Consolidating Vietnam-Korea Economic Ties

10:29:26 AM | 12/20/2022

Since diplomatic relations were established 30 years ago, despite numerous twists and turns in the world and the region, the economic cooperation between Vietnam and the Republic of Korea has always grown strongly and substantively, and become an important pillar in the bilateral cooperation ties.

Currently, Vietnam and Korea have become leading economic partners. Vietnam is Korea's largest economic partner in ASEAN, accounting for 30% of its investment in ASEAN and 50% of its total trade value with ASEAN. Meanwhile, Korea is Vietnam's third largest trading partner after China and the United States, with the two-way trade value reaching US$78 billion in 2021, and the largest FDI partner in Vietnam with nearly 9,400 projects and more than US$79.8 billion of registered investment capital. Korean businesses have been investing in 19 out of 21 economic sectors and 59 out of 63 localities, making positive contributions to Vietnam's structural transformation and economic growth. Korean corporations such as Samsung, LG, Hyundai, Posco and Lotte have become very popular names to Vietnamese people. At the same time, Vietnam is a key partner in the "New Southern Policy" of the Republic of Korea.

These achievements have first of all come from the fine bilateral relationship, built on political trust as well as solidly consolidated legal and political foundations. In 2001, the two countries established the "Vietnam-Korea Comprehensive Partnership of the 21st Century”. In 2009, the relationship was upgraded to the "Strategic Partnership". The two sides signed the Vietnam-Korea Free Trade Agreement in 2015 and most recently, on December 5, 2022, issued a joint statement on the elevation of their relations to the "Comprehensive Strategic Partnership." Secondly, the two economies are complementary. The third factor is the dynamism and effective cooperation of businesses of the two countries, coupled with the cultural similarity and closeness of the two countries.

Over the past 30 years, VCCI has persistently fostered Vietnamese and Korean business cooperation. Facilitated by close relationships with Korean partners such as the Embassy of the Republic of Korea, the Korea Trade-Investment Promotion Agency (KOTRA), the Korea Chamber of Commerce and Industry (KCCI) , the  Korea Federation of SMEs (KBIZ), the Korean Chamber of Business in Vietnam (KORCHAM) and Korean companies, VCCI has met well the trading needs of businesses and industry associations of the two countries; and successfully organized many trade and investment promotion programs, and business delegations that escorted senior leaders of Vietnam on their visits to Korea. Every year, VCCI leads 15-20 business delegations from both countries looking for business cooperation and investment opportunities.

President Nguyen Xuan Phuc and President Korea Yoon Suk Yeol witness the signing of many cooperation documents during his state visit to the Republic of Korea 

In 2022, VCCI together with Korean partners has organized many significant events to celebrate the 30th anniversary of bilateral diplomatic relations. In June 2022, VCCI President led a Vietnamese business delegation to attend the 30th Maekyung Global Forum and the Vietnam Investment Promotion Conference in Seoul, Korea. In December, VCCI cooperated with KBIZ to open the "Baekdu Forum in Vietnam 2022" in Quang Nam province and collaborated with KORCHAM to open the "Vietnam-Korea Economic Forum" in Hanoi.

There remains considerable room for development in the Vietnam-Korea relationship. Vietnam is a fast-growing, dynamic economy that plays an important role in the ASEAN region and the global production chain. Vietnam's GDP in 2022, according to the IMF's forecast, ranks 38th in the world. Vietnam has the world's leading open business and investment environment with 17 free trade agreements (FTAs) signed. Along with political stability, abundant and quality human resources and quickly upgraded transport infrastructure and digital transformation, Vietnam is emerging as a new production center of the world and a very attractive destination of the world to FDI flows. Up to now, companies from 139 countries and territories have invested over US$420 billion in Vietnam.

With a global geopolitical perspective and a vision that Vietnam is aiming to become a developed and high-income country by 2045, there is much room for economic cooperation, business and investment opportunities for Vietnamese and Korean companies, especially in processing, manufacturing, high-tech, digital, smart city, electronics, green economy and circular economy, among other industries. The success of Vietnamese enterprises in deeply participating in the supply chains of Korean corporations that invest in Vietnam will also make an important contribution to the long-term success of Korean corporations in Vietnam. For that reason, I appeal to the Government and businesses of the Republic of Korea to pay more attention to technology transfer and support Vietnamese enterprises to deeply participate in these supply chains.

Nearly 10,000 Korean companies are doing business and nearly 200,000 Koreans are living and working in Vietnam. More than 200,000 Vietnamese people are living in Korea. With great cultural similarities, plus 30 years of cooperation achievements and in the spirit of "Working together to the future", I am absolutely confident about the bright future of economic, trade and investment cooperation and of the Win2Win business cooperation between the two countries.

2022 witnessed the 30th anniversary of Vietnam-Korea diplomatic relations and began a new chapter of development with bigger goals. Given what has been achieved, with the determination of the two governments, and the close cooperation of relevant agencies and business communities, the Vietnam-Korea partnership promises to grow strongly and contribute to the common prosperity of the two countries. As a national representative of the business community in Vietnam, VCCI is committed to continuing to provide more effective support for businesses of the two countries, actively fostering trade and investment cooperation and elevating the two-way relationship to new highs.

Pham Tan Cong - VCCI President