Vietnam – Korea: Important Partner, High Confidence

 

On December 22, 1992, Vietnam and Republic of Korea (ROK) issued a Joint Statement on the establishment of diplomatic relations at ambassadorial level. It is an important event opening a new page in the bilateral relations and reflecting the aspirations of the two peoples for friendly cooperation and mutual prosperity. Over the past 20 years, Vietnam-ROK friendship and cooperation have recorded brilliant achievements.

 

Politically, the two countries have upgraded diplomatic relations to “Comprehensive partnership in the 21st century” in August 2001 and then to “Strategic partnership” in October 2009, reaffirming the political will of the leadership and people of the two countries and creating a firm political foundation for bilateral friendship and cooperation at a high strategic level in all fields.

 

Since 1992, the two countries have exchanged 22 high-level visits of Party, State, Government and Parliament. In addition, bilateral high-level meetings have been conducted at international conferences. Those visits and meetings have become a fine tradition of the two countries. Meanwhile, bilateral relations and cooperation have also been expanded at all levels: ministries, agencies and localities. So far, over 30 provinces, cities and districts of the two countries have established cooperation, including big cities such as Hanoi, Ho Chi Minh City, Hai Phong and Da Nang of Vietnam with Seoul, Busan, Incheon and Daegu of Korea.

 

The two countries have established and maintained efficiently several mechanisms for dialogue and policy consultation to promote mutual understanding and confidence, such as bilateral strategic dialogues at vice-ministerial level on diplomatic-security-defence affairs, and on national defence policy, ministerial joint committee on nuclear power, energy and industry, inter-governmental committee on economic and science-technology cooperation and several consultation mechanisms at departmental levels.

 

Along with political relations, bilateral economic cooperation has also been fast developing especially in trade, investment, ODA, tourism and labour. ROK has become the leading economic cooperation partner of Vietnam and Vietnam is also an important partner of ROK.Regarding ODA, ROK is the second biggest donor to Vietnam, while Vietnam is the biggest recipient to ROK. The assistance started in 1993 with US$100,000 has increased to the total of US$150 million. In 1995, soft loans started at US$5 million/year increased to US$100 million/year in 2006, then US$200 million/year in 2008-2011, and expected to be US$250 million/year in 2012-2015.

 

Bilateral trade increased significantly in the past two decades. The two-way trade increased from US$0.5 billion in 1992 to US$28.8 billion in 2014, 57 times in the past 22 years. In 2011, ROK overtook Japan to become the second biggest exporter to Vietnam (second only to China) and Vietnam suffered from trade deficit. In 2014, ROK was the second biggest trade partner of Vietnam and the trade value is expected to reach US$30 billion in 2015.

 

Vietnam imports from ROK computers, electronic products, machines and parts, textile, telephone, petroleum, materials for garment and footwear, steel, car and spare parts, and plastic. While Vietnamese exports to ROK are garments, crude oil, transport vehicles and parts, aqua-products, timber and wood-based products.  

 

ROK invested US$2.278 billion in 583 projects in Vietnam in the year to October 20, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. Meanwhile, 257 existing projects registered to add US$3.942 billion of investment capital in the period. Thus, ROK invested US$6.221 billion in Vietnam in the first 10 months of 2015.

 

ROK investors invested in 16 sectors. Manufacturing and processing sector drew the greatest interest of ROK investors. This sector lured US$5.633 billion from 330 new projects and 217 existing projects, accounting for 90.5 percent of Korea’s total registered capital. Electric production and distribution sector came second with three new projects and US$200 million of registered capital, accounting for 3.2 percent of its total investment capital. Wholesaling, retailing and repairing sector came third with US$94.2 million from 64 new projects and six existing projects, accounting for 1.5 percent of total investment capital.

 

Up to 539 ROK -invested projects out of 583 total projects in Vietnam were wholly foreign-invested. 249 projects that add more investment capital are also wholly foreign-invested. The investment capital from new projects and existing projects reached US$5.973 billion, accounting for 96 percent of the total registered capital. Other forms of business include joint venture, joint stock and business partnership.

 

 The two countries are trying to increase two-way trade value to US$70 billion by 2020 as agreed by their leaders. The ROK government has facilitated the import of Vietnamese agricultural and aqua products and encouraged Korean companies to include Vietnamese agricultural products in Korean distribution chains in the world market. The two countries continue to sponsor trade fairs in Vietnam and ROK and promote bilateral trade and investment.

Vietnam and Korea share historical and cultural values. The two countries can also supplement each other with human resources from Vietnam and technology and economic achievements from Korea. 

 

Presently, some 3,000 Korean companies are operating in Vietnam and some 40,000 Vietnamese workers are working in Korea. They are in fact cementing bilateral trade and investment with impressive success.