South Korea -- the biggest investor in the Vietnamese economy -- is well positioned to provide key support for Hanoi to be part of global supply chains, Vietnam’s foreign minister said Monday.
“Vietnam welcomes and encourages Korean firms to make new investments or expand existing ventures in Vietnam … We look forward to receiving the Republic of Korea’s assistance to be part of the global value chains of Korean corporation,” the minister, Bui Thanh Son, told The Korea Herald in an interview Monday.
Son said Seoul plays a crucial role, pointing to how tech giants like Samsung Electronics, the world’s largest memory chipmaker, has influenced the way global trade takes place.
Son’s remarks came ahead of a summit between the two countries’ presidents. President Yoon Suk-yeol and Vietnamese President Nguyen Xuan Phuc met in Seoul to upgrade their 30 years of diplomatic ties. Such summit last took place 11 years ago.
Son called economic cooperation the “pillar and main driving force” for ties. Hanoi and Seoul are each other’s third-largest trading partners as of last year, according to Korea’s latest data. And Vietnam -- a vital link to Southeast Asia for countries seeking deeper engagement with the region, like Korea -- is increasingly seen as an alternate sourcing destination amid intensifying US-China tech rivalry.
“Both sides should advance supply chain cooperation, and ensure supply chain resilience alongside economic security,” Son said. To make that happen, the two countries should establish joint research and development centers to work on the latest technologies, Son noted.
Such joint work, Son added, should be used to put up a “green infrastructure,” such as green industrial parks and smart cities, which rely on technologies to use energy more efficiently while leaving less negative impact on the environment.
And efforts to realize that are already underway, as some 300 Korean and Vietnamese businesspeople are expected to attend a forum in Seoul on Tuesday -- the last day of Phuc’s three-day trip -- to discuss building nuclear reactors and smart electricity grids in the Southeast Asian country, among other projects.
The following week, a similar gathering -- co-hosted by Herald Corp., the Korea International Trade Association and Vietnam Chamber of Commerce and Industry -- will take place in Hanoi. The meeting will be more expansive, with participants exchanging not only business proposals but also their impact on the future.
“I applaud The Korea Herald for organizing the Vietnam-Korea Economic Forum. This is a very suitable time for Korean enterprises to promote their business and investment in Vietnam as the two countries are enjoying an excellent bond, particularly in terms of economic, trade and investment cooperation,” Son said, stressing that Hanoi is an economic hub that straddles Northeast Asia and Southeast Asia.
A total of 15 free trade agreements Vietnam has so far inked -- including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) -- are evidence of the economic reach Hanoi seeks and its commitment to working with any partner, according to Son.
The RCEP is essentially a China-backed alternative to the US-led CPTPP, and the RCEP alone covers nearly a third of the world’s population.
Son added that Vietnam has proven to be an economy that could fight off or at least “successfully sustain” overall economic stability, including handling inflation, which has dragged on the global economy for the past year.
“Vietnam’s gross domestic product grew at 8.83 percent in the first nine months of 2022,” Son stressed. According to the Korea International Trade Association, one of the five business lobby groups here, the Vietnamese economy is expected to expand 7 percent this year -- more than double the 3.2 percent expected for China, Korea’s largest trading partner.
Korea is one of the global leaders in innovation and Vietnam has much to learn to remake its economy in the face of growing supply chain woes, Son said, putting forth what he believes would be a path equally rewarding for the two economies.
“Focus should be given to industries and services facilitating sustainable growth and innovation. … The success of Korean enterprises is indeed the success of Vietnam.”