Hanoi, HCMC maintain momentum as fast-growing cities

By Nguyen Quy   January 18, 2019 | 05:21 pm PT
Hanoi, HCMC maintain momentum as fast-growing cities
The Ben Thanh-Suoi Tien Metro Line lies to the right of major roads in HCMC's District 2. Photo by VnExpress/Huu Khoa
Vietnam’s two largest metropolises are among top 10 fastest growing cities in the world for the third year in a row.

However, Ho Chi Minh City has slipped five places from last year to eighth position on the City Momentum Index 2019 recently published by American investment management company JLL (Jones Lang LaSalle Inc.).

Vietnam’s capital city, meanwhile, has made major gains, climbing five places to third position in the ranking that covers 131 major established and emerging business hubs around the globe, and focuses on short-term momentum over a three-year period, tracking a range of socio-economic and commercial real estate indicators.

"Both cities perform very well for socio-economic momentum with fast-growing populations and economies," the report says.

HCMC, southern economic hub, has a reputation for being a business friendly destination, helping it attract more foreign direct investment and foreign companies.

The city of 13 million people attracted $6.22 in foreign investment in the first 10 months of last year, up 23.7 percent from a year ago, according to the municipal Department of Planning and Investment.

Hanoi, home to 8.2 million, achieved an average growth of 7.37 percent last year, the highest in the past three years. It also took the lead in attracting FDI for the first time with commitments of $6.5 billion.

The capital city sees science and technology key development factors in the coming years and expects to strengthen its retail sector and improve its transport infrastructure significantly by 2020.

The Cat Linh-Ha Dong metro line, the first in Hanoi, made its trial run last September and is expected to help ease heavy congestion triggered by the rapidly growing population.

Both Ho Chi Minh City and Hanoi are eyeing huge investments from large multinational technology firms, including Microsoft, LG, Intel and most notably Samsung, the JLL report says.

It also notes that Vietnam’s real estate investment market has been coping with issues such as low transparency and a limited volume of investment grade stock.

Asia Pacific is home to 19 of the top 20 cities in this year’s global index, reflecting the region’s continued rapid urbanization and economic growth.

Two other Southeast Asian cities are in the top 20, with Manila in 12th position and Bangkok placed 18th.

India dominated the rankings, with Hanoi the only non-Indian city to make it into the top five, joining Bengaluru, Hyderabad, Delhi and Pune.

Nairobi is the only city outside the Asia Pacific region to break into the top 10 ranks, thanks to huge investments from China, mainly in infrastructure projects.

A new study by the U.K.-based Oxford Economics in 2017 has predicted that Ho Chi Minh City would become the second fastest growing economy in Asia by 2021, with an annual growth rate of 8 percent.

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