The Republic of Korea is currently the biggest investor in Vietnam. In 2006, it recorded 207 projects worth US$2.78 billion in Vietnam. In addition to traditional industries, Korean businesses focus on construction, steel, electronics and machinery. During the recent visit of Party General Secretary Nong Duc Manh to Korea, businesses of the two countries have signed a series of agreements valued at nearly US$4 billion.
Korean businesses prefer doing business in Vietnam
Currently, Korean firms such as Posco, Samsung, Lotte, Kumbo and Asiana continue to make new investments in Vietnam. In the past 10 years, Vietnamese customers have been familiar with products of famous Korean companies such as electronics, refrigeration and automobiles. According to Mr Lee Han Chul, Chief Representative of the Korean Commercial Office (KOTRA) in Ho Chi Minh city, each day the office receives 2-4 requests from Korean businesses for information on the Vietnamese business environment including those operating in other countries interested in transfering to Vietnam. Information on Vietnam has been better provided by working visits between officials of the two countries. The survey conducted by Korean Trade and Investment Promotion Office in the past two months on 217 Korean companies operating in Vietnam shows that most big Korean companies investing in Vietnam are pleased with their business results.
With great potential in the local market and opportunities for expansion to other ASEAN countries by means of AFTA, Vietnam is more attractive to Korean businesses and investors. Another equally important factor is the similarities in culture that smooth the way for Korean investors to do business in Vietnam.
Promoting “comprehensive partnership in the 21st century”
At present, Korean GDP per capita is 28 times that of Vietnam. Korea is among few countries efficiently using foreign loans. One of the successes is the development of chaebols in late 1960s and early 1970s to increase competitiveness. Beside the establishment of task group and big investment projects by Posco, GS E&C, Doosan, etc., the chaebols also seek business opportunities through Vietnam-Korea business forum, “Vietnam Days in Korea” and “Korean Cultural Days in Vietnam”. Those activities strengthen the friendship and cooperation between the two countries.
During his visit to South Korea (November 14-16, 2007), beside official meetings, General Secretary Nong Duc Manh has met with the Korean business community including chaebols doing business in Vietnam or having long-term investments in Vietnam. At the meeting, representatives of the chaebols expressed the desire for cooperation in Vietnam. Mr Yong Nam, Vice-Chairman and CEO of LG Electronics said LG has always considered Vietnam a potential and strategic market. Beside the recent expansion of the LG factory in Vietnam on November 9, the company will establish a telephone production line in Vietnam in coming years. For his part, Mr Nong Duc Manh reaffirmed that Vietnam highly values the stable, long-term and comprehensive partnership with the Republic of Korea and will create more favourable conditions for Korean investors to continue stable and long-term business operation in Vietnam.
Today, with stable and dynamic development of the two countries, deeper Vietnamese economic integration and mutual trust and understanding, Vietnam welcomes and supports Korean companies in business activities, especially big projects, so that in 5-7 years the two-way trade value should reach the target of US$10 billion. The two sides will also increase high-level meetings, exchanges of missions and visits to promote economic cooperation, especially in investment, labour, shipbuilding, steel, sea-products, shipping, tourism and sport. The two sides will also find measures to maintain trade balance and become comprehensive partners in the 21st century.
Korea is currently the No. 1 investor in Vietnam with 1,855 projects under operation, investment capital of US$11.5 billion and implemented capital of US$3 billion. The two-way trade value in 2006 was US$4.7 billion (10 times that of 1992) with a Vietnamese trade deficit of US$3.02 billion.
Vietnam exports to Korea seafood, crude oil, timber and wooden products, coffee, rubber, coal, ceramics, garments and plastic products, and imports from Korea textiles, petroleum, machines and parts, materials for textiles and garments, leather and plastics. Some 45,000 Vietnamese workers are working in Korea, and 16,000 on Korean fishing boats.
Thuan Hoa
Vietnamese
