How important is Vietnam’s role in South Korea’s trade and investment policy?

Min Moonki, commercial attaché of the South Korean Embassy to Vietnam

Since Vietnam and South Korea signed a free trade agreement in 2015, the trade scale of both countries has grown strongly, reaching $87 billion last year and up 80 per cent from five years ago. The two countries have set a target of bringing bilateral trade to $100 billion next year.

At the same time, South Korean businesses are also constantly promoting foreign investment, especially in Vietnam, where South Korea is the largest investor.

Next month, the second factory of Hyundai Motor is expected to be inaugurated, and in December, there is expected to be the inauguration ceremony of Samsung’s research and development centre in Hanoi. The amount of investment in the high-tech sector in Vietnam has also increased sharply in recent times.

How much of a priority is Vietnam in terms of long-term investment and what will be the main focus going forward?

Along with the economic competition between the United States and China, many South Korean enterprises are planning to invest in new-generation factories in Vietnam. Not only South Korea but many other countries are expanding investment in Vietnam, which is gradually asserting its position as a global production centre.

Currently, South Korea is promoting investment in Vietnam in electronics, so the two countries urgently need to cooperate to build a stable supply chain, typically for key minerals. In addition, in the current digital transformation era, I think the wave of investment in AI will take place strongly.

Based on the trust built up over the past 30 years, the economic cooperation between the two countries has grown exponentially. This year, also the 30th anniversary of diplomatic relations, is the time to elevate the bilateral cooperation relationship to a new high. In the context of the global supply chain with many uncertainties due to the pandemic, we face many important problems, such as carbon neutrality and digital transformation.

These are problems that South Korea alone cannot solve. Therefore, I think we can create a successful global cooperation precedent in the above areas.

What issues does South Korea want Vietnam to improve to make investment cooperation more effective?

The pair have signed many economic cooperation agreements and thanks to that, the scale of bilateral trade has also grown rapidly. Looking ahead, Vietnam and South Korea also have many economic agreements expected to be signed.

In particular, the Regional Comprehensive Economic Partnership has been signed but, currently, Vietnam has not applied preferential tax when importing so I hope this point can be improved. In addition, the two countries are also jointly promoting the implementation of the Indo-Pacific Economic Framework. In this process, I hope the two countries can help each other in the international negotiation process to take advantage of common interests.

Quang Ninh province is emerging as a destination that many foreign-invested enterprises are interested in. How do you assess the interest of South Korean businesses in this northern province?

Quang Ninh is not yet one of the localities in Vietnam that attracts many of our businesses, but several South Korean groups have visited to learn about the business and investment environment. Currently, in Quang Ninh, there is a company called IWon that wants to invest in building cold storage to serve the needs of domestic production, but recently the business has had difficulties in obtaining an investment certificate.

Through the support of the embassy, the enterprise has discussed and reached an agreement with the province and is currently waiting for a licence.