VCCI launches PCI 2.0 and first Business Performance Index

Ho Sy Hung, chairman of VCCI (centre), presents awards to leaders of five localities with top PCI 2025 scores. Photo by H.Y.

At a ceremony on May 15, the Vietnam Chamber of Commerce and Industry (VCCI) released the Private Sector Economic Report 2025 and introduced the Provincial Competitiveness Index (PCI) 2.0, marking a major transition for the competitiveness index. The event coincided with the first anniversary of Resolution 68-NQ/TW on private sector development.

After 21 years of implementation, this year's report features the largest methodological upgrade to date with the launch of PCI 2.0 and the debut of the Business Performance Index (BPI). It is based on surveys of 3,546 domestic private enterprises, 586 foreign-invested firms, and 1,001 business households across 34 provinces and cities, making it one of the largest and most in-depth studies of Vietnam’s private sector in recent years.

PCI 2.0 has been redesigned around nine component indices and 98 indicators, including market entry, access to resources, transparency, administrative compliance costs, informal charges, fair competition, business support policies, legal institutions, and facilitating governance.

Rather than publishing conventional rankings, this year VCCI grouped provinces and cities into six categories of governance quality, reflecting the differing conditions following provincial mergers and aligning with international practices. The national median PCI score reached 63.9 out of 100, indicating that reform momentum has continued nationwide.

The report honours the five most noteworthy localities, including Bac Ninh, Danang, Haiphong, Phu Tho, and Quang Ninh. These leading localities shared a common point in balanced governance structures, with at least five of the nine component indices ranking among the country’s top 10.

Bac Ninh leads the country in facilitating governance (6.67 points) and administrative compliance costs (8.93 points), while Danang ranks first in market entry conditions with 8.70 points. Haiphong posted exceptional results, with seven of its nine component indicators among the Top 10. Phu Tho ranks second nationwide in access to resources. Quang Ninh maintained strong performance in fair competition and facilitating governance.

Bac Ninh leads in Proactive Governance (6.67 points) and Administrative Procedure Compliance Costs (8.93 points). Danang leads the country in Market Entry with 8.7 points. Haiphong impressed with 7 out of 9 sub-indices placing in the top 10 highest localities. Phu Tho ranks second nationwide in Resource Access. Quang Ninh continues to maintain its high position in Equal Competition and Proactive Governance.

This year, VCCI launched the BPI for the first time, consisting of 23 indicators evaluating two core dimensions – the development level of the private sector and innovation capacity. While the PCI measures institutional inputs, the BPI measures market outputs.

The pilot results of BPI 2025 show Ho Chi Minh City in first place with 5.67 points, followed by Hanoi with 5.41 points and Quang Ninh with 5.33 points. The national median score was 4.20. Correlation analysis indicates a statistically significant link between PCI 2022 and BPI 2025, confirming a policy impact lag of about three years. This provides an important foundation for pursuing a long-term reform roadmap rather than expecting immediate results.

Speaking at the event, Ho Sy Hung, chairman of VCCI, said, "The Vietnamese private sector has moved beyond a defensive phase, is accumulating internal strengths, and is preparing for a new phase if the three biggest impediments – market access, access to capital, and policy transparency – are addressed within the next 12 to 18 months. PCI 2.0, along with BPI, will help measure local governments' governance quality and innovation capacity more deeply in the new era."

According to its chairman, this is the first year VCCI has published a comprehensive report outlining the overall picture of the private economy. This reporting period marks a new transformation phase with the upgrade to PCI 2.0 – the most complete version in the project’s history. It is also the first reporting period featuring 34 provinces and cities post provincial merger.

By the end of 2025, Vietnam had more than one million active enterprises, up 6.6 per cent on-year. Along with approximately 6.1 million household businesses, the private sector generates employment for around 26 million workers, accounting for 50.2 per cent of total employment nationwide.

In 2025, the number of newly established businesses reached a record 297,500 enterprises, up 27.4 per cent from the previous year. About 85.7 per cent of businesses maintained or expanded their operations, reflecting a cautious but positive sentiment within the business community after the challenging period of 2023 and 2024.

For businesses to make greater advancements, the VCCI chairman said, "The issue now is no longer a lack of policy, but how policies are implemented so businesses can truly feel the changes. To achieve the goal of two million enterprises by 2030, Vietnam must shift from a management mindset to a partnership mindset, and from reducing administrative burdens to strengthening competitiveness."

This marks a major shift in governance thinking. Over the past 20 years, PCI has helped local governments process procedures faster. In the next phase, PCI 2.0 and BPI will measure governments’ ability to create fairer markets, support businesses more effectively, and govern more proactively.

Provincial trio topping PCI rankings Despite the remarkable improvement of Vietnam’s cities and provinces to enhance competitiveness, many issues are remaining for them to lure in more investment.

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