Trade and investment bright spot
The event was organised by Vietnam News (under Vietnam News Agency) on the occasion of the 30th anniversary of the establishment of diplomatic relations between the two countries.
Speaking at the opening, Vu Viet Trang, General Director of the Vietnam News Agency, emphasised that, in addition to becoming the largest economic partner of the RoK in ASEAN, Vietnam is also a key partner of the east Asian nation under its New Southern Policy, with many large Korean enterprises and corporations operating and investing effectively in Vietnam.
The latest data from the Ministry of Planning and Investment shows that the accumulated registered FDI capital from the RoK to Vietnam from 1988 to September 2022, has reached more than 80.5 billion USD for over 9,400 projects in effect.
In the first nine months of 2022 alone, the RoK ranked 2nd out of 97 countries and territories investing in Vietnam, with 290 projects at a total investment capital of more than 3.8 billion USD.
The accumulated registered FDI capital from the RoK to Vietnam from 1988 to September 2022, has reached more than 80.5 billion USD for over 9,400 projects in effect.
Do Nhat Hoang, Director of the Foreign Investment Agency, Ministry of Planning and Investment, highly appreciated the business activities and contributions of Korean FDI enterprises to the socio-economic development of Vietnam.
Particularly in recent times, there has been a strong shift of Korean investors from simple outsourcing sectors, to industries with hi-tech content and high quality, as well as in energy projects, finance-banking, M&A and services.
Hoang expressed his belief that the Rok would continue to maintain its position as the leading FDI partner of Vietnam, and within the next 1 to 2 years, Vietnam and the RoK can fully realise the “dual goal” of bringing both bilateral trade turnover and total accumulated investment capital, to reaching the milestone of 100 billion USD.
Bae Yong Geun, Vice President of the Korean Chamber of Commerce and Industry in Vietnam (KOCHAM), affirmed that Vietnam is the "epicentre" of the Korean wave in Southeast Asia, and an important destination for Korean investment. Both countries have become the most closely cooperated ones in the world.
With a continuous and stable investment capital flow into Vietnam, accumulated to 74.6 billion USD in 9,223 projects by 2021, the RoK has been maintaining its position as the largest investor in Vietnam. More than 9,000 Korean companies have entered the market and operated in various fields such as manufacturing, energy, culture, education and tourism.
Plenty of room for bilateral trade development
The KOCHAM Vice Chairman assessed that, after Moody's recently upgraded Vietnam's national credit rating, international financial institutions are forecasting that the country would achieve GDP growth of 7% this year. In the third quarter of 2022, Vietnam's GDP grew by about 14% year-on-year, recording double-digit growth, mainly in the manufacturing sector, despite concerns about a global recession.
“As Vietnam is an emerging market of great interest to the world, Korean investment in Vietnam is expected to increase further. Vietnam's GDP growth rate is expected to reach 8% this year, and it is difficult for any company to hesitate to invest in a rapidly developing country like Vietnam," affirmed Bae Yong Geun.
As Vietnam is an emerging market of great interest to the world, Korean investment in Vietnam is expected to increase further. Vietnam's GDP growth rate is expected to reach 8% this year, and it is difficult for any company to hesitate to invest in a rapidly developing country like Vietnam.
KOCHAM Chairman Bae Yong Geun
From a local perspective, Vu Kim Chi, Deputy Head of Quang Ninh Province's Investment Promotion Agency, said that with the orientation to focus on developing industry services and tourism, Quang Ninh has applied many lessons learned from studying the socio-economic development of the RoK.
In the field of investment, there are 12 FDI projects with investment capital from the RoK at a total capital of 123.5 million USD, ranking 9th out of 21 countries and territories investing in Quang Ninh.
Import-export turnover to the Korean market of Quang Ninh province's enterprises reached 19.8 million USD in 2021 and 7.2 million USD in the first 6 months of 2022. According to Chi, the above figures showed the results of cooperation between Quang Ninh and Korean localities, investors and businesses over the recent time, and also proved that there is still a lot of room for further development.
However, the Korean side also pointed out some difficulties and limitations reflected by Korean companies operating in Vietnam, such as production costs, including labour costs, which are increasing significantly, in addition to global geopolitical uncertainties which makes investing in Vietnam more difficult, while the adjustment of regulations and the speed of licencing investment projects are also limited.
Emphasising that consistent preferential policies and support from the Vietnamese Government are necessary, the KOCHAM Vice Chairman said that, if this issue is resolved, more Korean companies will strengthen their investment in Vietnam.
Yoon Chang Woo, General Director of Posco Vietnam, an enterprise with more than 30 years of operation in Vietnam, highly appreciated the support of the host government, especially during the Covid-19 pandemic.
According to Yoon, Vietnam’s southern provinces need to develop human resources and key infrastructure to catch the wave of investment in the future. It is expected that more businesses will invest in Vietnam, so better investment conditions are needed, which is necessary to overcome limitations in human resources and infrastructure.
As one of the earliest foreign investors in Vietnam, since 1997, Deep C has been operating in the field of industrial park complex development. According to Koen Soenens, General Sales and Marketing Director at Deep C, the company will continue to expand new industrial zones to welcome more investors, while also ensuring sustainability standards.
Soenens assessed that, with the advantage of political and economic stability in the complex international context, along with an abundant source of young labourers, many free trade agreements signed with relevant partners, and a rapid growth rate of 7-8% - a dream for many countries, Vietnam has the advantage to attract more international investment flows, including those from the RoK.
Agreeing with the difficulties and limitations raised by Korean businesses, the Deep C director recommended that local authorities need to improve administrative procedure enhancement, limit cumbersome documents, and accelerate the construction of infrastructure for socio-economic development, including the foreign business community investing in Vietnam.