Enterprises from Viet Nam and South Korea are encouraged to tap unexploited potential to foster co-operation based on common interests and individual strengths of each country in the face of opportunities and challenges arising from the 4th Industrial Revolution.

Workers manufacture electric components at a factory of SYNOFEX Viet Nam Ltd company, a fully Korean-invested firm, located in Quang Minh Industrial Park in Ha Noi.

A number of discussions and proposals were presented at the Maekyung Korea-Viet Nam Forum on Wednesday in Ha Noi, as part of activities to celebrate the 25th anniversary of diplomatic ties between Viet Nam and the Republic of Korea.

Speaking at the forum, Vietnamese Deputy Prime Minister Trinh Dinh Dung applauded the impressive development of the two countries’ relations in all areas, especially in economy, trade, investment and ODA co-operation, over the past 25 years.

South Korea is now the largest foreign investor in Viet Nam with total foreign direct investment (FDI) value topping nearly US$60 billion, accounting for 18 per cent of Viet Nam’s total FDI.

Korea is also Viet Nam’s third biggest trading partner with two-way trade volume estimated at about $60 billion by the end of this year, up 33 per cent over 2016’s $45.1 billion and a 120-fold increase over the $500 million recorded in 1992 when the two countries first established diplomatic ties.

To develop the strategic partnership between the two countries in a deeper and more effective way, especially in trade and investment, the Deputy PM encouraged enterprises of the two countries to strengthen co-operation in prioritised sectors including hi-tech manufacturing, supply and auxiliary sector, IT, energy, hi-tech agriculture, research and development, finance-banking and infrastructure.

He also called on companies to take advantage of the free trade agreement between the two countries to increase imports and exports, working towards a target of $100 billion in trade value by 2020.

Viet Nam expects to expand shipments of agro-forestry and fishery products, as well as consumer goods and electronic parts to Korea, while wanting to import high-quality products to serve domestic production and consumption demand.

Dung said Viet Nam has targeted GDP growth of 6.5-7 per cent during 2016-20 with the number of middle-class people expected to rise from 10 per cent now to 50 per cent by 2035, opening significant potential to do business in the future.

“The Vietnamese Government is committed to creating a clear, favourable and fair business and investment environment for foreign investors, including South Korea, to meet the integration demand as well as international practices in the new development period,” Deputy PM said.

Korean Ambassador to Viet Nam, Lee Hyuk, appraised the partnership between the two countries as an incredible success, but said there is a lot of potential for fostering deeper co-operation and suggested building the strategic co-operation vision over the next 25 years.

Key partner

Lee In Ho, Korea’s Vice Minister of Trade, Industry and Energy, said Viet Nam plays a central role in South Korea’s policy in Southeast Asia, with the goal of lifting bilateral trade value to $100 billion by 2020, equivalent to half of Korea’s $200 billion trade target with Asian partners in 2020.

He said Korea’s government plans to enhance bilateral co-operation for mutual benefit and sustainability by supporting Viet Nam’s small and medium enterprises to join the global value chain, develop support industry and technology, while extending support for businesses in the two countries to exploit the bilateral free trade agreement, including customs and origin procedures.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, also urged Korean businesses to support Vietnamese micro, small and medium companies to develop and join the supply chain for Korea’s leading corporations, as well as share experience to develop big corporations and leading brands.

Korean investment in Viet Nam still focuses on manufacturing and processing (accounting for 69 per cent of total investment). However, with the rapid development of Industry 4.0, the two countries will face the challenge of declining employment due to automation.

Kim Jung Gwan, vice chairman of the Korea International Trade Association, cited an example of Adidas building a smart factory in Germany with labour decreasing to just 10 people from a standard 600 labourers.

Kim suggested that Korea and Viet Nam must also prepare for this process, by improving internet infrastructure, energy supply infrastructure, fostering professionals and technological competitiveness.

Industrial Revolution 4.0 is a major improvement on technology, everything connected to the Internet, artificial intelligence and big data. When these resources are effectively exploited, they create more value and change the size of the economy, he said, addingthat Korea wants to cooperate with Viet Nam to train skilled human resources.

The forum was organised by Seoul-based Maekyung Media Group, the Korea Cultural Industry Forum and the Viet Nam Chamber of Commerce and Industry (VCCI). – VNS