SEOUL, KOREA - Korea and Vietnam is seeking to bolster economic ties. South Korean President Park Geun-hye met with Vietnam’s National Assembly Speaker Nguyen Sinh Hun on July 23 to discuss the economic cooperation of both nations. Park remarked during the meeting that both countries have had remarkable development since they established formal diplomatic relations in 1992, but there is still huge potential in developing further a complementary economic structure. Park told him her wish to make joint efforts to reach new trade target of 3 million dollar by 2015.
South Korean President Park Geun-hye met with Vietnam’s National Assembly Speaker Nguyen Sinh Hun on July 23 to discuss the economic cooperation of both nations.
For the past 21 years since diplomatic relations begun, both countries have shown enormous growth in not only economy but also culture and society, growing as partner countries.To the present date, over 3,000 Korean companies have broken into the Vietnamese market, hiring some 600,000 local employees. Since the FTA negotiations which started last August gained momentum, the trade volume is expected to grow exponentially, experts say.
The Vietnam Airlines, the national flag carrier, launched a direct air route between Incheon and central Da Nang city on July 1 with the expectations of increasing material and human resources exchanges. Marking the new flight between Korea and Vietnam, the Ambassador of Vietnam, Tran Trong Toan told Korea IT Times about the increasing exchanges and the cooperation of both nations.
“The inauguration of the Incheon-Da Nang direct flights by Vietnam Airlines takes place at a very meaningful time. Vietnam and Korea have just successfully completed the “Vietnam-Korea Friendship Year 2012” to commemorate the 20th Anniversary of the establishment of diplomatic relation between Vietnam and Korea,” said the Ambassador.
Over the past 20 years, the friendly and cooperative relations between two countries have been developing dynamically and effectively in all fields: political and economic, social and cultural, defence and security, scientific and technological, education and training, and people-to-people exchange. Particularly, the social and cultural interaction has been highly active with sister relationship established between around 40 localities of both countries. There are large communities of 130.000 Koreans living, working and studying in Vietnam and 123.000 Vietnamese in Korea, including around 70,000 workers, 50,000 Vietnamese bride immigrants and 5,000 students. All these factors have generated a huge demand for traveling between Korea and Vietnam. In 2012 alone, over 701.000 Korean people travelled to Vietnam and around 110,000 Vietnamese people travelled to Korea.
“Against this background, it is very important and timely to open more direct flights by Vietnam Airlines between Incheon and Da Nang in addition to flights by Korean Air and Asian Airlines. Especially, Da Nang is one of the most dynamic and attractive cities in Central Vietnam with beautiful landscape and beaches, warm-hearted people and favorable business opportunities,” he said.
Every year, Da Nang City organizes the World Firework Festival attracting participation of dozens of countries and hundreads of thousands people from all continents. The operation of direct flights between Incheon and Da Nang will certainly promote all-round relationship and cooperation between Viet Nam and Korea.
He continued that “We expect more and more Korean tourists visiting Da Nang, where they can enjoy many famous beautiful sites such as Han River Bridge, Cammelia Peninsula, Haivan Pass, Ngu Hanh Son Mountain, Marble Mountain, Bana Mountain, Non Nuoc Artistic Stone Carving Viallage, Nam O Underwater Stone Beach, Tuy Loan Ancient Village, Caodaism Temple and many luxurious hotels... They an also visit top tourist destinations including UNESCO World Cultural Heritages such as Hoian Ancient Town, Myson Holyland, Hue Imperial Citadel which are situated very close to Da Nang.”
We also expect more and more Korean people coming to Da Nang to do business where favorable opportunities are waiting for them while, among 30 countries, Korea has so far been a leading investor with 29 projects and over US$710 million, the Ambassor said.
Bilateral Trade Relations between Korea and Vietnam
Korea is now the 4th largest trade partner of Vietnam (next to China, US, Japan) while Vietnam is Korea’s 6th biggest export market and Korea imports up to 4% of Vietnam’s total export goods Their bilateral trade grew steadily: from just US$ 500 million in 1992 when Viet Nam and Korea established their diplomatic relation, it grew 20 fold to US$10 billion since 2008 and reached US$ 13.7 billion in 2010, US$18.54 billion in 2011 and US$21.6 billion in 2012. The bilateral trade surpassed the goal of US$20 billion 3 years prior to the target year of 2015 set by both governments who are now striving to achieve US$ 30 billion in 2015.
One of the pending issues in their bilateral trade is the ligering trade deficit from the Vietnamese side which grew up to US$ 6.4 billion in 2010, US$ 10 billion in 2011 and US$ 15.5 billion in 2012. It is understandable in view of Korea having been for many years a leading investor in Viet Nam with over 2,500 Korean companies investing over US$ 25 billion in 3,250 projects in Viet Nam as of March 2013 making Vietnam Korea’s 3rd largest investment market abroad next to China and US.
Many Korean companies have exported materials, spare parts, machinery and equipments to their production bases in Viet Nam contributing to the large trade suplus from the Korean side. Both the countries have agreed to bridge this trade gap through (i) increasing Vietnamese direct export of agricultural, fishery and industrial products to Korea; and (ii) attracting more Korean investment in food processing and supportive industries in Viet Nam and export their products back to Korea to suite the tastes and the likes of the Korean people.
“With a view to facilitating and increasing their bilateral trade, Viet Nam and Korea are now accelerating the negotiations on a Free Trade Agreement so as to conclude in the near future,” he said.
Popular sightseeing destimations in Vietnam for Koreans
“Viet Nam has a four-thousand-year long historical and cultural traditions and many beautiful tourist attractive places which are world-famous and have been recognized by UNESCO as the World’s natural and cultural heritages. Coming to Viet Nam, Korean people have chances to visit many famous tourist attractions in all 3 regions: The North, the Central and the South of Viet Nam.”
