At present, South Korea is the second largest foreign investor in Vietnam (after Japan), after nearly 30 years since the establishment of diplomatic relations between the two countries. To deepen these traditional ties of friendship, recently, the Ministry of Planning and Investment of Vietnam, in collaboration with the South Korean Foreign Ministry and relevant agencies of the two countries, held the 13th session of the Vietnam - South Korea Intergovernmental Committee.
According to Deputy Minister of Planning and Investment Nguyen Chi Hieu, Vietnam - Korea relations are developing well in all fields of culture, society, economy, trade and investment. South Korea is also playing an important role in the economic development of Vietnam. In addition, the goal of this session is for the two sides to review the situation of cooperation between the two countries from the results of the 12th Session in 2010, thus to set out orientations and tasks for the next year. In this direction, specific parts will be implemented to promote cooperation in fields such as development cooperation, labour, environment, land, energy, infrastructure, agriculture and rural development, finance - banking, and the two countries' participation in regional and international cooperation.
As for trade cooperation, currently, South Korean is the fourth largest export market of Vietnam, with over US$6 billion in 2014 with main products being textiles, fisheries, oil and wood. It is also the second largest import market, with over US$20 billion in 2013 with products being mainly electronics, phones, fabrics, plastics, iron and steel, machinery, and equipment from Vietnam.
Besides, according to assessment by the Ministry of Planning and Investment, Korean firms are also interested in Vietnam, which can be seen in the growing number of Korean businesses coming to Vietnam to look for business opportunities in the past couple of years. According to statistics, South Korean investors are now present in 49 localities across the country, in which Hanoi, Dong Nai, Thai Nguyen, Bac Ninh and Long An have the largest number of South Korean investors. In addition, 90 percent of Korean projects are undertaken by small and medium enterprises (employing less than 500 people and with revenue under US$150 million a year), focusing on the field of processing and manufacturing. Major projects Korean businesses are involved in are in the field of light industry such as garments and shoe manufacturing. However, according to recent assessment, there has been a qualitative change as quite a few satellite enterprises for Korean small and medium enterprises have invested in Vietnam in the fields of high technology and electronic technology.
Although only accounting for about 5 percent of project number, South Korean investors account for over 70 percent in terms of registered investment capital in Vietnam in important industries such as processing and manufacturing, real estate business and construction, positively contributing to economic stabilization and development with brands including Samsung, Doosan, LG, Posco, Teakwang, Hyosung, and others.
On the other hand, in terms of development cooperation, South Korea is currently a major supplier of concessional refundable and non-refundable capital for Vietnam. Accordingly, for concessional loans, in the 2008-2011 period, South Korea has pledged to provide Vietnam nearly US$1 billion, mainly in the fields of transport, health and water supply. The two sides have completed the signing of the loan agreements. In 2012-2015 period, South Korea has pledged to grant preferential credit worth US$1.2 billion, so far the two sides have signed agreements worth US$660 million for a number of projects in transportation, health and education. On the basis of this cooperation, in the coming time, the South Korean side will provide less favourable loans to Vietnam in 2014-2016 period, which combined with export credit will be used for projects in large-scale infrastructure, energy, urban rail, airports and seaports. In addition, South Korea is also a key labour export market of Vietnam. Currently, some 7,000 Vietnamese employees Vietnam have been brought to South Korea.
Korean Deputy Minister of Foreign Affairs Ahn Chong Ghee expected that the existing cooperation between the two countries, along with the growth of trade, will help the two sides achieve the goal of trade turnover of US$70 billion by 2020. Besides, the two sides also need to accelerate the process of negotiation and the signing of a free trade agreement (FTA) between Vietnam and South Korea.
Within the framework of the session, the two sides discussed measures to further encourage big Korean corporations to invest in Vietnam and help Vietnam take advantage of opportunities and conditions for the development of supporting industry and human resources to meet the demands of South Korean investors in Vietnam. Management after licensing, investment expansion and the fact that Korean business owners leave Vietnam due to difficulties were also discussed by the two sides. In addition, in the investment promotion plan of 2015, Vietnam will strive to boost investment promotion activities in place, support businesses which already have investment projects in Vietnam as well as the dialogue mechanism with Korean business community, promote stable investment environment and commit to create the most favourable conditions for investors from South Korea.
Anh Phuong
Vietnamese
