Vietnam–S.Korea ties strengthened after 28 years of diplomatic relations

The year of 2020 marks the 28^th anniversary of the establishment of Vietnam – South Korea diplomatic relations and 30^th anniversary of South Korea starting to provide official development assistance (ODA) to Vietnam.

While 28 years are not a long period of time, the bilateral relations have taken long strides and are now at its peak.

Smartphones production at Samsung Electronics Vietnam, one of the country's largest FDI companies. Photo: Thanh Hai.

South Korea – largest investor in Vietnam

“Vietnam – South Korea relations are growing strongly in all spheres, which have brought mutual benefit and trust to all parties involved and resulted in a comprehensive strategic partnership,” stated Vice Minister of Planning and Investment Tran Quoc Phuong.

As of October, South Korea is Vietnam’s largest investor with 8,900 ongoing investment projects in the country worth a combined US$70.4 billion.

Moreover, South Korean companies continue to be a major part of Vietnam’s economy and contribute 30% of total exports in the first nine months of 2020. Meanwhile, Vietnam currently has 49 investment projects in South Korea with a modest capital of US$35.24 million, in which the majority are in fields of science, technology, mining, manufacturing and processing.

Vietnam is also a priority partner of South Korea and makes up 20% of the latter’s ODA support globally. In recent years, aids from South Korea for Vietnam total over US$300 million annually, in which 90% are ODA loans and 10% in forms of non-refundable aid.

Key fields in Vietnam – South Korea cooperation are transport and urban infrastructure; healthcare; education; green energy and IT, among others.

During the 2016 – 2020 period, major principles for Vietnam – South Korea cooperation are stipulated in the latter’s Country Partnership Strategy (CPS), with a focus on enhancing state governance capability, education, water, healthcare and transportation.

In addition to ODA, South Korea is willing to provide preferential loans for Vietnam via financial cooperation mechanisms to fund large scale infrastructure projects.

S.Korea’s government encourage more investments in Vietnam

South Korea’s Deputy Minister for Economic Affairs Lee Seong–ho noted the South Korean government is encouraging its major corporations to explore the possibility of investing in Vietnam, especially in fields of hi-tech, electronics, renewable energy and infrastructure development.

As the two countries are maintaining close relations in industry – energy, infrastructure, agriculture, justice, finance – banking, among others, both are set to continue boosting cooperation further, noted Mr. Lee.

Mr. Lee expected the Vietnamese government to continue supporting South Korean investors to expand or invest in the country as the world’s economy is struggling against the Covid-19 pandemic.