Vietnam – South Korea relations take great stride after 30 years: Expert

Vietnam- South Korea relations have taken a great stride in all spheres, especially in economic, social, and cultural aspects, after 30 years of diplomatic relations (1992-2022).

Production at Samsung, one of the largest foreign companies in Vietnam.

Lee Han-woo, a research professor at the Sogang University in South Korea, told the Vietnam News Agency on the occasion of the launch of the book titled “30 years of economic and cooperation between Vietnam and South Korea.”

Lee, one of the authors of the book, noted this is the time to reassess the bilateral relations from a broader view and set the vision for the next 30 years.

According to Lee, for over 30 years, economic cooperation has been a highlight of Vietnam-South Korea relations, with trade turnover rising by 150-fold to approach the US$100-billion target set for 2023.

Meanwhile, South Korea remains one of the largest investors in Vietnam with over 9,000 companies and accumulated investment capital of $70 billion, accounting for 18.5% of total foreign direct investment (FDI) and representing an 80-fold increase since 1992.

Lee noted it is no doubt South Korea’s FDI has made a key contribution to Vietnam’s economic growth but pointed out the increasing number of small-scale FDI projects in the country since 2018.

In 2020, small-scale investment projects with less than 200 employees made up 90.7% of total FDI from South Korea, and those with investment capital of below $10 million contributed 91.7% of the total.

This resulted in an average capital of $7.56 million for each FDI project.

Vietnam is currently South Korea’s fourth-largest trading partner and  South Korea is Vietnam’s third-largest.

South Korean businesses are employing over one million Vietnamese and make up 30% of the country’s total exports, or 10% of the GDP.

To ensure sustainable economic partnership in the future, Lee called for the two countries to promote cooperation mechanisms of mutual benefits. In this context, South Korean businesses operating in Vietnam should not focus purely on economic gains, but also contribute to the development of Vietnam in general, including the local business community, Lee said.

Meanwhile, Lee expected the Vietnamese Government to provide support for all businesses regardless of their size, for which the two Governments should further exchange views and cooperate on policy formulation to promote business development.

Lee noted one of the priorities for cooperation in the coming time would be to ensure the development of the domestic businesses so that they could play a key role in spurring economic growth rather than the foreign-invested sector.

According to Lee, Vietnam is in the right direction in calling for high-quality projects that focus on technology transfer and higher added value, which are the steps for Vietnam to deepen its role in the global value chain.

In addition, both countries should work together to address Vietnam’s high trade deficit of around US$30 billion.

Lee also mentioned the people-to-people exchange as a driver for cultural cooperation between the two countries, especially with the rising mobility of people between Vietnam and South Korea for working, studying, and living.

He referred to the coach of the Vietnamese national soccer team, Park Hang Seo, saying that he is an example of promoting cooperation between the two countries.

Lee, however, suggested that the Vietnamese government consider opening a  center in South Korea to promote culture, saying that not many South Koreans know about Vietnam, while Vietnamese are quite familiar with South Korea.