A milestone in Vietnam-RoK relations

(VOV) - Twenty years ago on December 22 Vietnam and the Republic of Korea officially established diplomatic ties, marking a turning point in bilateral relations.

In a recent interview granted to the Vietnam Investment Review, Foreign Minister Pham Binh Minh said the past 20 years have seen Vietnam-RoK relations develop fruitfully in various areas, spanning politics, investment, and trade to cultural and people-to-people exchanges.

In 2009 the two countries decided to establish a strategic cooperation partnership, opening up opportunities for more expansive cooperation in the future.

 

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Assembling components at Samsung Electronics Vietnam (Photo:baohaiquan)

Annual two-way trade has grown and flourished over the years, increasing from US$500 million in 1992 to US$18 billion in 2011. If this stable growth is maintained, bilateral trade value is expected to reach its US$20 billion target ahead of the 2015 deadline.

The RoK is the fourth largest trade partner and the 8th largest importer of Vietnam. It consumes key Vietnamese commodities including seafood, garments, footwear, timber furniture, and farm produce.

Many major RoK companies like Samsung, LG, Hyundai, Posco, Lotte, Doosan, Kumho, Daewoo, SK, and CJ have successfully and efficiently undertaken operations in Vietnam.

Samsung-funded mobile phone manufacturing project valued at US$1.5 billion in Bac Ninh province is a case in point. In 2011 the plant earned US$6 billion from its exports, accounting for more than 80 percent of the province’s export earnings. It aims to record US$10 billion from exports in 2013, which would make Samsung Electronics Vietnam (SEV) the biggest exporter in the country.

During the past 20 years, RoK investments in Vietnam have increased by 240 times. More than 3,000 RoK businesses have invested in Vietnam with a total registered capitalisation of nearly US$25 billion, ranking second amongst foreign investors in the country. They operate in 47 out of 63 provinces and cities across the country, and in 18 of its 21 economic sectors.

RoK investment is focused on the processing and manufacturing industries (with 1,897 projects accounting for 49.5 percent of total registered capital), real estate (with 78 projects and 27.6 percent), and construction (with 413 projects and 8.6 percent).

RoK-invested businesses are expected to contribute 10 percent of Vietnam’s 2012 export total.  

Foreign Minister Minh attributed the flourishing trade to the reliably close political ties between Vietnam and the RoK over the years, creating an environment where the two governments, business communities and peoples have been able to strengthen bilateral trade, economic and investment relationships,

Vietnam and the RoK notably began free trade agreement (FTA) negotiations this year. Once the pact is signed, it will offer numerous opportunities for the two countries to use and consume each other’s products. The RoK’s temperate farm produce will be available in Vietnam, while Vietnam’s tropical farm products will enter the RoK market.

Vietnam is currently implementing its 2011-2020 socio-economic development strategy, offering a host of opportunities for RoK businesses to invest in the electronics, automobile and machinery manufacturing industries.