According to Bloomberg News reported on April 3, Sino-US tensions in trade have enabled South Korea to continuously deepen its ties with Vietnam. Vietnam will soon surpass the United States and become South Korea's second largest export market.
In addition, the report stated that there is another layer of consideration in South Korea. That is under the influence of Trump's 'U.S. Priority' and China's 'Sad Storm', South Korea's current relations with these two major economies are not very good.
According to the director of the Korea International Trade Association's office in Ho Chi Minh City, Kim Ilsan, the Korean company has long established a factory in Vietnam, but after the 'Sad storm', Vietnam as a production base And the status of the export market has increased.
In 2017, Korea’s exports to Vietnam increased by nearly 50%, and more than doubled in the past three years. According to the Korea International Trade Association, Vietnam will become South Korea’s second largest export market by 2020.
'Korea usually sells intermediate products and capital goods to Vietnam, but as Vietnam's economy grows, the sales space for consumer goods will be even greater.'
Korea's Exports to Vietnam Unit: Billion U.S. Dollars
Korean companies led by Samsung and Lotte are leading Korea’s investment in Vietnam, and their investment areas have gradually shifted from the textile industry to electronics manufacturing, services and retail. Currently, the finance ministers of South Korea and Vietnam have agreed to each year Hold a meeting to expand the economic cooperation between the two countries.
According to data from Korea Trade and Investment Promotion Corporation, South Korea is currently the largest investor in Vietnam. Samsung’s factory in Hanoi alone employs 100,000 employees, and the number of its affiliates and suppliers is estimated to be around 300.
The data also shows that about one-third of South Korean exports to Vietnam are semiconductors and panels used in electronics production lines.
On the 23rd of last month, South Korea’s President Wen visited Vietnam in South Korea.
In addition to being a production base, with the rapid economic growth and the rejuvenation of the population, the attractiveness of Vietnam as a market is also increasing. According to reports, one-third of Vietnam’s population is between the ages of 15 and 34. In the first quarter of this year, its economy grew by 7.4% year-on-year. Including Lotte, Easy Buy and other Korean companies are actively exploring the Vietnamese market.
In his visit to Vietnam, Wen stated that South Korea’s relations with Vietnam are getting closer. This will be a win-win situation.
'At present there are about 5,500 South Korean companies doing business in Vietnam,' Wen said, 'There are 1 million Vietnamese workers have a good job. Thanks to them, South Korean companies have also been able to develop rapidly.'
Samsung's factory in Vietnam
However, the report also pointed out that although South Korea is actively carrying out its 'New Southward' policy and wants to reduce its reliance on China and the United States, the buffer that a Vietnamese company can provide is very limited. After all, many Korean companies in Vietnam produce. The goods were eventually sold to China and the United States.
An expert from the Korea Institute of Foreign Economic Policy pointed out that Vietnam and ASEAN cannot replace the United States and China, but as a new complementary market, it can allow South Korea to better cope with the impact from China and the United States.