese Cities/Provinces with the highest Population Density after merger (2024)
Unit: People/km2
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