In the North of Viet Nam, there is Ha Noi Capital – “the City of Peace” - with more than 1000 years of history, including Van Mieu or Temple of Literature (the oldest university built in 1070) and the Thang Long Royal City which has been recently recognized by UNESCO as the World Cultural Heritage; Dong Van Rock Highland; Bich Dong Grottos in Ninh Binh province; especially Halong Bay-one of the World’s Natural Heritages and World’s seven Wonders of Nature. Tourists can enjoy the World’s intangible cultural heritages such as Quan Ho Folk Songs and Ca Tru Melodies.
In the Central, Phong Nha Ke Bang Grotto in Quang Binh province, the ancient capital of Hue, the old quarters of Hoi An, the Cham tower are all the World’s heritages; Da Nang City, Nha Trang, Phan Thiet are famous with more than 1,000km of sea beaches. Tourists can enjoy the World’s intangible cultural heritages such as the Hue Royal Palace Music, the Tay Nguyen Highlands Gong and Chieng Cultural Space.
In the South, the tourists can visit Ho Chi Minh City (former Sai Gon), Vung Tau and Cuu Long River delta (which is famous with its beautiful landscape and is a big “rice basket” of Viet Nam). Tourists can also visit the famous 250km long Cu Chi Tunnel, Ba Na Hills and Da Lat city, which is 400km north of Ho Chi Minh City and located at the height of 1,500m above sea level with pleasant climate around the year. Here locates Viet Nam’s first golf course, which was built in 1930 and considered one of the most beautiful golf courses in Viet Nam.
Now, Korean tourists are exempted from visa for 15 days. There are around 100 flights per week between Korea to Viet Nam by Vietnam Airlines, Korean Air and Asiana Airlines. In recent years, Viet Nam has become an attractive destination to Korean tourists with over 600,000 Koreans visiting Viet Nam every year (701,000 in 2012). The Korean tourists account for 12.6% total foreign tourists coming to Viet Nam and 3.62% the Korean tourists going abroad.
Vietnam’s key and promising industries
According to its industrialization-modernization strategy till 2020 when Viet Nam will fulfil its goal of basically becoming a modern-oriented industrialized nation and with a vision towards 2030, Viet Nam will encourage the development of six key industries with high value-added investment and international competitiveness. The six key industries include electronics, agricultural machinery, agro-fishery manufacturing, shipbuilding, environment and energy saving, and automobile and spare parts.
These key industries will take lead in applying high technologies (information and communication technology, bio-technology, nanotechnology, new materials, new energies) and green technologies. Viet Nam has established several hi-tech zones to attract domestic and foreign investment such as Hoa Lac Hi-Tech Zone, Ho Chi Minh City Hi-Tech Zone, several Technological Incubators and 8 Software Parks in Ho Chi Minh City, Da Nang, Ha Noi, Hai Phong, Can Tho, Thua Thien-Hue. By 2020, the key industries with prioritized areas will expand at least 20 percent per year and contribute 35 percent of total value of the industrial sector. Viet Nam has also attached great importance to development of environment-friendly industries, renewable and sustainable energies (solar, wind, tidal, hydropower), waste processing industry.
Vietnamese industrial sectors for investment
“To further promote cooperation between Viet Nam and Korea, we must combine the strong economic, financial and technological potentials of Korea with development needs of Viet Nam. Over the past years, Viet Nam and Korea have successfully cooperated in various areas, including manufacturing and processing industries for domestic consumption and export. In the time to come, Viet Nam encourages Korean firms to increase investment in the following areas.”
First, supportive industries in Vietnam so as to promote localization of products, particularly in automobile, mobiphone, audo-visual, computer manufacturing, agri-aquacultural product processing, food processing industries in order to utilize Vietnam’s advantages in cheap labour, abundant natural resources.
Second, green growth industries, waste processing, renewable energies so as to ensure harmonous combination of economic growth with environment protection.
Third, construction of infrastructure, including transport facilities (roads, highways, bridges, ports, airports), water supply system, power generation (including nuclear powers). Apart from FDI and ODA, we should promote cooperation in the form of public-private partnership (PPP), which Korea has abundant successful experience.
Vietnam’s economic policy
The Ambassador said “Over the past 27 years since 1986 when Viet Nam embarked upon the Doi Moi (Renovation) policy, the country has been implementing a comprehensive reform of all political, economic and cultural life. In the economic field, Viet Nam has shifted from the centrally planned and subsidiary system which played a key role in providing necessary resources for the victory during the time of national liberation struggle and re-unification till 1975 to the market mechanism in the peaceful time.”
The three main economic programs of food production, provision of consumer goods and export development had been successfully implemented. In the diplomatic and international field, Viet Nam has followed a policy of “setting aside the past and looking to the future” with a view to developing friendly and cooperative relations with all countries which involved in the American war in Viet Nam, at the same time Viet Nam has promoted its motto of “Viet Nam is a friend, a reliable partner of all countries and a responsible member of the world community striving for peace, stability and cooperation for development”.
On the basis of successful implementation of the Doi Moi policy, Viet Nam has entered to the era of accelerating industrialization-modernization of the country with a view to building Viet Nam into a modern-oriented industrialized country by 2020. This is the most important economic policy and priority task of the ruling Communist Party of Viet Nam, the Vietnamese Government and people aimed at building Viet Nam into “a strong country with wealthy people, democratic, equitable and civilized society”.
“We strongly believe that with the utmost efforts of the Vietnamese people as well as effective cooperation and support of the world community, including Republic of Korea, Viet Nam will certainly attain this goal.”