Jenny Lee / Vietnamtimes
After more than two decades of accompanying reforms to Vietnam’s investment and business environment, PCI 2025 marks a new turning point as it expands for the first time from measuring the quality of local governance to comprehensively assessing the development ecosystem of the private economy.
A Comprehensive Assessment of the Private-Economy Development Ecosystem
On May 15 in Hanoi, the Vietnam Chamber of Commerce and Industry (VCCI) officially released the Vietnam Private Economy Report 2025 and the Provincial Competitiveness Index 2025 (PCI 2025).
Associate Professor Dr. Ho Sy Hung, Chairman of VCCI, said PCI 2025 marks several important changes in both assessment methodology and the approach to the private economic sector. For the first time, VCCI has released a comprehensive report titled the Vietnam Private Economy Report, instead of focusing solely on evaluating the quality of provincial economic governance as in previous years.
Notably, this year VCCI introduced for the first time the Business Performance Index (BPI), designed to add a new perspective to PCI. While PCI measures “institutional inputs” — meaning the quality of the business environment and governance — BPI focuses on measuring “market outputs,” reflecting the real ability of businesses to survive, generate profits and participate more deeply in value chains.
Based on survey results, VCCI believes the private economic sector is gradually moving beyond a difficult period and entering a stronger recovery cycle. However, the report also points out a series of major bottlenecks hindering private-sector growth. Among them, 60.2% of enterprises reported difficulties in finding customers and expanding output markets, a sharp increase compared with previous years. In addition, access to capital remains a major barrier, with as many as 75.5% of enterprises saying they cannot obtain loans without collateral. The report also shows that the innovation capacity of Vietnamese enterprises still lags quite far behind the region.
According to the VCCI Chairman, PCI’s goal in the new phase is no longer to create a “ranking race” among localities, but to become a diagnostic tool that helps provinces and cities correctly identify problems and govern more effectively. Therefore, in 2025, VCCI decided not to publish a ranking from 1 to 34 as usual, but instead to announce six groups of governance quality.
According to the announcement, the five localities in the “Good” governance-quality group of PCI 2025 are Bac Ninh, Da Nang, Hai Phong, Phu Tho and Quang Ninh. For the pilot BPI index, the three leading localities are Ho Chi Minh City, Hanoi and Quang Ninh.
Dau Anh Tuan, Deputy Secretary General and Head of the Legal Department of VCCI, said the private economic sector currently accounts for 96.6% of all active enterprises in Vietnam, with more than one million businesses, serving as a core force of the economy. However, most enterprises remain small in scale and limited in internal capacity, with more than 80% having fewer than 50 employees and over 70% having charter capital of less than VND 10 billion.
Mr. Dau Anh Tuan said the three biggest difficulties currently facing private enterprises are pressure to find output markets, difficulty accessing capital due to a lack of collateral, and a policy environment that remains insufficiently stable and hard to predict.
When a Purely Vietnamese Enterprise “Lends Strength” to Improve the Business Environment
A notable highlight of PCI 2025 is the shift in the role of the private sector from being a “beneficiary” to becoming a “partnering actor.” For the first time, a purely Vietnamese enterprise, Tan Hiep Phat, has joined PCI as a partner after the international partner stopped providing sponsorship, with the new addition being the Vietnam Private Economy Report. This participation is not only financial in meaning, but also reflects the maturity of private enterprises in contributing to shaping the business environment and promoting institutional reform.
“The fact that a Vietnamese private corporation is taking over the sponsorship role for a policy research program of national stature is a historically meaningful transition. It is not only support in terms of resources, but also vivid proof that the Vietnamese business community itself is proactively shouldering the responsibility of creating a business environment for itself and for future generations of entrepreneurs,” Associate Professor Dr. Ho Sy Hung, Chairman of VCCI, said.
Nguyen Duy Hung, a member of Tan Hiep Phat’s Board of Directors, said Vietnamese private enterprises are standing before a special period with many breakthrough opportunities. However, opportunities will not automatically turn into results if the business environment is not improved, institutional bottlenecks are not removed in a timely manner, and enterprises themselves do not proactively innovate.
According to Mr. Hung, to achieve outstanding growth, both the public and private sectors need to change their governance mindset, improve implementation capacity and act more decisively. He emphasized the need to view the relationship between the State and enterprises as a partnership for shared development, because when enterprises expand investment, innovate technology, create jobs and increase budget contributions, the State also fulfills its socio-economic development goals.
Conversely, if enterprises face difficulties because of prolonged procedures, delayed project implementation or the continued existence of unofficial costs, it is not only enterprises that suffer losses; the economy also loses a driver of growth.
According to Mr. Hung, the biggest bottleneck today does not lie in policy orientation but in the implementation stage — from slow processing of documents and inconsistent interpretation of regulations among localities to small procedures that can cause enterprises to lose business opportunities.
He also said the effectiveness of reform must be tested right at the grassroots level, where enterprises interact directly with the administrative apparatus every day. If localities implement policies well, enterprises will feel the change very quickly. Conversely, if implementation is sluggish, major policy directions will struggle to enter reality.
According to the representative of Tan Hiep Phat, every reform is truly meaningful only when it produces specific results, such as shortening administrative processing time, reducing costs for enterprises, resolving obstacles and opening up more business opportunities, thereby creating new value for the economy and raising workers’ incomes.
Mr. Nguyen Duy Hung assessed that the Vietnam Private Economy Report and the Provincial Competitiveness Index (PCI) not only reflect the reality of the business environment, but also help identify bottlenecks, measure reform effectiveness and spread good implementation models at the local level. This is also an important source of data for management agencies to continue improving mechanisms and policies, while helping enterprises enhance transparency, improve governance and move toward more sustainable development.
| “Tan Hiep Phat’s partnership with VCCI in the Vietnam Private Economy Report and PCI program is not only support for research activities, but also a corporate responsibility to help build a transparent, effective and modern business environment, thereby improving the competitiveness of the private economic sector and the Vietnamese economy in the new stage of development,” Mr. Nguyen Duy Hung affirmed. Tan Hiep Phat is one of the leading enterprises in Vietnam’s beverage sector, founded in 1994. Over more than three decades of development, the company has built a diverse product ecosystem with familiar market brands such as Zero Degree Green Tea, Number 1 and others, serving not only the domestic market but also gradually expanding into many countries. In addition to production and business activities, Tan Hiep Phat has also actively participated in programs accompanying the Government and organizations such as VCCI to promote the development of the private economic sector, enhance national competitiveness and move toward sustainable development. |
