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South Korea is just the fourth country to have such ties with the country after China, Russia, and India. Upgrading relations to a comprehensive strategic partnership will reinforce the high-quality investment capital inflow from South Korea to Vietnam, analysts said.
The move is an opportunity to foster South Korean capital in Vietnam and focus on sci-tech and innovation, digital and green economy, clean energy, smart cities, and eco-industrial parks.
Korea-Vietnam ties reach top-tier status, photo Le Toan
The two countries will emphasise digital platforms to open up investment opportunities and business connections. South Korean businesses are encouraged to establish research and development centres in Vietnam and share digital transformation and corporate governance.
The framework to celebrate the 30th year of diplomatic relations has a dense schedule of cultural exchange events, and especially investment promotion programmes to connect business communities of the two countries. In December, a delegation of senior leadership will take a business trip to South Korea, which promises to have many cooperation and investment agreements signed by businesses in the two countries.
“Vietnam encourages South Korean companies to invest and expand their operations in the country, in digital technology, renewable energy, infrastructure development, construction of industrial zones, and development of high-tech agriculture,” said Prime Minister Pham Minh Chinh at the meeting with South Korea’s Minister of Foreign Affairs Park Jin on October 18.
During the past 30 years, South Korea has been a leading partner of Vietnam, especially in terms of investment. Meanwhile, Vietnam is a centrepiece of South Korea’s New Southern Policy.
For the first nine months of this year, South Korea was the second-largest investor in the country with a total registered capital of more than $3.8 billion, accounting for 20.3 per cent of total funding capital in Vietnam.
Of more than $3.8 billion invested in Vietnam, South Korea has more than $749 million in newly registered capital and $2.67 billion in adjusted capital.
This wave from South Korea played a key contribution in hiking the disbursement of capital in the first 10 months. Notably, between January and October, 880 existing projects added a total capital of $8.74 billion, up 13.4 per cent in the number of projects and 23.3 per cent in quantity.
Three additional projects from Samsung accounted for one-quarter of the total adjusted capital. They combine two ventures by Samsung Electro-Mechanics Vietnam in the northern province of Thai Nguyen worth $1.18 billion, and $841 million from Samsung Electronics CE Complex in Ho Chi Minh City.
At last week’s Vietnam-Korea Economic Cooperation Conference held by the Ministry of Planning and Investment in collaboration with the South Korean Embassy to Vietnam, the two parties discussed cooperation for the next period, in which investment cooperation will be the key sector. Along with various traditional fields such as manufacturing, energy, culture, education, and tourism, the two parties will strengthen the investment in ICT and smart city development.
Nguyen Thanh Tuyen, deputy director general of the ICT Industry Agency under the Ministry of Information and Communications, said the two sides signed an MoU to promote cooperation in ICT, post and telecommunications, e-government, and broadcasting.
“Going forward, we expect that there will be more Vietnamese companies participating in the South Korean electronics/ICT supply chain, and their investors will also increase the localisation ratio in Vietnam. This should see more training courses and technology transfer of emerging technologies from South Korea to Vietnam.”
Regarding the smart city sector, the South Korean side pledged to support Vietnam in improving institutions and legislation on smart city development, applying technology in developing the construction industry, and enhancing the capacity of crucial planning agencies.
On October 11, the Ministry of Construction and the South Korea’s Ministry of Land, Infrastructure, and Transport held a launch ceremony for a project on establishing the Vietnam-South Korea Cooperation Centre on smart cities and construction technology.
The project aims to establish a professional centre to promote research and training in smart cities and advanced construction technologies to contribute to developing smart cities in Vietnam. The programme will gradually solidify Vietnam’s guidelines and policies in promoting sustainable smart city development by 2030 and strengthen the bilateral relationship.
Newly-appointed South Korean Ambassador to Vietnam Oh Young-Ju said, “Vietnam is a comprehensive and strategic partner of South Korea. It is stepping into the next stage of its development journey; thus, the bilateral relationship needs to have a breakthrough transformation. As the new ambassador to Vietnam, I will contribute to reinforcing the cooperation between the two countries.”
Tran Quoc Phuong-Deputy Minister of Planning and Investment
Over the past 30 years, Vietnam-South Korea cooperation has continuously developed in width and depth. The two countries have become strategic partners in almost all fields. Economic cooperation has always been an important pillar and bright spot in this cooperation. Leaders of the two sides will continue to promote the development of the cooperative relationship.
In a rapidly changing world, the two countries are good examples of strategic cooperation in new fields such as supply chains, digital transformation, innovation, climate change, and healthcare. Exchanges and contacts between senior leaders are maintained regularly.
South Korea remains one of the largest investors in Vietnam, with over 9,000 companies and accumulated investment capital of $80 billion, accounting for nearly 20 per cent of the total foreign direct investment, representing an 80-fold increase since 1992. It is second in official development assistance, with a total capital sum of $4.2 billion, and third in trade, with an import and export turnover reaching $78 billion in 2021.
The two sides will continue to improve the quality of economic, trade, and investment cooperation and strive to reach a bilateral trade turnover of $100 billion by 2023 and $150 billion by 2030. To realise these targets, the two countries will try to boost the investment capital inflow and foster commercial cooperation.
Vu Tien Loc-Chairman, Vietnam-South Korea Friendship Association
The Vietnam-South Korea relationship is a typical one with high efficiency between a developed country and a developing country. With cultural similarities, a burning entrepreneurial spirit, and a mutually complementary economic structure, the relationship between the two countries will have strong development steps in the future for the benefit of both sides, because the two nations are not only partners, but also brothers in the big family.
This year marks 30 years since establishment of diplomatic relations between Vietnam and South Korea, marking the past cooperation journey and opening a new stage of comprehensive development with higher quality.
Vietnam is in the process of industrialisation, building key industries and approaching the latest trend of Industry 4.0, while South Korea is a successful feat of this process with many valuable lessons learned.
Many leading South Korean enterprises have chosen to invest in Vietnam over the years. South Korea is also one of the countries leading the wave of foreign direct investment, contributing to turning Vietnam into a factory in the global economy. I hope that South Korea will continue to lead in this, creating conditions for Vietnam to participate more deeply in the global economy.
Hong Seung Hee-Sales and Marketing director Apull Power Co., Ltd.
There are many expert analyses on why we should invest in the country. Vietnam, from the perspective of studying, working as an investor, and conducting environmental-related businesses, tries to gather the opinions of the people. It is also a place where the government has the will to achieve national development, and the youth wants to see growth.
The reason for success in Vietnam is because of the people, and the reason for failure is also the people. I hope more South Korean companies will continue achieving economic success through exemplary management that protects the environment and develops employees. Rather than a general real estate industrial complex, the government or other companies should focus on projects with a cause, such as eco-industrial complexes.
From strength to strength in South Korean investment
Bilateral trade between Vietnam and South Korea has been on an upward trajectory for several years. Min Moonki, commercial attaché of the South Korean Embassy to Vietnam, spoke with VIR’s Hoang Oanh about long-term investment plans and the hopes to elevate ties to even greater heights.
South Koreans setting sights on expansions
Although Vietnam is well-placed both geographically and geopolitically to take advantage of South Korean investment waves, administrative procedures and supporting industries require further improvements in order to fully capitalise on them.
