At a Vietnam-RoK business summit in the central province of Quang Nam on November 9, Deputy Prime Minister Trinh Dinh Dung assessed that bilateral cooperation had grown rapidly on a stable basis and yielded impressive achievements. He praised the RoK business community for its important role in promoting substantial and efficient investment cooperation.
Official data indicate that the RoK has surpassed Japan, Singapore and Chinese Taipei to become the largest foreign investor in Vietnam with total registered capital of US$65.7 billion as of September 2019. Vietnam has become the RoK’s fourth largest foreign investment partner, after the US, China, and Hong Kong (China). RoK investments include the processing, manufacturing, electronics, energy, transport infrastructure development, logistics, real estate, wholesale, retail, and tourism sectors, among others. Most big RoK corporations including Samsung, Hyundai, LG, POSCO, SK, Lotte, and Kumho-Asiana operate in Vietnam.
A total 38.02 billion USD of foreign direct investment (FDI) was poured into Vietnam this year to December 20, a 10-year high, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
The amount, representing a 7.2 percent increase on a yearly basis, included newly registered capital, additional capital to existing projects, and share purchase by foreign investors.
A number of RoK businesses have become strategic partners of leading Vietnamese corporations: Kebhanabank owns 15 percent of the shares of the Bank for Investment and Development of Vietnam (BIDV), while SK owns six percent of Vingroup’s shares, for example. RoK businesses work with Vietnamese partners not only to access the local market but also to expand to other foreign markets.
RoK investment in Vietnam is expected to become more substantial and efficient in the near future. RoK enterprises will increase investment and cooperation with Vietnamese enterprises in automobiles and machinery manufacturing, and the petrochemical industries.
Hong Kong (China) came close behind the RoK with 7.87 billion USD, ranking second among 125 countries and territories investing in Vietnam. The amount included 3.85 billion USD spent on shares of the Vietnam Beverage Ltd Co in Hanoi.
Third was Singapore with 4.5 billion USD, followed by Japan and China. It is noteworthy that investment from China showed a rising trend, with a 1.65-times increase.
Hanoi absorbed the largest share of the FDI flow with 8.45 billion USD or 22.2 percent of the total figure. It was followed by Ho Chi Minh City with 8.3 billion USD.
The disbursement of FDI capital also reached a record of 20.38 billion USD
Bilateral trade has been growing well. Vietnam is one of the two ASEAN (Association of Southeast Asian Nations) countries to sign a bilateral free trade agreement (FTA) with the RoK. Bilateral trade accounted for 50 percent of trade between the RoK and ASEAN. The two countries are important trade partners, with complementary goods in the global supply chain. The RoK supplies components, machinery and equipment, helping Vietnam boost exports, while Vietnam is a fulcrum for RoK industrial corporations to maintain global competitiveness.
The Korea-Vietnam Free Trade Agreement (KVFTA) is designed to improve the effectiveness of the legal framework, trade policies’ implementation, economic restructuring, especially the business environment, and competitiveness of the two economies. It targets balancing and increasing bilateral trade to US$70 billion by 2020.
In the first eight months of 2019, Vietnamese-RoK trade reached US$44 billion, up 2.1 percent from the same period in 2018.