Vietnam goes big in its sprint to 2030

Vietnam’s General Secretary To Lam has staked his leadership on the promise of a transformative ‘era of national rise’ — a bold new phase of development driven by digital transformation, institutional reform, infrastructure expansion, green growth and deeper global integration.

Lam frames the period from 2025–30 as a decisive ‘sprint period’ that will determine whether Vietnam can lay the critical foundations for its economic future. To turn his vision into reality, Lam has elevated Vietnam’s growth ambitions since taking power in August 2024.

Vietnam’s government has set a GDP growth target of at least 8 per cent for 2025, with plans to reach double-digit growth in the following years. Double-digit growth is essential for Vietnam to achieve the goals set by the 13th National Congress of the Communist Party of Vietnam — reaching upper middle-income status by 2030 and advancing towards high-income status by 2045. These national strategic goals will be reviewed by the 14th National Congress in early 2026.

To facilitate this aggressive growth agenda, Lam launched an ‘institutional revolution’ — the most sweeping bureaucratic restructuring since the Doi Moi reforms of 1986. This includes reducing ministry-level agencies from 22 to 17, eliminating redundant administrative layers and cutting approximately 100,000 jobs in the public sector. The aim is to create a leaner, more agile state apparatus capable of faster decision-making. Vietnam is poised to rearrange its 63 provinces and municipalities into 34, eliminate operations at the district level and reduce the number of communes as part of a broader administrative reform.

Alongside administrative streamlining, Vietnam has also revived several stalled infrastructure megaprojects. These include a US$67 billion North–South high-speed rail link, a US$8 billion rail connection to China, two nuclear power plants estimated at US$16 billion and new deep-water ports. These projects are intended to address logistical bottlenecks that have hindered economic growth, while positioning Vietnam as a key player in regional transportation.

Lam’s vision sees Vietnam as a technology driven national economy. In December 2024, the Politburo released a breakthrough resolution on science and technology, allocating 3 per cent of the national budget to innovation and digital transformation.

Lam himself chairs the Central Steering Committee for Science and Technology Development. The nation’s economy has already begun shifting from low-tech manufacturing to higher-value industries, securing investments from global tech giants including Nvidia, Samsung, Foxconn, Google and Meta.

Vietnam’s rapid economic ascent will hinge on its ability to manage its expanding network of 12 comprehensive strategic partners. Despite recent domestic political turbulence, Vietnam is steadfast in ‘bamboo diplomacy’ — bending with geopolitical winds without breaking. This has allowed the country to simultaneously deepen ties with competing major powers despite mounting pressure to choose sides.

Lam’s grand vision meets head-on with formidable challenges. The restructuring of administrative units carries implementation risks from a compressed reform timeline, with concerns that bureaucratic restructuring could disrupt governance and create decision-making paralysis.

The financial burden of simultaneous megaprojects places enormous strain on the national budget, raising questions about economic feasibility, potential cost overruns and delays. These concerns are not unfounded — Vietnam’s history with urban metro projects, including the Hanoi Metro and Ho Chi Minh City Metro Line 1, serves as a cautionary tale of prolonged setbacks and escalating expenses.

Environmental vulnerabilities further complicate Vietnam’s path forward, as the country grapples with high exposure to climate change and worsening urban pollution. In January 2025, Vietnam’s capital, Hanoi was ranked as the world’s most polluted city, a result of trade-offs between rapid industrialisation and environmental sustainability.

Steep 46 per cent reciprocal tariffs, despite Hanoi’s concerted efforts to appease the Trump administration through economic concessions and diplomatic engagement, caught the Vietnamese leadership off guard. The tariffs threaten Vietnam’s export-driven economy — the United States represents Vietnam’s largest export market. These tariffs have the potential to derail Vietnam’s growth target for 2025.

Xi Jinping’s April 2025 visit to Vietnam amid Trump’s tariff threats was a litmus test of Vietnam’s ability to balance great power relations. Xi urged Hanoi to work with Beijing to oppose Washington’s ‘unilateral bullying’ and ‘protectionism’. Trump framed Xi’s trip as an attempt to ‘screw’ the United States — a perception that might undermine Vietnam’s tariff negotiations. Yet, deepening economic and infrastructure ties with China are essential for To Lam to realise his own ambitions.

This illustrates how Vietnam’s bamboo diplomacy has faced unprecedented headwinds as geopolitical tensions mount, global supply chains fracture  and international crises proliferate. Recognising this shifting landscape, Lam synchronised Vietnam’s sprint period with what he calls ‘the most important period for establishing a new global order’. But this new global order is looking to be one of instability and volatility. Events in the years leading up to 2025’s brimming global trade war have shown that the rules-based multilateral system that has facilitated Vietnam’s economic rise is eroding, giving way to a world where might makes right.

The next five years will be decisive for Vietnam’s development trajectory. Success would cement Vietnam’s position as Asia’s next economic powerhouse, allowing the nation to escape the middle-income trap that has ensnared many developing economies. Achieving this will require balancing competing priorities — fostering political stability while driving rapid change, consolidating authority without stifling innovation and pursuing economic growth while tackling environmental challenges. Vietnam’s ability to manage these pressures while safeguarding its strategic autonomy will be crucial in defining its rise on the world stage.

By Phan Xuan Dung – The East Asia Forum – April 23, 2025