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Int'l Cooperation

Last updated: Monday, October 22, 2018


Vietnam, Korea Working together to Make Cooperation More Productive for Mutual Benefit

Posted: Monday, December 04, 2017

Vietnam and the Republic of Korea established the diplomatic ties in 1992. Since then, the partnership between Vietnam and Korea has undergone an impressive development, and Korea has become one of Vietnam's most important partners in many areas, especially trade and investment. To learn more about the cooperation relations between the two countries, Vietnam Business Forum had an interview with Dr Vu Tien Loc, Chairman & President of Vietnam Chamber of Commerce and Industry (VCCI), President of Vietnam-Korea Friendship Association. Luong Tuan reports.

Korea celebrates 25 years of diplomatic ties with Vietnam this year. In business and economic point of view, how do you evaluate the achievements during 25 years and what do you think can be main areas to further deepen relationship in the future?

The partnership between Vietnam and Korea has undergone an impressive development over the past 25 years, and so far, Korea has become one of Vietnam's most important partners in many areas.

In terms of investment, Korea has recently surpassed Japan, Singapore and Taiwan (China), the leading foreign investors in Vietnam, becoming the largest foreign investor in Vietnam with 6,324 projects worth a total registered capital of US$55.8 billion (up to September 20, 2017). According to the Foreign Investment Agency of the Ministry of Planning and Investment, in the past nine months, there were 108 countries and territories with investment projects in Vietnam with a record capital of US$25.48 billion, up to 34.3 per cent over the same period in 2016. Korea ranked first with a total investment of US$6.31 billion, accounting for 24.7 per cent of total investment. Korean investment projects in Vietnam are very diversified, with many sectors such as processing, manufacturing, transport infrastructure, logistics, real estate, wholesale, retail, tourism, and others.

In the first 10 months of 2017, Korea is Vietnam's second largest trading partner in APEC. Export-import turnover reached US$50.46 billion, up 41.9 per cent, accounting for 19 per cent, according to data of General Department of Customs. Vietnam’s exports to Korea reached US$12.15 billion, up 28.6 per cent, with key items such as electronics, electronic components, telephones, computers, machines and spare parts, textiles, seafood and agricultural products. Korea is the second largest exporters to Vietnam, after China, which saw a turnover of US$38.3 billion in the first ten months, up sharply by 46.7 per cent with the key products of petroleum products, plastic materials, fabrics, steel, metals, computers, electronic products and components, sewing accessories and accessories.
Some large-scale Korean groups have very good brand names in Vietnam such as Samsung, LG, Hyundai, Lotte, Daewoo, CJ and many others, which have made impressive contributions to Vietnam's economic growth in recent years.

In addition to the efforts of the business communities of the two countries, the results reflect the special interest of the two governments to create a favourable business environment for enterprises, creating a new chapter in the bilateral business partnership. In particular, Korean businesses have recognised Vietnam's rapid growth in many areas as well as a stable political environment. That is also the reason for a wave of Korean investors into the Vietnamese market.
With a solid strategic partnership built on trust and mutual respect, I think that in the near future, the relationship between Vietnam and Korea will be strongly developed more and more deeply from the continuous promotion of the results achieved in investment, trade as well as culture and education because the business community of the two countries have not exploited all these advantages.

How is Vietnam business sector getting ready for the Fourth Industrial Revolution? What are the main policies from the government to support business sector to prepare for the Fourth Industrial Revolution?
For the Vietnamese economy, Industrial Revolution 4.0 is expected to open up many opportunities for development, bringing the country closer to advanced technology of many developed countries in the region and in the world. Besides, it poses a lot of challenges in the context that the private sector is dominant in number of companies but has not really become a driving force for economic development. The survey noted that 85 per cent of businesses now care about the Industrial Revolution 4.0, but more than 70 per cent of respondents expressed concern about what to do to receive and be ready in the current context.
Vietnam has a great opportunity for comparative advantage in the areas of agriculture production in combination with traditional food; tourism; and creative economy associated with information technology. International integration, Industrial Revolution 4.0 and institutional reform would be the three major development drivers for Vietnam in the new phase.

