Although Vietnam has achieved exceptionally rapid growth of exports, “vent-for-surplus” production of agricultural commodities and labour-intensive manufactures has yet to stimulate the development of large-scale, technologically progressive firms. Foreign-invested and small domestic enterprises still dominate and rely heavily on imports of intermediate and capital goods. The absence of upstream and downstream industries can be explained at least in part by Vietnam’s unique transition from central planning. The state has not receded from economic life as much as reconfigure itself to benefit from market opportunities. Commercialization of the state has aggravated the long-standing problem of fragmentation, which has blocked government efforts to impose discipline on state agencies and enforce central government plans and regulations.