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Vietnam - South Korea Investment Focusing on Electronics Industry

Mr Nguyen The Phuong, Deputy Minister of Planning and Investment, said Vietnam is in the process of new development, driven by increased macroeconomic stability. In 2014, Vietnam ranked 9th in the world in investment attractiveness index. Currently, the Government of Vietnam is making every effort to achieve the goal of building the ASEAN Economic Community with a total population of over 600 million and annual GDP of US$3 trillion, which is expected to reach US$10 trillion by 2030. In May 2015, Vietnam officially signed free trade agreements with South Korea and Eurasian Economic Union. It is pushing the conclusion of negotiations of the European Union and Trans-Pacific Partnership (TPP) agreements which will open up free trade relations with 55 countries, including 15 G20 countries.


South Korea is now the largest direct foreign investor in Vietnam with US$39.16 billion of registered capital, including more than 240 electronics projects with US$16 billion. These projects have played significant roles in restructuring manufacturing industry, boosting economic growth and stabilising trade balance. Therefore, Vietnam will try its best to support South Korean companies, especially electronics and high tech firms, he said.

 

AKC General Secretary Kim Young Sun said, given increasingly developed trade and economic cooperation between the two countries, key industries are being given priorities. The workshop is a valuable chance to open up many cooperation opportunities in electronics and supporting industries, thus helping foster economic activities of the two countries. He added that Vietnam still has a lot of untapped potential, for example, golden-age population, studiousness and capable young people who are not inferior to people from any countries. Recently, international economists called Vietnam the "Asian Dragon". In addition, Vietnam and South Korea have upheld the fine relations for over 20 years. The two-way trade turnover reached US$30 billion in 2014, 30 times more than the first year of trade. More than 4,400 South Korean companies are doing business in Vietnam and going with Vietnam to the world. In the past time, the two countries deepened cooperation in apparels, footwear and light industries. Currently, Vietnam and South Korea are expanding cooperation to high-valued fields like electronics and information technology, a step to realise the target of US$70 billion of two-way trade revenue in 2020.

 

Mr Do Nhat Hoang, Director of the Foreign Investment Agency (FIA), said Vietnam always provides the best conditions for investors. If investors do not pollute the environment and consume much power, they are always much appreciated. Vietnam will not have an aging population in the next 30-40 years from now. Thus, South Korean companies will always feel assured of manpower supply in Vietnam.

 

According to FIA’s data, foreign investors invested in 18,529 projects with a total registered capital of US$257 billion as of June 2015. Annual FDI disbursements are in the range of US$10-12 billion. The biggest investors are South Korea, Japan, Singapore, Taiwan and the US. Foreign investors mainly pour their money into manufacturing, real estate, construction, hotel and restaurant services. South Korea ranked first out of 103 countries and territories investing in Vietnam with a total of 4,459 projects and US$39.16 billion of registered capital. South Korean companies employ about 70,000 Vietnamese workers and contribute 25 per cent to Vietnam’s total export value. All big South Korean firms have investment projects in Vietnam, including Samsung, LG, Hyundai, SK and Lotte. Processing, manufacturing and real estate draw most investment capital from South Korean investors.

 

Assessing investment cooperation prospects between Vietnam and South Korea, Deputy Minister Nguyen The Phuong said foreign investors pledged to invest US$257 billion in Vietnam and they disbursed US$130 billion for more than 18,500 projects. South Korea took the lead with US$39.16 billion of registered capital for 4,459 projects, including more than 240 electronics projects with US$16 billion. These projects have played significant roles in restructuring manufacturing industry, boosting economic growth and stabilising trade balance in recent years.

 

He also revealed the focus on electronics industry in the coming time. Vietnam will make a breakthrough in FDI attraction, especially from countries with developed electronics industry as well as G20 countries. The country will promote technology transfer, set up electronics industry clusters for FDI and domestic enterprises, attract big projects from multinational corporations which are usually entailed by supporting companies, develop supporting industries, introduce Law on SME Support, improve the investment and business environment, enhance national competitiveness by reforming administrative procedures, raising human resource quality, upgrading transport infrastructure, energy and logistics industries. With the strategic orientation s, the opportunities for South Korean investors in Vietnam are huge and promising, Deputy Minister Nguyen The Phuong concluded.


(Source: http://vccinews.com)

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