In this context, the priorities proposed by Vietnam for APEC 2017 - and which have received the support of APEC economies - are not only in line with APEC needs but also come from the real need and vital issues of Vietnam. These are: Promoting sustainable, creative and inclusive growth; promote regional economic integration; enhance the competitiveness and creativity of micro, small and medium enterprises (MSMEs) in the digital age; Strengthening food security and sustainable agriculture, adapting to climate change.

Recognising the impact from the Industrial Revolution 4.0, at the Vietnam Business Summit and APEC CEO Summit hosted by VCCI during the APEC Economic Leaders’ Week 2017, we have proactively arranged a large amount of time for the world's leading CEOs and the Vietnamese business community to discuss the above important topics and make specific recommendations.

What do you think are the main areas that Vietnamese and Korean business sector could work together to be successful in the Fourth Industrial Revolution Era? What could be best model for Vietnam-Korean companies working together as partners in this regard?
After 25 years of comprehensive cooperation between the two countries, the strengths and weaknesses of each other have been identified and the Governments and enterprises of the two countries have worked together to overcome the shortcomings and complement each other to obtain the brilliant results today. Both countries must catch up with changes in the market trend in the Industrial Revolution 4.0 and have a plan tailored to the specific characteristics of each industry.
Korea has the strength in capital, technology, and science while Vietnam has the advantage of skilled labor as well as great potential for development in manufacturing, production and agriculture, and others. Therefore, enterprises of the two countries should actively seek ways to cooperate in areas that are complementary to each other to make products and services globally competitive.

A number of manufacturing sectors in Vietnam are losing their jobs due to the fact that a large number of automation and robotics lines will replace labour, but many still need skilled labour. In the field of agriculture, the Government of Vietnam is focusing its resources on sustainable agriculture and high-tech agriculture so that both companies can take advantage of this revolution to modernize and have higher productivity and increase export value.

Cooperation in exchange of knowledge, education and training, culture and tourism are also two potential areas for strong development in the coming time.

There are a lot Korean small and medium-sized enterprises that are interested in investing in Vietnam. With the advent of the Fourth industrial Revolution, what do you think can the opportunities for Korean SMEs?
Vietnam successfully organised the APEC 2017 Summit, in which VCCI paid the efforts to promote and receive high unity of countries on free trade in the new situation, as well as the introduction of policies and strategic solutions to develop micro, small and medium enterprises in the direction of green, sustainable and creative. This not only helps Vietnamese SMEs but also SMEs from Korea, and SMEs in the region have the opportunity to grow.

Korea has many large-scale business groups and corporations with the international level, and they also have many manufacturing facilities in Vietnam. We have appreciated their great contributions to Vietnam’s economy so far, and also emphasised the desire that these groups should strengthen linkages with Vietnamese SMEs and facilitate them to join their global value chains. This is a great opportunity for these big corporations as well as SMEs of our two countries to strengthen business cooperation effectively and for mutual benefit.

You are well known as President of the Vietnam-Korea Friendship Association. As the President, what are the main sectors that you would like to push forward to enhance Vietnam-Korean relations?
In addition to the economic sector, tourism and education are also areas of impressive achievements and cooperation should be more focused. In 2016, nearly 1.75 million people visited the two countries. Vietnam has the highest number of Koreans in Southeast Asia with more than 1.5 million visitors in the first eight months of 2017, up nearly 50 percent over the same period last year. According to the Korea Tourism Organisation (KTO), by November 2017, the number of Vietnamese visitors to Korea reached 302,264, an increase of 29.9 per cent over the same period of 2016.

Vietnam and Korea have committed themselves to diversification of cooperation in many fields such as politics, economics, culture and society, strengthening mutual relations on the basis of understanding and respect. Therefore, the two sides should continue to promote the exchanges of knowledge and education, and the exchanges of the young generation of the two countries in order to elevate the Korea-Vietnam strategic cooperation partnership to a higher level.

In addition, the cultural similarity is also the basis for our right to hope for cooperation in this field. Over the years, Korean films have become an indispensable spiritual food for the Vietnamese people, and Korean music is also popular with young people. I hope that there will be more cooperation projects in this field in the future.

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