Vietnam's Government is to reduce costs and rules for private businesses in order to boost the economy and help companies become more competitive.

At an economic forum held in Hanoi last week by the Vietnam Chamber of Commerce and Industry (VCCI), vice chairman Hoang Quang Phong said the government is cutting up to 50% of unnecessary business licences with immediate effect.

According to the Government's Steering Committee for Enterprise Innovation and Development, Vietnam's private sector has grown strongly, with nearly 620,000 operating enterprises, contributing to 40% of GDP. It attracts some 51% of the nation's labour force and generates about 1.2m jobs per year, Vietnam.net reported.

Yet challenges remain, related to the country's economic model, mainly based on cheap labour and low investment in technology. This is despite an increase in efficiency and productivity, the forum heard.

Speakers warned that Vietnamese businesses need to ensure they are not exploited when Vietnam participates in bilateral or multilateral free trade agreements and that companies readjust their business and work ethics to avoid litigation or penalties upon entering important markets such as Japan and the European Union. Companies were urged to "take the initiative" to improve competitiveness.

Statistics from the VCCI show Vietnam's economic targets set by the Government for 2017 are "plausible", although forecasts for 2018 highlight issues faced by domestic enterprises that are still limited in capacity and competitiveness.