South Korea Remains a Crucial Economic Partner of Vietnam

For more than three decades since the diplomatic relationship was established between Vietnam and the Republic of Korea (RoK), the two nations have become increasingly important and intertwined partners in a range of areas. With this in mind, the two countries are picking up the pace in December 2022 by officially upgrading their ties to a "comprehensive strategic partnership," with the economy identified as the most paramount sector.

RoK Retains Vietnam's Important Economic Partner
Samsung Electronics Vietnam factory in Bac Ninh was established in 2008. Photo: VGP

Vietnam and RoK’s economic cooperation gains many achievements

According to Deputy Minister of Foreign Affairs Nguyen Minh Vu, currently, the RoK ranks first in terms of direct investment in Vietnam, second in official development assistance (ODA), labor and tourism, and third in commercial cooperation.

Vietnam is also RoK’s largest economic partner in ASEAN, accounting for 30% of investment and 50% of total trade turnover between the RoK and ASEAN. This shows that the relationship between Vietnam and the RoK developed effectively and substantively, bringing practical and concrete benefits to the people and businesses of the two countries.

Yoo Jeong Yeol, president of the Korea Trade-Investment Promotion Agency (KOTRA), said that the bilateral trade turnover between Vietnam and the RoK reached an all-time high of US$87.7 billion, making Vietnam the third largest trading partner of the RoK. So far, about 8,800 RoK companies are present in Vietnam.

About 205 Korean enterprises, including leaders of leading RoK corporations such as Samsung, Hyundai, and LG, will accompany RoK President Yoon Suk Yeol to visit Vietnam.

“This is the largest number of businesses in the recent foreign visits of the President, showing that the economic, investment and trade cooperation between the two countries develop rapidly and impressively,” Oh Young Ju, Korean ambassador to Vietnam said.

Towards cooperation in new fields

According to Yoo Jeong Yeol, President Yoon Suk Yeol’s upcoming visit to Vietnam will be a great opportunity for the parties to consider the direction of economic cooperation between the two countries and strategies for RoK companies to penetrate the Vietnamese market.

Currently, the RoK and Vietnam expand their complementary trade, focusing on intermediate goods and spare parts. The two countries need to pay more attention in upgrading their trade structure and strengthening the supply chain collaboration.

RoK Retains Vietnam's Important Economic Partner
The Korean Energy Agency develops renewable energy. Photo: iStock

If a RoK-Vietnamese supply chain network including core minerals, materials, and intermediate products is built on the basis of industrial cooperation, the synergistic effect in bilateral economic cooperation between the RoK and Vietnam is expected to be strong.

An important issue is the need to design a foundation for medium and long-term trade and investment by expanding trade in high-value-added consumer goods and services.

If in the past, investment cooperation between Vietnam and the RoK mainly focused on manufacturing, currently, the Governments and businesses of the two countries realized the importance of finding new collaborative projects.

In the upcoming visit, the fact that many RoK businesses accompany the President to visit Vietnam and participate in economic activities will open up many potential areas for cooperation in the future such as responding to climate change, environment, digital transformation, smart city development, and energy transformation.

This visit to Vietnam by RoK President Yoon Suk Yeol takes place from June 22 to June 24. This is a meaningful activity when taking place in the first year of the implementation of the Comprehensive Strategic Partnership between the two countries.

This is also the first state visit of RoK President Yoon Suk Yeol to Vietnam. Vietnam is the first Southeast Asian country to visit by the President of the Republic of Korea after taking office in May 2022.

Rosie Nguyen