Vietnamese-Korean trade celebrates quarter century milestone
After 25 years, Vietnamese-Korean two-way trade turnover hit $60 billion and is expected to reach US$100 billion by 2020.
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| The two presidents set the new goal for two-way trade turnover of $100 billion by 2020 |
2017 marked the 25th anniversary of bilateral relations between Vietnam and the Republic of Korea (RoK) (December 22, 1992-2017), with numerous outstanding achievements in the fields of economy, trade, investment, and social and cultural co-operation.
In a quarter of a century, the two-way trade turnover increased by 86 times, from $0.5 billion in 1992 to $43.4 billion in 2016. It was $58.5 billion in the first 11 months of 2017 and is expected to be $60 billion by the end of 2017. Currently, Vietnam ranks fourth among the RoK’s trading partners.
According to data of the Ministry of Industry and Trade, in the first 11 months of this year, Vietnam's import turnover from RoK was $42.52 billion, focusing on semiconductors, monitors, wireless communication devices, and electronic components.
The export turnover of Vietnam to the RoK was $13.52 billion, focusing on wireless communication devices, clothes, and usual essential goods. Korea ranks second among Vietnam’s trading partners, only behind China.
Th RoK has been consistently among the top three foreign investors in Vietnam. By December 20, 2017, the RoK ranks first with a total of 5,700 projects and total accumulated registered capital of $57.66 billion, accounting for 18.1 per cent of total investment capital reaching the country.
Many big Korean corporations have invested in Vietnam, such as Samsung, LG (manufacturing), Kumho, Doosan, Huyndai, Posco, GS (heavy industry and shipbuilding), CJ, Lotte, Shinsegae (retail, distribution and logistics) and thousands of Korean small- and medium-sized enterprises have been contributing to Vietnam’s socioeconomic development.
During the past 25 years, the export goods structure of Vietnam to Korea has shifted from raw materials, primary agricultural and forestry products, and low value-added products to electronic goods, mechanical processing, processing agro-forestry products, and high-value-added consumer goods. The tag “Made in Vietnam” has become familiar in every electronic products of Samsung.
In machinery, over 90 per cent of raw materials and semi-finished products for domestic investment and foreign direct investment (FDI) enterprises for production and processing for export has been imported from Korea. This co-operation structure has been strengthening the competitiveness of Vietnamese goods and services in the region and around the world.
Towards the $100 billion mark
The 25 years of bilateral relations, with solid achievements and international integration, is an important premise to raise the two-way trade turnover by 2020 from the expected $70 billion (at the Vietnam-Korea Joint Statement in 2013) to $100 billion.
This figure was set at the meeting between State President Tran Dai Quang and Korean President Moon Jae In last month on the side-lines of the APEC Summit 2017 in the central city of Danang.
Nguyen Phu Binh, the first ambassador of Vietnam to Korea and former deputy minister of the Ministry of Foreign Affairs, said that besides economic achievements, the two countries could expand co-operation in culture, tourism, and education.
In 2017, there are estimated at two million Korean visitors to Vietnam, 0.7 million Vietnamese visitors to Korea, 0.2 million Vietnamese students and people living in Korea.
Ryu Hang Ha, chairman of the Korean Chamber of Commerce and Industry (KoCham), confirmed that investment and trade relations between the two countries have become increasingly important for both sides. Vietnam is an attractive destination, a foundation for Korean investors to enter ASEAN markets and export to the EU and the US.
Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign Investment Enterprises (VAFIE), said that the trade balance has not been equal. Vietnam has been running a trade deficit, despite the Vietnam-Korea Free Trade Agreement bringing opportunities for both sides.
It shows that the exploration capacity of Vietnamese enterprises in Korea remains weak. However, he believed that a Korean investment huge wave into Vietnam is absolutely possible with the emergence of new sectors, new technology, and skills.
“To evolve sustainable trade and investment relations, Korean investors should invest into sectors Vietnam is promoting in the coming time, such as high-tech agriculture, processing agri-fishery products for export, boosting technical transfer for Vietnamese firms and focusing on environmentally friendly projects,” Toan said.
