 |
| Vietnam is the leading production base of the Korean "eagle" Samsung. (Source: VnEconomy) |
Top Important Partner
Korea is one of Vietnam's leading important partners, ranking first in investment, second in ODA, and third in trade. Total bilateral trade turnover in 2022 reached 87 billion USD, up 11.4% compared to 2021.
In recent years, South Korea has been the second largest tourist market for Vietnam, with an average of more than 1,000 direct flights between Vietnam and South Korea each month. In 2019, the number of South Korean tourists to Vietnam reached 4.2 million, an increase of 23.1% compared to 2018; and the number of Vietnamese tourists to South Korea reached 550,000, an increase of 21.9%. The number of South Korean tourists to Vietnam in the 2020-2021 period decreased due to the impact of the Covid-19 pandemic but increased again from the beginning of 2022.
South Korea is also the second largest labor receiving market for Vietnam, while Vietnam is the second largest labor sending country, after China. Vietnam currently has about 48,000 workers working in South Korea.
In an article on June 22, the Korea Herald talked about the expectations that the delegation of Korean businesses brought with them when accompanying President Yoon Suk Yeol to Vietnam. A major event gathering leading businesses from both countries took place today, June 23, and is expected to see billion-dollar deals signed and exchanged.
Vietnam is currently South Korea’s third largest trading partner, behind only the world’s two leading economies, the US and China. Leaders of both sides have set a target of raising bilateral trade turnover to US$100 billion this year, an increase of about US$13 billion compared to 2022.
Commenting on President Yoon Suk Yeol's visit to Vietnam this time, Professor Choe Won-gi, Head of the ASEAN-India Studies Department, Korea National Diplomatic Academy (KNDA), said that the visit is very meaningful because Vietnam is the first Southeast Asian country that President Yoon Suk Yeol visited after taking office. This shows the very important position of Vietnam for Korea.
According to the Professor, Vietnam has been very successful in economic development, but to achieve higher economic growth, Vietnam needs to upgrade its industrial base, for example in high value-added industries such as high-tech industries and industries serving the fourth industrial revolution. In this regard, Korea can support the Vietnamese economy to take off and move to a more industrialized economic stage.
Always on top, constantly growing
According to information from the Ministry of Planning and Investment, as of May 2023, Vietnam has attracted 37,238 valid foreign direct investment (FDI) projects, with a total registered capital of 447.65 billion USD from 143 countries and territories around the world.
Of which, South Korea leads with 9,666 projects, with a total registered capital of 81.5 billion USD. Next are countries such as: Singapore with 3,240 projects, with a total registered capital of 73.384 billion USD; Japan with 5,091 projects, with a total registered capital of 69.628 billion USD...
In the first 5 months of 2023 alone, according to the Foreign Investment Agency (Ministry of Planning and Investment), Korean investors "poured" 666.52 million USD into Vietnam, which is the registered capital of 167 new investment projects, 122 capital adjustment projects and 364 projects contributing capital and purchasing shares of investment projects in Vietnam.
Statistics also show that Korean investment capital in Vietnam has grown continuously over the past 10 years. Specifically, in 2013, Korean investment capital only reached 3.8 billion USD, but after only 1 year, it nearly doubled, with 6.1 billion USD in 2014, becoming the largest foreign investor in Vietnam.
Not only growing rapidly, Korean investment in Vietnam is also continuously stable. For example, in 2015, Korean investment capital in Vietnam reached 6.72 billion USD, then in 2016 it was 7.0 billion USD; 2017 it was 8.49 billion USD and 2018 it was 7.2 billion USD; 2019 it was 7.92 billion USD... and so on, in the 10-year period (2013-2022), Korean investment capital in Vietnam has grown from 3.8 billion USD to 81.5 billion USD, an increase of more than 20 times.
