Vietnam’s Push for "Chip-to-Ship" Conglomerates Raises Red Flags

Two days after Vietnam’s top leader called on local private firms to help build national infrastructure, listed conglomerate Vingroup stepped forward to propose developing a $70-billion nationwide high-speed railway—and building the trains to run on it, Francesco Guarascio reported for Reuters.

Vingroup, best known for its property ventures, set up a new subsidiary in October to produce steel for civil works after submitting its railway bid. (Photo: Ministry of Transportation)

Communist Party leader To Lam’s appeal was part of a broader effort to strengthen the private sector under Resolution 68, a party blueprint issued in May that some analysts have dubbed “Doi Moi 2.0,” referencing the 1980s reforms that opened Vietnam’s economy.

Six months on, experts remain divided over its impact: some see new growth potential, while others warn it prioritizes state-backed “national champions” over liberalization, Phuong Nguyen and Khanh Vu also reported for Reuters.

The high-speed rail project—Vietnam’s most expensive infrastructure undertaking—has become both a test case and a source of financial concern, drawing rare criticism from the central bank and finance ministry, according to internal documents reviewed by Reuters.

Vingroup, best known for its property ventures, set up a new subsidiary in October to produce steel for civil works after submitting its railway bid.

Under its proposal, the state would fund 80% of the project through interest-free loans with decades-long maturities while covering land compensation costs.

In a May 19 opinion seen by Reuters, Vietnam’s central bank warned that Vingroup’s high leverage and lack of rail experience required special state guarantees “to ensure the safety of banking operations.”