South Korea companies feel settled doing businesses in Vietnam
Vietnam is an attractive investment destination for South Korean businesses, with the production of electronics, pharmacy, cosmetics, and leather.
Head of the Korea International Trade Association (KITA) in Ho Chi Minh City Lee Dong-Won told The Hanoi Times his view on why South Korea has been among top investors in Vietnam for years.
Which fields and sectors in Vietnam are attracting investment capital from South Korean investors?
Vietnam is currently an attractive investment destination for South Korean companies in the fields of electronics, pharmacy, cosmetics, or leather production. The reasons behind such a trend are logical, such as the hardworking people, high productivity, and abundant workforce that make it easy for companies to hire.
From our observation, South Korean investors are mostly concentrated in the southern provinces of Dong Nai and Binh Duong. These are the two provinces with modern transport infrastructure and the production hubs in the country.
Dong Nai is home to large-scale industrial companies, while those of medium and smaller size choose Binh Duong, based on the advantages of each city/province.
|Garment production at Panko Vina Company in My Phuoc Industrial Park in Binh Duong Province. Photo: The Hanoi Times|
What are the strong points in trade and economic cooperation between businesses from the two countries?
For years, Vietnam has been importing electronics parts and accessories from South Korea to make high-quality TVs, smartphones, or home appliances, which later are exported back to South Korea or other countries.
But now, the close economic cooperation between Vietnam and South Korea has been extended to other sectors, such as garment, leather bags, or fashion.
The tourism sector has been touted as a potential field for bilateral cooperation, what is your view in this regard?
This is a highlight in Vietnam-South Korea's economic relations. In the pre-Covid-19 period, the number of Vietnamese tourists coming to South Korea has been on the upward trend, while those from South Korea to Vietnam account for nearly half of South Korean tourists traveling to East Asian countries.
Danang has been a good example in attracting South Korean tourists to Vietnam, as we in South Korea are often told of its beautiful landscapes and friendly people.
I expect the Vietnamese Government to soon upscale investment in the tourism sector to make it the growth spearhead of the economy in the post-pandemic period.
|Head of the Korea International Trade Association (KITA) in Ho Chi Minh City Lee Dong-Won at a cultural event in Binh Duong Province.|
Vietnam and the world are now striving to live with the pandemic. What would you recommend to businesses to grasp new opportunities ahead of economic recovery?
In times of lockdown, people around the world can still meet each other via social networks or other digital platforms, while online study or shopping is now people's preferred way rather than face-to-face.
Countries may reopen their economies, but that process would take time and would not happen overnight. So during the first phase, the online environment should remain the focus of businesses. This is both an opportunity for IT businesses and also those in other sectors to take advantage of the Internet in their search for new customers and recover from the pandemic.
South Korea remained Vietnam’s second-largest investor in the first two months of 2022 with registered capital of US$1.5 billion, behind Singapore at $1.7 billion.
The East Asian country, however, stands firm as Vietnam’s top FDI source to date with over $78.4 billion pouring into the country, or 18.7% of the total, thanks to major names such as Samsung, LG, Lotte, and Hyundai.
Samsung is currently the largest foreign investor in Vietnam with an accumulated FDI commitment of US$19.2 billion, with the latest being an injection of $920 million to upgrade the factory of Samsung Electro-Mechanics Vietnam in the northern province of Thai Nguyen in mid-February.
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