In the project to build an international financial center in HCMC, the city clearly defines its goal to become a “HUB” – a convergence point to attract intermediaries, capital flows, businesses (DN), and global private individuals.
International Experience Consultation
During the European business trip just before Tet Nguyen Dan, Prime Minister Pham Minh Chinh chaired a dialogue on “Potential and Investment Opportunities in the Vietnamese Financial Market” in Davos, Switzerland. International financial experts attending the dialogue assessed Vietnam as a potential financial center, converging many factors for the development of a modern financial market, aiming to form a highly interconnected financial center that can make a breakthrough in this field.
During the dialogue, Prime Minister Pham Minh Chinh expressed the desire for global corporations and investment funds to share their experiences and provide consulting on choosing the appropriate development model and solutions to develop a financial center in Vietnam. Especially, consulting on comprehensive development policies, regulations, and solutions for the financial ecosystem, including digital banking, digital payments, digital transactions, green finance, carbon credit exchange, commodity exchange, foreign exchange exchange.
The Prime Minister hopes that foreign partners, with their reputation, experience, and influence, will accompany and support Vietnam in the process of improving the national credit rating, enhancing standards of accounting, auditing, financial reporting, creating an important foundation for the successful development of an international financial center in the future.
 HCMC has great potential to become the financial center of the region and the world. Photo: HOÀNG TRIỀU |
Also at the dialogue, the Prime Minister agreed to establish a Task Force to research, consult, and build the financial center in Vietnam. The task force is chaired by TS Philipp Rösler – former Deputy Prime Minister of Germany of Vietnamese origin, Minister of Planning and Investment Nguyen Chi Dung, and Chairman of HCMC People’s Committee Phan Van Mai.
Earlier, in October 2023, the Government also established a Steering Committee to build the project, with Deputy Prime Minister Le Minh Khai as the head of the committee.
At the above dialogue, Chairman of HCMC People’s Committee Phan Van Mai emphasized the plan to form a regional financial center by 2030. In 2024, HCMC must submit a legal framework to the National Assembly for this center and continue to update and supplement it.
Regarding the new developments in the project of HCMC international financial center, on February 18, in an exchange with the reporter of Nguoi Lao Dong Newspaper, an expert participating in the project’s advisory and research team stated that the city continues to synthesize appropriate models to improve the legal framework and propose mechanisms for the center. When there is a policy framework, specific implementation will be carried out to attract strategic investors. It is expected that this year, HCMC will officially submit the project to the Government and the National Assembly.
Mr. Nguyen Ngoc Hoa, Chairman of the Board of Members of State Financial Investment Company of HCMC – the unit assigned to build the project of HCMC international financial center, has repeatedly emphasized the urgency of building an international financial center. According to him, HCMC has gone through 2 waves of investment. With its scale and new role in the current context, HCMC needs to create a third wave of investment, including creating a capital market.
“Currently, the capital from the banking system is not enough to meet the development needs of businesses. They need diverse and long-term capital to expand investment and development. The early establishment of an international financial center will be the foundation for HCMC to attract investment and provide strong and synchronized impetus for the development of related industries,” said Nguyen Ngoc Hoa.
According to HCMC Institute for Development Studies (HIDS), the city has great potential to become a financial technology (fintech) center of Southeast Asia and is planning policies to realize this potential. Specifically, HCMC has many advantages to develop into an international financial center, being the birthplace of the most important innovations in the country, such as the establishment of the first commercial bank, stock market, foreign exchange market, innovative ecosystem, startups… HCMC also leads the country in integrating and applying fintech.
Prioritizing Key Pillars
According to many experts, to build the international financial center in HCMC, it is necessary to implement synchronized plans such as: developing financial technology – fintech; digital banking and digital financial transactions; developing derivative commodity markets; issuing management regulations and a strong legal framework…
Associate Professor Dr. Nguyen Huu Huan, University of Economics HCMC, stated: The international financial center located in HCMC needs to be built differently from existing international financial centers. If it is born later and does not have a different path, it will not be attractive enough to attract investment flows from around the world.
One advantage that HCMC has is building a fintech center, allowing controlled experiments (sandbox) related to blockchain, AI, IoT…, which will attract more financial and technology corporations.
“A fintech center cannot stand alone but needs to be combined with international trade centers. For example, Singapore is a financial center combined with an international transshipment center by sea and air. With its position and role, HCMC can combine with the Long Thanh airport under construction and the planned international super port in Can Gio in the future to create advantages to support the international financial center,” analyzed Associate Professor Dr. Nguyen Huu Huan.
Dr. Nguyen Anh Vu, Head of Finance Department – Banking University HCMC, believes that an international financial center is not an organization or an existing area, but should be understood as an ecosystem that includes investors, capital mobilization organizations, financial institutions, financial service providers… When there are a large number of international investors and institutions, international capital mobilization will be easier. When a convenient ecosystem for international transactions is built, the state will collect service fees, taxes…, making finance a service sector that accounts for a large proportion of GDP.
“HCMC should not build an international financial center but create favorable conditions for the operation of the ecosystem. When these conditions are favorable, participants will gradually be attracted. The initial conditions that the state needs to create are building a legal system, regulations, and principles appropriate to the operation, establishing some basic markets, trading floors (stock, derivatives, commodity, foreign exchange…), human resources, material facilities, and technological infrastructure,” analyzed Dr. Nguyen Anh Vu.
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Strong Legal Support for Fintech Startups According to HIDS, to achieve the goal of becoming a fintech center of Southeast Asia, HCMC needs to clarify its strengths and weaknesses compared to other countries in the region. Along with that, HCMC must actively function as a fintech center of the region – developing more diverse types of financial products, having a strong legal system to support fintech startups, and having clear conditions and management systems for the development of startups. HCMC also needs to prioritize technology, infrastructure connectivity, develop human resources, and have a long-term strategy starting now. |
(To be continued)
Linh Anh Phuong An Son Nhung