Not only has the quantity of Korean investment projects increased, the quality of Korean investment projects has also seen positive growth. Previously, Korean investment projects in Vietnam were mainly small and medium-sized, but now there have been many projects from leading Korean corporations with projects worth billions of USD such as: Samsung, LG, Posco, Keangnam... Among them, some Korean corporations are considering Vietnam as their global production base, a typical example of which is Samsung. Samsung is not only the largest Korean investor but also the largest foreign investor in Vietnam.
 |
| Prime Minister Pham Minh Chinh attended the inauguration ceremony of Samsung's Research and Development (R&D) Center in Vietnam. (Source: VGP) |
At the end of 2022, Samsung inaugurated the group's largest R&D (research and development) center in Vietnam and Samsung Electronics achieved an export turnover of 65 billion USD in Vietnam, accounting for more than 9% of the country's total export turnover. More than 60% of Samsung phones sold globally are manufactured and assembled at the group's factories in Vietnam.
This enterprise has planned to invest an additional 3.3 billion USD in Vietnam, of which 2 billion USD has been invested in projects in Thai Nguyen and Ho Chi Minh City. It is expected that by the end of this year, Samsung will mass produce semiconductor chip grid products at its factory in Thai Nguyen.
Similarly, LG Group also plans to pour an additional 5 billion USD into Vietnam in the near future; Lotte Group is in the process of completing Lotte Mall Hanoi and building the smart complex - Lotte Eco Smart Thu Thiem; SK is still a major foreign investor in two large Vietnamese corporations, Masan and Vingroup; Hyundai Motor inaugurated the Hyundai Thanh Cong No. 2 factory in Ninh Binh at the end of last year...
Recently, on June 12, at the Hai Phong - Korea Investment and Trade Promotion Conference 2023, held in Seoul (Korea), Hai Phong City leaders awarded investment registration certificates to 4 projects with an investment capital of 230 million USD to the projects Bumhan Vina Heavy Industries - Nam Dinh Vu, Haewon Vina Co., Ltd., Hala Electronics Vina Co., Ltd., EST Vina HaiPhong Co., Ltd., and signed cooperation agreements in the coming time with a committed investment capital of up to 1.5 billion USD.
Along with that, Korean enterprises have supported Vietnamese enterprises to participate in the global supply chain when more than 250 Vietnamese enterprises have become tier 1 and tier 2 vendors for Samsung Group... In particular, with the appearance of nearly 10,000 investment projects, Korean enterprises have created a huge number of jobs for domestic workers, contributing positively to the socio-economic development of Vietnam.
Vietnam's "attraction" It can be said that Korean investment in Vietnam has increased continuously and steadily over the years. In 2022, due to the global economic downturn and the impact of geopolitical conflicts around the world, FDI capital from Korea to Vietnam decreased, but this is still a partner with new investment decisions and increased expansion. Notably, while some foreign investors are "shrinking", investors from Korea are still accelerating their expansion and applying for new licenses in Vietnam. Specifically, Korean investors account for 20.4% of new projects, 32.6% of adjustments and 34.1% of capital contributions and share purchases. Economist, Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competitiveness Research, commented that a large Korean business delegation of more than 200 members visiting Vietnam this time shows that the Vietnamese investment environment has many factors that attract investors. Notably, in this delegation, there are many high-quality investors. |
Economic relations between Korea and Vietnam have made significant progress over the past three decades. We predict that bilateral trade will double to $150 billion by 2030. Kim Bong-man, Head of International Affairs at the Federation of Korean Industries (FKI) Perhaps businesses from the land of kimchi are looking to move and expand their business network in financial and medical services... in the Southeast Asian region, possibly taking Vietnam as a "hub"? If Vietnam has appropriate proactive policies and attracts effectively, FDI capital from Korea in the high-end service sector will increase sharply in the near future. Assoc.Prof.Dr. Nguyen Thuong Lang - National Economics University In the context of the current shift in the global supply chain, many countries have emerged, in Southeast Asia there are Vietnam, Indonesia... Therefore, the fact that more than 200 Korean enterprises have come to Vietnam is an opportunity for them to learn and research how to turn Vietnam into a production center for the products in which they have strengths such as electronics and mechanics, in order to supply the global supply chain to G7, G20 countries... This is a wide-open opportunity for Vietnamese enterprises and economy. Dr. Le Duy Binh, CEO of Economica Vietnam Korean enterprises are highly appreciating Vietnam’s investment and business environment, especially the green growth strategy that Vietnam is aiming for. In addition, Korean investors are also interested in high-tech sectors in Vietnam, such as semiconductor chip and car battery manufacturing. Hong Sun - Chairman of the Korean Business Association in Vietnam (Kocham) |
Source
Comment (0)