Korean Firms Place Investment Focus in Vietnam

Mr Ahn Sang Soo said many South Korean companies are tending to shift their investment from China into Southeast Asia, including Vietnam. Many large South Korean corporations have chosen it as a long-term development base because the country holds a lot of advantages such as costs, labour and land and importantly have many cultural similarities with South Korea.

 

Vietnam - South Korea ties are growing strongly, particularly driven by the wave of South Korean investment into Vietnam. According to statistics by the South Korean Embassy in Vietnam, have over 4,000 South Korean businesses are investing in Vietnam. He expects to see 10,000 businesses in the shortest time.

 

Dr Loc spoke highly of industrial development promotion policy of the South Korean Government. He added that South Korea is a typical country in the world successful in planning and applying industrial policies. Hence, Vietnam wishes to learn South Korea’s experience in building and developing industrial policies. The Government of Vietnam has been, and will be, pushing for reforms to improve the investment and business environment and draw more foreign businesses. Vietnam strives to be one of four ASEAN countries with the best investment environment in 2016.

 

Vietnam - South Korean relations have been upgraded to "Strategic partnership" level. For South Korea, Vietnam is one of the important development partners. This is the reason why the South Korean Government proposes the application of National Partnership Strategy (CPS) to Vietnam in the 2011-2015 period.

 

Vietnam and South Korea signed a bilateral free trade agreement (FTA) after two years with eight formal rounds of negotiations and eight rounds of chief negotiator negotiations.

 

According to VCCI, since the two countries established diplomatic ties, the two-way trade revenue has increased 54 times and investment value jumped 100 folds. Currently, thousands of South Korean businesses are investing in Vietnam and employing hundreds of thousands of Vietnamese labourers.

 

Vietnam - South Korea trade relations have substantially expanded in the past two decades. The two-way trade increased from US$500 million in 1992 to US$28.8 billion in 2014, representing an increase of 57 times in 22 years. In 2011, South Korea officially overtook Japan to become the second largest supplier of goods for Vietnam (after just China). In 2014, South Korea was the second largest trade partner of Vietnam and the two countries targeted at US$30 billion of trade revenue after 2015.

 

Vietnam runs a very big deficit in trade with South Korea. In 2013, Vietnam incurred a trade deficit of US$20.7 billion with South Korea, just after China (with US$36.9 billion). Key items that led to Vietnam’s trade deficit included computers, electronics products, machine components, telephones, fabrics and plastic materials.

 

Vietnam’s key imports from South Korea are computers, electronic products, machine parts, fabrics, telephones, fuels, input materials for garment and footwear industries, machines, equipment, petroleum, steel, automobiles, and plastic materials. Meanwhile, its major exports to South Korea are garments-textiles, crude oil, vehicles, seafood and wood products.

 

Currently, South Korea is the largest direct investor in Vietnam with US$38 billion. In December 2014, some big South Korean projects were licensed in Vietnam, including a second phase of US$3 billion Samsung Thai Nguyen high-tech complex invested by Samsung Electronics Vietnam Ltd in Yen Binh I Industrial Park, Thai Nguyen province; US$1.4 billion Samsung CE Complex invested by Samsung Asia Pte. Ltd - Singapore in Ho Chi Minh City; and a US$1 billion project invested by Samsung Display in Bac Ninh province.

 

South Korea’s investment projects are mainly engaged in processing and manufacturing, high tech, real estate, catering, construction, information and communication.