Vietnam-Korea trade surges 117 times after 25 years of bilateral relations
Bilateral trade between Vietnam and South Korea now surges 117 times to US$58.5 billion compared with 1992 when the two countries established the bilateral ties, Le An Hai, Deputy Director of the Ministry of Industry and Trade’s Asia and Africa Markets Department.
In the 11 months of this year, the trade value rose sharply by up to 38 per cent, much higher than the 22-27 per cent average rate in the past years, Hai said.
Vietnam's import turnover from Korea in the 11 months was $42.52 billion, focusing on semiconductors, monitors, wireless communication devices, and electronic components.
The export turnover of Vietnam to Korea was $13.52 billion, making Korea rank second among Vietnam’s trading partners, only behind China. Vietnam currently has many key export staples to South Korea such as textile and garment with $1.8 billion, agriculture with $1.15 billion, phones with $4.5 billion and computers with $1.2 billion.
During the past 25 years, the export goods structure of Vietnam to Korea has also shifted from raw materials, primary agricultural and forestry products, and low value-added products to electronic goods, mechanical processing, processing agro-forestry products, and high-value-added consumer goods. The tag “Made in Vietnam” has become familiar in every electronic products of Samsung.
In machinery, over 90 per cent of raw materials and semi-finished products for domestic investment and foreign direct investment (FDI) enterprises for production and processing for export have been imported from Korea. This co-operation structure has been strengthening the competitiveness of Vietnamese goods and services in the region and around the world.
The 25 years of bilateral relations, with solid achievements and international integration, is an important premise to raise the two-way trade turnover to $100 billion by 2020.
South Korea’s investment capital in Vietnam now also increases to some $60 billion, 120 times higher than that in 1992. South Korean firms have invested US$8 billion each year in Vietnam in the past four years.
The investment capital flow in the 11 months of this year hit $8 billion, making South Korea become the top investor in Vietnam.
Nguyen Phu Binh, the first ambassador of Vietnam to Korea and former deputy minister of the Ministry of Foreign Affairs, said that besides economic achievements, the two countries could expand co-operation in culture, tourism, and education.
In 2017, there are estimated at two million Korean visitors to Vietnam, 0.7 million Vietnamese visitors to Korea, 0.2 million Vietnamese students and people living in Korea.
Ryu Hang Ha, chairman of the Korean Chamber of Commerce and Industry (KoCham), confirmed that investment and trade relations between the two countries have become increasingly important for both sides. Vietnam is an attractive destination, a foundation for Korean investors to enter ASEAN markets and export to the EU and the US.
Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said that the trade balance has not been equal. Vietnam has been running a trade deficit, despite the Vietnam-Korea Free Trade Agreement bringing opportunities for both sides.
It shows that the exploration capacity of Vietnamese enterprises in Korea remains weak. However, he believed that a Korean investment huge wave into Vietnam is absolutely possible with the emergence of new sectors, new technology, and skills.
Toan said that to evolve sustainable trade and investment relations, Korean investors should invest into sectors Vietnam is promoting in the coming time, such as high-tech agriculture, processing agri-fishery products for export, boosting technical transfer for Vietnamese firms and focusing on environmentally friendly projects.
