Vietnam PM’s visit set to trigger stronger investment from S Korea: KoCham

Vietnamese Prime Minister Pham Minh Chinh’s ongoing official visit to South Korea is expected to create a breakthrough in investment from the Northeast Asian country, matching potential of the best-ever bilateral relations, said a business representative.

PM Chinh and his wife arrived in Seoul on Sunday afternoon to start a four-day visit to South Korea, with which Vietnam elevated diplomatic ties to a comprehensive strategic partnership in December 2022, on par with China and the U.S.

In an interview with The Investor, Hong Sun, chairman of the Korean Chamber of Business (KoCham) in Vietnam, noted that the visit will provide an opportune platform for PM Chinh to hold dialogues with Korean businesses.

During the visit, a large number of Korean enterprises will hold talks with Chinh and participate in the Korea-Vietnam Business Forum. The meetings and other forums will provide more momentum to Korean investment flows into Vietnam as investment potential remains huge, Hong Sun commented.

According to the Foreign Investment Agency under Vietnam’s Ministry of Planning and Investment, South Korea has slid to the fifth position among the largest foreign investors in Vietnam, down from a solid second place in the preceding two years.

In the first half of this year, foreign direct investment (FDI) from South Korea increased 15.8% year-on-year to reach $1.41 billion, ranking fourth among 84 economies investing in Vietnam.

Hong Sun attributed slower FDI inflows from South Korea to several objective causes. PM Chinh’s visit will likely remove the hurdles and funnel investment from that country, he added.

During the visit, Vietnamese government head will listen to Korean investors’ concerns and direct relevant agencies to handle them. For example, several Korean investors are implementing gas-fired power plants in the central province of Quang Tri and the southern province of Long An, while some others are seeking to convert coal-fueled power plants into gas-fired facilities. They are stuck due to administrative issues.

Hong collaborated that most large-scale projects are facing troubles while smaller ones in the renewable energy sector are getting positive responses from the Government Office and Deputy Prime Minister Tran Hong Ha.

Commitments to be made by a high-ranking Vietnamese leader will assure Korean investors, Hong Sun said.

Fostering economic, high-tech cooperation

In an interview with local media on Saturday, Vietnam’s Standing Deputy Foreign Minister Nguyen Minh Vu highlighted that PM Chinh’s Seoul visit is Vietnam’s first high-ranking trip since the two countries upgraded their relationship in 2022.

Among over 30 activities being held within the framework of the visit, Chinh will attend and deliver keynote speeches at three forums on business; tourism promotion and cultural cooperation; and labor between the two countries. In addition, he will chair two dialogues with Korean economic agencies and enterprises, and with Korean experts in the fields of semiconductors and artificial intelligence (AI).

The PM will hold talks with a number of Korean chaebols investing in Vietnam and visit Samsung’s semiconductor plant.

Vu noted that economic cooperation is always a bright spot and an important pillar that contributes to promoting the substantive evolution of bilateral relations.

South Korea continues to maintain its leading position in FDI, with a total accumulated registered capital of $87 billion. It is also a major trade partner, with bilateral turnover reaching nearly $80 billion in 2023, and a leading partner in official development assistance (ODA), tourism, and labor.

Besides, South Korea possesses strengths in economic development, high technology, and AI. Through engagements with the Korean business community during this visit, Vietnam expects the two sides to improve quality and quantity in the fields of economic cooperation, trade, investment, and supply chain diversification.

Furthermore, Vietnam hopes to enhance cooperation in emerging fields such as semiconductors, supporting industries, digital transformation, green transition, circular economy, and climate change adaptation; and promote bilateral cooperation in labor, culture, and tourism.

Vu expressed hope that the two sides can achieve the goal of soon increasing bilateral trade turnover to $100 billion and reach the $150 billion mark by 2030 in a balanced and sustainable manner.

South Korea is Vietnam’s third largest trade partner, just behind China and the U.S. In the first five months of 2024, bilateral trade rose 8.9% year-on-year to $32 billion, with Vietnam incurring a deficit of $11.5 billion, up 5.5%, according to the Ministry of Industry and Trade.