Econ
Strengthening Vietnam - RoK economic relationship
Vietnam and the Republic of Korea are celebrating the 25th anniversary of their diplomatic ties this year. Vietnamese and Korean diplomats have praised the rapid, sustainable, practical and comprehensive development of bilateral cooperation over the past quarter century, particularly the economic results.
Both nations established diplomatic ties on December 22, 1992. In August 2001, the two countries signed a Joint Statement on “The Vietnam- Republic of Korea Comprehensive Partnership”. They upgraded their ties to strategic partnership during Korean President Lee Myeong Bak’s visit to Vietnam in November, 2009.
Economic cooperation between Vietnam and the Republic of Korea has developed rapidly over the past 25 years. RoK is the largest investor out of 112 countries and territories investing in Vietnam. Last year, Korea exported much more to Vietnam than to Japan. Processing, manufacturing, real estate, and construction are among the 19 areas where Korea is investing in Vietnam.
Pham Huu Chi, Vietnamese Ambassador to the Republic of Korea, said “In 1992, economic cooperation was almost nil. But by the end of last year, two-way trade reached more than US$42 billion. The Republic of Korea’s investment in Vietnam was US$50 billion." Vietnam is the Republic of Korea’s biggest ODA recipient. The Republic of Korean ODA projects in Vietnam are effectively implemented and promptly disbursed.
The two sides are discussing the signing of a Framework Credit Agreement in the 2016-2020 period under which Korea will provide US$1.5 billion worth of ODA to Vietnam. Korean Ambassador to Vietnam Lee Hyuk said “The rapid growth of bilateral ties due to the mutual economic support mechanisms.
Many Korean enterprises have shifted their investment in China to Vietnam. Vietnam has a young, skilled, and hard working labor force while Korea has capital and the world’s leading technology. The combination of the two countries’ advantages has boosted bilateral economic ties.”
Ambassador Kee Hyuk said, “Many Korean enterprises have praised Vietnam as the world’s most favorable investment destination and Korean investment into Vietnam will continue to rise. I encourage Korean investors not only to gain profit but also support Vietnam’s economy and create social benefits for Vietnam. Economic groups, and small and medium sized enterprises exercise social responsibility while doing business in Vietnam. As Korea’s Ambassador, I serve not only the Republic of Korea but also Vietnam”.
The two countries have maintained bilateral economic cooperation through the Inter-governmental Committee for Economic, Scientific and Technological Cooperation, and the Ministerial Joint Committee for Cooperation in Nuclear Power, Energy, and Industry. The bilateral Free Trade Agreement, which came into force on December 20, 2015, has created new momentum for raising bilateral trade to US$70 billion by 2020 under an agreement signed in 2003.
In the past 25 years, Korean investment in Vietnam has mainly focused on labor. In recent years, leading Korean technological groups including Samsung, LG, and Hyosung have increased investment in high technology in Vietnam. Since 2008, Samsung invested in two factories in Thai Nguyen and Bac Ninh province that produce 150 million mobile phones each year. Samsung, LG, and other global economic groups have enabled Vietnamese enterprises to participate in the accessories and spare part supply chain.
