In a sprawling development in Hanoi, Vietnam's largest conglomerate is embarking on a first-of-a-kind infrastructure project for a domestic private company in the communist state. Vingroup is laying the groundwork for a high-speed rail line on a site that already has towering apartment blocks and luxury villas constructed by another group subsidiary. Cars and bikes produced by another Vingroup unit swarm the busy roads.

Awarding the contract for the $5.6bn bullet train project — a 120km line that will run from Hanoi to tourist destination Ha Long Bay and cut travel time from two-and-a-half hours to 30 minutes — to Vingroup marks a huge policy shift. Normally, such contracts have been given to state-owned companies, but the homegrown industrial group is the kind of diversified, heavy-hitting conglomerate that Hanoi is betting on to propel its next wave of growth.

With the global trade regime under threat from US tariffs, it wants to transform an economy that is overly reliant on exports and foreign direct investment. As part of sweeping bureaucratic and economic reforms, To Lam, Vietnam's most powerful leader in decades, is attempting to replicate South Korea's chaebol model to create national champions. The idea is to prioritise them for big projects and facilitate their access to land and financing.

Resolution 68, last year's government decree on bolstering the private sector, targets the creation of at least 20 large enterprises capable of participating in global value chains by 2030. It elevates the private sector to 'the most important driving force of the national economy' after having played second fiddle to state-owned enterprises and foreign companies. The aim is to double the number of private sector enterprises to 2mn by 2030.