South Korea and Vietnam move to buck pandemic

South Korea is a key investment source for Vietnam’s advanced tech ambitions, photo Le Toan

During her official visit to Vietnam last week – which was also the first by a South Korean senior official to the country since the spread of COVID-19 – South Korea’s Minister of Foreign Affairs Kang Kyung-wha and Vietnamese Prime Minister Nguyen Xuan Phuc agreed that the two nations will create the best conditions for experts, investors, and people from both sides to enter their own territories in order to increase the cooperation in tourism, investment, and trade.

Both nations are expecting to see bilateral trade turnover to rise to $100 billion in the near future following the normalisation of flights between them.

Minister Kyung-wha stated that many South Korean people wish to enter Vietnam to conduct business and investment, and also, many Vietnamese people want to enter South Korea for studies and doing business. Currently Vietnam is home to over 9,000 South Korean businesses operating in many sectors.

She hoped that the two countries will soon agree on a special entry process in order to facilitate experts, managers, and businesspeople from South Korea to enter Vietnam, with simplified procedures.

PM Phuc reaffirmed that Vietnam is creating favourable conditions for people coming from its partner country for those purposes as this is “necessary and beneficial to the two countries.”

Vietnam began resuming four routes to Guangzhou, Taiwan, Seoul, and Tokyo from September 15, and will do the same with Laos and Cambodia from September 22. The reopening of routes is expected to welcome 20,000 foreign visitors in the first month.

Currently Vietnam has facilitated over 6,000 South Korean experts to enter its territory amid complicated COVID-19 developments.

South Korean Ambassador to Vietnam Park Noh-wan said at the first ROK-Vietnam strategic dialogue titled “ROK-Vietnam relations: deepening the strategic cooperative partnership” recently organised in Hanoi that the two nations have succeeded in reining in COVID-19, and a new co-operation framework needs to be worked out, so that they can further enhance their existing strategic partnership forged in 2009.

During PM Phuc’s official visit to South Korea last November, President Moon Jae-in stressed that Vietnam is a key partner in South Korea’s New Southern Policy, and that his country “wishes that both nations continue boosting the bilateral ties to a new height.”

However, the Vietnamese side has yet to reveal any plan to reach such a comprehensive strategic partnership, in which bilateral cooperation will cover all sectors, especially economic, trade, and investment.

If it comes true, both nations’ investment and trade ties will have a more solid foundation to further flourish because more favourable conditions will be created for the trade and investment flows from South Korea into Vietnam and vice versa.

Figures from the Vietnamese General Statistics Office (GSO) showed that as of August 20, South Korea was Vietnam’s biggest foreign investor, with nearly 8,900 valid investment projects registered at $70.16 billion. In the first eight months of 2020, the total newly registered capital of South Korean investors in Vietnam was $2.96 billion.

Samsung is now the biggest foreign investor in Vietnam, with its total registered investment capital of over $17 billion for various projects and jobs for more than 160,000 local employees. The group is building a $220 million research and development centre in Hanoi, which is expected to become operational in 2022, employing another 2,200-3,000 people.

“Samsung Electronics’ exports account for 25 per cent of Vietnam’s total export turnover and 28 per cent of the country’s GDP,” said a statement from the South Korean Embassy in Vietnam.

The GSO also reported that eight-month bilateral trade sat at $41.3 billion, with Vietnam earning $12,6 billion from exports, down 1.5 per cent on-year, and the country spending $28.7 billion on imports, down 8.3 per cent on-year.