March 23, 2023 04:53Advertisement Contact us
Korea JoongAng Daily of the Republic of Korea (RoK) has recently run an article highlighting Vietnam’s economic potential.
According to the article, the Vietnamese economy shows potential to grow even faster than the RoK’s thanks to its fortunate timing. With China’s economy saturated, many foreign companies, including Korean businesses, are shrinking their dependency on China, creating opportunities for Vietnam.
Korean companies and those from other countries are rushing to build factories to replace those in China, where labour costs are no longer cheap, it said.
While Samsung Electronics has been making adjustments to its investments in China, it has also been expanding investment in Vietnam.
The changing global value chain due to the ongoing US-China trade war is also speeding up investment into Vietnam. As US companies have been relocating their plants from China, recruitment in Vietnam has been step up to meet the growing number of orders, the article said.
Korean firms’ expanded operations in Vietnam has also helped to improve social and cultural ties between the two countries, the article said, highlighting the increasing number of marriages between Vietnamese and Koreans.
The article said Vietnam could increase its role as the hub of Korean production that can also help Vietnam in developing its own technologies.
Major Korean groups such as Samsung, LG, Hyosung and Kumho, are investing in big production facilities in Vietnam. Hanwha Group made an equity investment of 400 million USD in Vingroup, and SK Group invested 470 million USD in Masan Group in their bets to take advantage of Vietnam’s growth that stands at 6-7 percent annually.
Vietnam is now one of the RoK’s main investment destinations as the flow of Korean capital into the Southeast Asian country reached 50 billion USD as of 2017.
Meanwhile, the RoK has been Vietnam’s second biggest provider of official development assistance (ODA), only after Japan, according to the article.