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South Korea trade to reach $100 billion by 2020

Released at: 17:55, 17/10/2017

South Korea trade to reach $100 billion by 2020

Photo: Quynh Nguyen

Conference hears of promising future for Vietnam-South Korea trade as two countries celebrate 25 years of diplomatic relations.

by Quynh Nguyen

Two-way trade between Vietnam and South Korea is expected to rise to $100 billion by 2020, Mr. Park Chun Ho, General Director of the Korea Trade-Investment Promotion Agency (KOTRA) in Hanoi, told a conference held on October 17 as part of the 25th anniversary of Vietnam-South Korea diplomatic relations entitled “Supporting Vietnamese Enterprises in Applying the Vietnam-South Korea Free Trade Agreement”.

The relationship between the two countries has flourished in many fields over the 25 years, especially in investment and trade. Two-way trade rose from a mere $500 million in 1992 $43.4 billion in 2016, with South Korea become Vietnam’s third-largest trade partner. Vietnam, meanwhile, is South Korea’s fourth-largest trading partner.

In 2014, South Korea surpassed Japan to become the largest foreign investor in Vietnam, with 6,324 projects and capital of $55.8 billion as at September 20 this year.

With the free trade agreement officially coming into force, cooperation in investment and trade between the two countries will be further strengthened, according to Mr. Bui Huy Son, Director of the Trade Promotion Agency at the Ministry of Industry and Trade.

Manufacturing and processing, which leads in export growth from Vietnam to South Korea, recorded turnover of $5.4 billion in the first six months this year, up 28.6 per cent year-on-year. Agriculture and aquatic products reached $497.2 million, up 29.3 per cent. Other products South Korea imports from Vietnam, such as machinery, equipment, electronic products, spare parts, textiles and footwear materials, increased by between 16 and 20 per cent.  

Export turnover in September reached $19 billion, up 23.6 per cent over the same period of 2016. The first nine-month figure was $154 billion, up 19.8 per cent year-on-year. Import turnover in the month reached $18.6 billion and $154.5 billion in the first nine months, up 23.1 per cent year-on-year.

Vietnam therefore recorded a trade deficit with South Korea of $442 million in the first nine months of the year. While the domestic sector recorded a deficit $18.08 billion, the foreign-invested sector recorded a surplus of $17.64 billion.

The deficit with South Korea is due to Samsung importing large quantities of machinery and equipment to produce new products such as the Galaxy Note 8. Vietnam’s exports to the country have remained stable since the beginning of the year.

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