Vietnam's Private Sector: Current State, Structural Bottlenecks, and Policy Orientations in the New Development Era

Abstract

Against the backdrop of Vietnam's target of 10% average annual GDP growth during 2026-2030 and the formal designation of the private sector as "the most important driver of the national economy" under Resolution No. 68-NQ/TW (2025) and the 14th National Party Congress Documents (2026), this paper analyzes the development trajectory of Vietnam's private sector using data spanning 2011-2026, identifies structural bottlenecks, and proposes policy orientations to translate this designation into substantive growth momentum. The paper adopts a qualitative research design combining secondary document analysis with descriptive cross-sectoral comparison (private sector - state-owned enterprises - FDI enterprises) over three five-year periods, updated through Q1 2026. The findings reveal that while the private sector has achieved considerable scale - nearly 1.055 million active enterprises as of May 2026, contributing approximately 51% of GDP - a persistent paradox of "large in number but weak in quality" remains. Fixed assets per worker amount to only VND 388.65 million (roughly one-third of state-owned enterprises), the return on sales (ROS) stands at a mere 2.21%, and nearly 47% of private firms report net losses. Furthermore, domestic export value declined by 6.1% in 2025 while FDI export value surged by 26.1%, reflecting deep structural dependency. The paper identifies four clusters of structural bottlenecks - firm-level constraints, institutional barriers, global value chain (GVC) linkage gaps, and human capital deficiencies - and proposes five integrated policy packages to position the private sector as the true vanguard of Vietnam's new development era. The study contributes an integrated theoretical framework linking productive-forces, Schumpeterian, and GVC perspectives, and translates this framework into concrete, prioritized policy recommendations.