How have South Korean-Vietnamese economic ties, especially trade and investment, been developing during the pandemic?
|Shon Young Il, chairman of the Korean Chamber of Commerce and Industry in South and Central Vietnam |
Since establishing diplomatic relations in 1992, the relations between South Korea and Vietnam have been rapidly developing, especially since ties were upgraded to a 21st century full partnership in 2002 and a strategic cooperative partnership in 2009.
During the June 23 meeting between South Korea’s Foreign Minister Chung Eui-yong and Vietnam’s Minister of Foreign Affairs Bui Thanh Son, the two sides decided to push for a step up from the current strategic partnership to mark the 30th anniversary of diplomatic ties in 2022.
For this purpose, a group will be formed around prominent figures in South Korea-Vietnam relations to create specific plans for enhancing bilateral relations.
From an economic point of view, South Korea remains the number 1 foreign investor with a cumulative foreign direct investment of $70 billion between 1988 and 2020. Based on closer economic cooperation between two, 2019 trading volume recorded about $69.2 billion, which is about 40 per cent of the total trading volume between South Korea and ASEAN. In addition, while trading volume with other countries declined due to the pandemic in 2020, thanks to close cooperation the volume between our two countries reached about $69.1 billion, similar to the 2019 level.
Vietnam has a dynamic golden population structure and has extensive free trade agreements with many countries. These points can be the driving force behind South Korea’s continued investment in Vietnam in the future as well.
Despite the impact of COVID-19, South Korean group like SK Group, Samsung and LG continue to pour capital into the market. In addition, there are many startups venturing into the Vietnamese market. What trends have you noted in such investment in Vietnam?
We appreciate Vietnam’s potential and invest not only in light industries such as textile and garment and footwear industries but also in high-tech industries such as electronics, medicine, energy, chemistry, IT, software, and also finance. SK and LG, which are making more active investments despite the difficult situation, are preparing for post-pandemic activity to achieve full-fledged growth.
Furthermore, intending to achieve $100 billion in bilateral trade, South Korean companies are interested in various sectors, including agri-forestry-fisheries, and hope that these companies with high technology will join Vietnam’s major national projects, including new airport constructions and liquefied natural gas power plants.
Vietnam is also expected to expand bilateral relations by strengthening strategic cooperation in various fields including culture, education, tourism, and sports, in addition to economic cooperation as a key partner in our New Southern Policy.
As Vietnam is currently experiencing its latest wave of the coronavirus, how are South Korean businesses planning to overcome the challenges?
We believe that Vietnam has wisely overcome several COVID-19 crises so far and that it will overcome the current wave this time as well.
Currently, South Korean companies sympathise with the preemptive measures and responses implemented by Vietnamese authorities, and South Korean companies and workers will continue to actively participate in the “5K Movement”, the basic guidelines for corporate/labour activities.
In addition, we will continue to work hard on preventive activities by distributing manuals such as corporate quarantine guidelines and how to deal with a confirmed infection to such companies. Also, we will be regularly updating the leaders of such groups regarding the COVID-19 situation and cooperate with them.
Vietnam is accelerating its vaccination campaign. What are the contributions and expectations of South Korean businesses from this campaign?
Enterprises hope to get vaccinated quickly and they want to know the government’s accurate vaccination plan and the schedule of their vaccinations.
Currently, workers in Ho Chi Minh City and industrial complexes are getting vaccinated, however, many companies are still anxious about the continuing spread of the virus in the city and the surrounding areas.
Some Vietnamese workers are afraid of the vaccination due to the potential side effects so it is imperative for companies to continue communications to explain that the safety offered by vaccination far outweighs the side effects.
Regarding the recent fundraising campaign for the Vietnam vaccine fund, South Korean companies are actively working to protect their businesses and workers. Despite the difficulties suffered by many companies due to the pandemic, many are either joining or planning to join according to their circumstances.
Many South Korean companies including Samsung, LG, SK, Hyosung, Shinhan Bank, and CJ Group have already participated with an amount exceeding VND150 billion ($6.5 million), including donations from companies with current donation plans.
Finally, a confirmed infection at the workplace can put inordinate burdens on a company due to isolation and long-term lockdown. Having to suspend work, they may not be able to meet orders and deadlines, which could lead to substantial financial difficulties and even bankruptcy.
Therefore, we think it is the right time to take flexible lockdown measures in line with the Vietnamese government’s directions of safeguarding the economy while fighting the pandemic.