Second-tier cities

SOURCE: WIKICOMMONS

I lived a long time in Egypt, which for its history was generally centered around Cairo, but did have a large and important second city in Alexandria. With tourism, cities like Luxor and Aswan also became important. But the main city in the country was and is Cairo, both the administrative and economic capital of the country. It has taken all of the money and jobs from these other cities.

Many other countries have become increasingly like this. London continues to be the predominant city in the UK, and Paris in France. Germany actually has multiple centers, and the US is another alternative example, with many big cities: New York, Chicago, LA, SF, DC, Houston. Each has its own industry that attracts people, like Hollywood to LA and the government to DC.

I think it is helpful to have more than one big city: it increases competition among cities, it helps foster specialization. I believe that it is strategy for a country to be more inclusive to a larger group.

So this article about second-tier cities in Vietnam taking off raised my interest. It is mostly an article about Da Nang, which is in the middle of the country and is the fifth largest city in Vietnam.

The article is very anecdotal, mostly about difficulties recruiting people for jobs. I wanted to check and see if Da Nang really is growing as quickly as the article makes it out to be. I was able to find some good data sources.

The central coast city is growing, but not as fast as the provinces around HCMC. Since 2011, it has grown an average of 2.0% per year, the same as HCMC and faster than Hanoi, but much slower than Binh Duong (3.8%) and Dong Nai (2.3%).

ANNUAL GROWTH 2011-17. SOURCE: GENERAL STATISTICS OFFICE OF VIETNAM

The two large areas that are growing more slowly than the country as a whole are the Northern central area (everthing around Da Nang) that grew just 0.7% and the Mekong River Delta (0.4%). This is still very good growth. The US is growing about 0.6%, China the same, Germany 0.4%, while Italy and Japan are shrinking.

However, HCMC seems to be taking over so much of the country. It represents 14% of the country, once Dong Nai and Binh Duong are included. A similar calculation for Hanoi gets us to just 9.2%.

The mitigating factor is that while HCMC may get bigger and bigger, Hanoi is the center of the government, so it will always be important in its own right. Da Nang will likely continue to be the center of tourism, given strong investment there plus the closeness of Hoi An and Hue.

My recommendation to Vietnam is to build up smaller cities. This will take some of the pressure off HCMC and allow for more representation by people that may be feeling left out of the strong growth that the major cities are seeing.