Samsung Electronics Is Vietnam's No. 1 Foreign Investor
Vietnam is expected to become Korea’s third-largest trading partner this year, the Federation of Korean Industries (FKI) said in a report on Dec. 21.
Trade between Korea and Vietnam was US$500 million in 1992 when the two countries normalized their diplomatic relations. It reached US$80.7 billion last year, a 161-fold increase. As of November this year, with US$81.1 billion, Vietnam became Korea’s third-largest trading partner, surpassing Japan (US$ 78.4 billion).
The two countries agreed in July this year to raise the value of bilateral trade to US$100 billion next year and to US$150 billion by 2030.
From 1992 to last year, Korea’s exports and imports swelled 8.4 times and 7.5 times, while its exports to and imports from Vietnam inflated 142 times and 240 times, respectively.
Korea has maintained a trade surplus since 1992. Last year, amid the COVID-19 pandemic, it recorded a trade surplus of US$32.7 billion, the largest ever. Korea posted the second-largest trade surplus in trade with Vietnam after Hong Kong (US$35.3 billion).
This year, Korea is expected to record the largest trade surplus in trade with Vietnam.
In July, the two countries agreed to seek ways to narrow the gap in bilateral trade.
Since the establishment of diplomatic ties between the two countries, the No. 1 trade item has been semiconductors. Korea’s major export products in the first year of bilateral trade were artificial filament fabrics, petroleum products, complex fertilizers, textiles and chemical machinery. They were replaced by semiconductors, flat panel displays and sensors, and wireless communication devices in 2021. In accordance with economic growth, Korea’s export products have changed to high-tech products from basic products.
Korea's top import item was wireless communication equipment, followed by clothing, personal miscellaneous goods, computers, flat-panel displays and sensors.
The scale of Korean investment in Vietnam also surged. According to the Vietnam National Statistical Office, Korea’s investment in Vietnam reached 9,203 cases and US$78.5 billion as of last year, ranking Korea first in terms of both numbers and amounts of investment. Korea’s foreign direct investment (FDI) in Vietnam soared from US$17 million in 1992 to US$2.4 billion in 2021.
The largest foreign direct investment company in Vietnam’s history is Samsung Electronics, which is expected to invest an additional US$2 billion this year, bringing its total investment to US$20 billion. LG Electronics is also planning to expand smartphone parts production by investing an additional US$4 billion in Vietnam.
This year, Korea-Vietnam relations were upgraded from a strategic partnership to a comprehensive strategic partnership.