State Firms and the Party's Role

How Vietnam combines a market economy with Communist Party rule and state-owned enterprises, and the 2024-25 anti-corruption campaign and reforms.

Vietnam calls its system a “socialist-oriented market economy”.

The Party’s role

The Communist Party holds political power.
Markets determine most prices, and private firms are growing.

State-owned enterprises

SOEs dominate sectors like energy, telecom (Viettel), banking and airlines.
Many SOEs were equitised (partly sold) since the 1990s, but the state keeps control in key sectors.

Private sector growth

Vingroup (conglomerate, including VinFast electric cars), FPT (IT) and others grew large.
In 2025, the Party issued a resolution calling the private sector the most important driver of the economy.

Anti-corruption campaign

The “blazing furnace” campaign led by former Party chief Nguyễn Phú Trọng prosecuted many officials and executives, including in 2022-24. It also slowed decision-making as officials feared approving projects.

Government restructuring

In 2025, Vietnam merged ministries and provinces, cutting the number of provinces sharply to reduce bureaucracy.

The cautious official

During the anti-corruption campaign, an official delays approving an infrastructure project, fearing any decision could later be investigated.

Thinking Vietnam has no markets because it's communist

It runs a market economy under one-party rule.

Key takeaways

Vietnam is a socialist-oriented market economy.
SOEs dominate key sectors; private firms are growing.
The anti-corruption campaign slowed decisions.
2025 reforms merged ministries and provinces.