Leader visit heralds fresh Korean ties

Vietnamese State President Vo Van Thuong (right) met with his counterpart Yoon Suk-yeol, Photo: VNA

During last week’s state visit to Vietnam by South Korean President Yoon Suk-yeol, both nations have vowed to apply new mechanisms to continue boosting their trade and investment ties, with a focus laid on supply chains for core minerals, renewable energy, innovative science and technology, and smart cities, as well as finance and banking.

“The focus of this visit is strengthening economic cooperation with Vietnam, which is South Korea’s third-largest trading partner,” said South Korea’s principal deputy national security adviser Kim Tae-hyo. “To stimulate bilateral economic activities, we will review institutional bases and expand prospects for bilateral cooperation to those new areas.”

An economic delegation of over 200 South Korean businesspeople last week accompanied President Suk-yeol and attended the Vietnam-South Korea Business Forum in Hanoi. Many of them, including top leaders of Samsung, LG, Lottee, SK, and Hyundai are planning to invest heavily into Vietnam in sectors such as infrastructure, smart urban areas, renewables, sci-tech, IT, finance and banking, and the environment, among others. Their projects will also contribute to expanding trade between both economies, according to the Korea Chamber of Business in Vietnam (KoCham).

Ministries and agencies betweenboth countries last week inked 17 cooperation deals on economic cooperation, trade, finance, official development assistance, labour, natural resources and environmental protection, and marine police cooperation.

Latest figures from the General Department of Vietnam Customs released over a week ago showed that the Vietnam-South Korea trade turnover in the first five months of this year reached $29.32 billion, including Vietnamese exports of $9.2 billion, down 10.7 per cent on-year, and imports of $20.12 billion, down 27.7 per cent on-year. Last year, both countries’ total trade turnover hit $86.4 billion, up 10.4 per cent on-year. Vietnam and South Korea have agreed on a plan to improve the quality of economic, trade, and investment cooperation, with efforts to be made through devising more favourable policies so as to increase the bilateral trade turnover to $100 billion this year and $150 billion by 2030.

Figures from Vietnam’s Ministry of Planning and Investment showed that accumulatively as of May 2022, total registered investment capital from South Korea into Vietnam sat at $79 billion for 4,290 projects. However, just one year later, the capital value and the number of projects rose to $81.56 billion and 9,670 – continuing to make the northern Asian nation the largest foreign investor in Vietnam, especially in the context of increased difficulties seriously affecting investors’ confidence.

In the January-May 20 period, total newly registered and newly added capital and stake acquisition and capital contributions from South Korean investors in Vietnam reached $666.5 million, up 32.4 per cent on-year.

Hong Sun, chairman of KoCham, explained to VIR why South Korean investment into Vietnam has kept increasing. “Vietnam’s investment and business environment has been significantly improved. One of the most important factors of an investment market is favourable legal regulations so that foreign investors can carry out investment and business projects,” Sun said. According to Sun, Vietnam’s investment and enterprise laws have been continuously adjusted in a way that is more favourable to investors and helps the country bring in more foreign investment. Also, the legal provisions in the relevant laws highlight the incentives for investors with large projects and in the fields of investment priority.

Besides a rise in newly registered capital, previously invested businesses are also stepping up their activities in Vietnam. Specifically, Samsung Electronics invested more than $20 billion into Vietnam so far. Of this, 29 per cent has been implemented in the past six years. Meanwhile, LG Group has poured over $5.3 billion in Vietnam in the sectors of home electronics, camera modules, and automotive electronics. LG is expected to invest another sum of over $4 billion into building smartphone manufacturing centres. For Lotte Group, Vietnam is considered this group’s global base as the nation is now home to 19 company vendors of Lotte operating in segments such as shopping centres, supermarkets, hotels, duty-free shops, and goods. Besides the $900 million smart complex project in Thu Thiem of Ho Chi Minh City, Lotte also invested over $252 million to build Lotte Mall Hanoi. Lotte Group chairman Shin Dong Bin has reaffirmed that the group will continue expanding investment in Vietnam.

Elsewhere, Daewoo E&C Group is also planning to expand investment in many different sectors including real estate development projects, new urban development, industry, logistics and infrastructure, and energy projects in Vietnam.

Vietnam, RoK exchange 17 cooperation documents President Vo Van Thuong and his visiting counterpart from the Republic of Korea (RoK) Yoon Suk Yeol witnessed the exchange of 17 cooperation documents across fields between agencies of the two countries after their talks in Hanoi on June 23.

Vietnamese, RoK leaders attend Vietnam-RoK business forum Prime Minister Pham Minh Chinh and President of the Republic of Korea (RoK) Yoon Suk Yeol attended the Vietnam-RoK Business Forum in Hanoi on June 23, with over 500 delegates representing associations, corporations and businesses of the two countries taking part.