Korea and Vietnam entering a new era of joint prosperity with a focus on advanced industrial collaboration
General Secretary To Lam's visit to Korea presents a historic opportunity for the two nations to design a shared future as true strategic partners, with a focus on cooperation in advanced industries.
The Korea-Vietnam relationship has reached a new milestone, strengthening practical cooperation and mutual trust. Korea, being Vietnam's largest source of foreign direct investment (FDI), accounts for 18% of total FDI with cumulative investments of approximately $92 billion across over 10,000 projects.
Korean companies view Vietnam not just as a production base but as a strategic partner for joint innovation and growth. This partnership is evident in the ongoing collaboration across various industries, with General Secretary To Lam's leadership and commitment to reform playing a significant role.
However, challenges remain in enhancing Korea-Vietnam cooperation in advanced industries like semiconductor manufacturing equipment and electric mobility technologies. Global geopolitical tensions and protectionist policies, supply chain integration complexity, and the need for multi-layered cooperation beyond traditional sectors are key hurdles.
To address these challenges, suggested solutions include forming strategic economic partnerships with high-level coordination, expanding bilateral trade frameworks, intensifying investments in research and development (R&D) particularly in green and digital technologies, and leveraging corporate roles as integrators of technology, capital, and human resources.
Addressing delays in customs clearance in Vietnam is an urgent need to upgrade the institutional infrastructure for advanced industries. The supply of skilled professionals in advanced technologies remains insufficient in Vietnam, and there is a need to establish clear standards for these technologies that keep pace with rapid technological advances.
Vietnam's government reform efforts have earned respect from the Korean business community. Kim Nyoun Ho, the chairman of the Korean Chamber of Commerce in Vietnam, emphasizes that companies are essential to linking technology, investment, and human capital, facilitating industrial and economic cooperation in digital and high-tech sectors.
To further facilitate smooth collaboration, KOCHAM will strengthen its role as a bridge, helping companies understand Vietnam's systems and business environment, and facilitating smooth collaboration with government bodies and local enterprises.
The bilateral ties between Korea and Vietnam have been elevated to a Comprehensive Strategic Partnership at the end of 2022. Korean investment in Vietnam grew by 107% on-year in the first half of the current year.
However, challenges persist in areas such as Vietnam's investment incentives for foreign companies, which face difficulties due to regional policy variations and inconsistencies between government agencies. Emerging mobility technologies in Vietnam, such as electric motorcycles, drones, and autonomous driving equipment, face regulatory hurdles in pilot operations.
In summary, addressing geopolitical-economic headwinds through institutional cooperation frameworks, corporate-led synergies, innovation investment, regulatory harmonization, and supply chain integration comprise the current roadmap for enhancing Korea-Vietnam cooperation in advanced industries such as semiconductor manufacturing and electric mobility technologies.
- Korean companies view technology as a strategic partner for joint innovation and growth with Vietnam, especially in advanced industries like semiconductor manufacturing equipment and electric mobility technologies.
- To enhance Korea-Vietnam cooperation in technology sectors, suggested solutions include investing in research and development (R&D) in green and digital technologies, leveraging corporate roles as integrators of technology, capital, and human resources, and addressing regulatory hurdles for emerging technologies.
