President Yoon's visit opens new chapter in Vietnam-South Korea relations

ROK President Yoon Suk Yeol's three-day visit to Vietnam last week heralds further improvement in bilateral economic relations between the two nations.

The Vietnam-South Korea Business Forum on June 23. Photo: Vietnam News Agency

President Yoon was in the company of high-level Korean officials and more than 200 business leaders. Many were from multinational companies such as Samsung, LG, SK, Hyundai Motor and Lotte.

According to Oh Young Ju, the South Korean Ambassador to Vietnam, this is the largest business delegation to travel abroad with the President, indicating that the two nations will see further development in economic, investment, and business relations.

During the President's visit, a business forum between 500 Vietnamese and Korean enterprises was held on June 23 to discuss opportunities between the two nations' business communities.

The two sides signed more than 100 agreements to increase the presence of Korean businesses in Vietnam and further facilitate the entry of Vietnamese businesses into Korea.

Vietnamese Prime Minister Pham Minh Chinh said he hopes Vietnamese and Korean enterprises will make breakthroughs in the future to increase bilateral trade by three to four times.

He also thanked South Korean businesses for contributing to Vietnam's growth over the past three decades.

For his part, President Yoon highly appreciated the potential between the two countries in economic and investment partnership, highlighting the goal of reaching US$150 billion in bilateral trade by 2030, nearly double the figure in 2022.

Do Nhat Hoang, Director General of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said South Korean capital inflow into Vietnam had increased remarkably over the past 6-7 years.

"South Korea is the largest foreign investor community in Vietnam, with accumulated registered capital of US$82 billion," he said.

"Tens of South Korean investors have been queuing up and waiting to come to Vietnam. Their projects are worth hundreds of millions to billions of US dollars," Hoang said. "Vietnam is still the first destination that flashes in the mind of this country's largest corporations."

Among the South Korean conglomerates, also known as chaebol, is LG Group. The group's chairman, Koo Kwang Mo, has pledged to invest US$5 billion to expand operations in Vietnam, bringing its accumulated capital to about US$12.5 billion.

SK Group is expected to spend about US$1.3 billion in Vietnam's renewable energy sector, while CJ Group plans to do business in veterinary medicine, biotechnology and energy.

Comprehensive strategic partnership

During his visit to Vietnam, South Korean President Yoon Suk Yeol and Vietnamese leaders announced the 17-point action plan to implement the Vietnam-South Korea comprehensive strategic partnership, which was agreed in December 2022.

The Action Plan will be valid for five years until June 23, 2028, and will be automatically extended six months before its expiration if neither side requests to terminate the agreement.

Among the 17 solutions to promote two-way relations, the two governments will strive to increase the value of bilateral trade to US$100 billion as soon as possible and to US$150 billion by 2030.

South Korea will provide Vietnam with about US$200 million to implement official development assistance (ODA) projects in environmental protection, climate change, healthcare, education, digital transformation, and unexploded ordnance clearance between 2024 and 2027.

The East Asian nation will also provide US$30 million in non-repayable loans to Vietnam over 10 years to support Vietnam's key industries through technology transfer.

In addition, Vietnam will receive US$2 billion in loans from the Korea Economic Development Cooperation Fund (EDCF) and US$2 billion from the Korea Economic Development Partnership Fund (EDPF) between 2024 and 2030 to implement transportation projects such as highways, railways, and urban rail.

Over the past 30 years, Vietnam and South Korea have made significant progress in bilateral relations. The two nations established diplomatic relations on December 22, 1992. Vietnam opened its embassy in South Korea in March 1993.