19 state-owned firms' sales match 5th of Vietnam GDP

Their combined equity was worth VND1.15 quadrillion, up 10% from 2018 when they were transferred to the SCIC, Pham Van Son, head of the sovereign fund’s general department, said.

Oil and gas giant Petrovietnam and coal mining company Vinacomin last year reported the highest revenues in their history.

State-owned companies play an important role in a number of key sectors.

For instance, Vietnam Electricity, Petrovietnam and Vincomin account for around 87% of the country’s total electricity supply.

State-owned firms also account for around 84% of the retail fuel market.

But Son said these companies have yet to reach their full potential or produce hi-tech products that could transform the economy.

Deputy Minister of Planning and Investment Do Thanh Trung said these companies, despite holding large amounts of assets, have not been able to compete globally.

The SCIC needs to be make them efficient at utilizing their assets worth VND1.1 quadrillion ($45.08 billion).

Economist Vo Tri Thanh said to achieve that goal state-owned companies need to change their operation structure.

"They should operate as investors similar to fund management companies."

The investment ministry has called on the government to adopt a sandbox model for state-owned companies to test new technologies and products.

Trung said: "We need to learn from global state-owned companies to be flexible in managing state funds."

Industries such as offshore wind energy, green hydrogen and semiconductor need the participation of large state-owned enterprises, he added.

"State-owned companies should do the big, difficult and new things to stimulate economic growth while allowing room for private companies to grow."