[Gettyimages Bank]
SEOUL -- Viet Nam has solidified its position as one of South Korea's key trading partners within the ASEAN region, ranking as the third-largest partner. Likewise, South Korea has become one of Viet Nam's most important economic allies, ranking first in investment and second in development cooperation, trade, and tourism. Recent data shows that by the end of 2022, South Korean investments in Viet Nam surpassed $4 billion, spanning over 370 projects. Bilateral trade between the two countries reached $66.65 billion in 2019, $65 billion in 2020, $78 billion in 2021, and nearly $87 billion in 2022. With their relationship upgraded to a comprehensive strategic partnership, experts predict that trade volume will reach $100 billion this year and target $150 billion by 2030.
Given their shared historical and cultural similarities, Viet Nam plays a vital role in South Korea's "New Southern Policy." Viet Nam's advantageous factors, including the region's fastest economic growth, abundant resources, skilled workforce, and favorable demographic structure, have positioned it as a key player in the region. The South Korean government envisions deeper collaboration with Viet Nam in various sectors where South Korea excels. Recently, during the 2nd Vietnam-South Korea Deputy Prime Ministerial Dialogue on Economic Cooperation held in Hanoi on March 3rd, 2023, both countries discussed and reached a consensus on significant cooperation in five key areas: trade, energy and infrastructure, development cooperation, information technology, and communication, as well as start-ups, investments, health, and labor.
Notably, bilateral and multilateral cooperation mechanisms, such as the Vietnam-South Korea Bilateral Free Trade Agreement (VKFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP), have effectively facilitated economic ties. These mechanisms provide diverse frameworks for cooperation, including multidisciplinary collaboration and sector-specific partnerships at various levels. Viet Nam's key exports to South Korea include agricultural and aquatic products, seafood, and seasonal fruits, while electronic products and industrial raw materials are among its primary imports from South Korea.
Presently, around 8,000 South Korean enterprises are involved in production and trade activities in Viet Nam. Leading corporations, banks, financial institutions, and investors such as Samsung Electronics, Lotte, Hyosung, LG, Hyundai Motor, CJ, Daewoo E&C, GS E&C, Doosan, and KDB Bank have invested tens of billions of dollars in Viet Nam. These South Korean businesses have made significant contributions to Viet Nam's socio-economic development, generating employment opportunities and modernizing local infrastructure. It is estimated that South Korean enterprises account for approximately 25% of Viet Nam's total export value, with Samsung alone contributing about one-fifth of the country's export turnover, amounting to tens of billions of dollars annually. South Korean investors primarily focus on the processing and manufacturing industries, followed by the real estate and construction sectors.
Viet Nam's favorable investment environment continues to attract South Korean businesses seeking to expand their operations. Areas of interest for South Korean investors include environmentally friendly infrastructure development, clean energy, finance, and agriculture in provinces such as Bac Ninh, Hai Phong, Hanoi, Dong Nai, Thai Nguyen, and Ho Chi Minh City. The Vietnamese government, state agencies, and relevant entities have affirmed their commitment to providing favorable conditions and support for South Korean businesses, especially in the fields of digital technology, electronics, renewable energy, and infrastructure development.
The Korean Business Association in Viet Nam acknowledges the country's stable business and investment environment, stricter legal frameworks, and attractive incentives for foreign investors. However, to attract larger projects with higher value and advanced technology from South Korean investors, the Vietnamese government aims to enhance its comparative advantage by improving supporting policies, legal frameworks, and preferential schemes. This collaboration between Viet Nam and South Korea is anticipated to enter a new era, marked by an increase in projects focusing on supply chain development, high technology, and more.
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