Korea-Vietnam cooperation seeks cost cuts, tech gains

The business communities in South Korea and Vietnam are anticipating reductions in production costs and technology advancements, respectively, from bilateral economic cooperation between the two nations, according to a survey released Thursday.

The survey, conducted by the Korea Chamber of Commerce and Industry, collected responses from a total of 257 business and industry officials from Korea and Vietnam who attended the Korea-Vietnam Business Forum held in Seoul on July 1.

In the survey, Korean respondents reported that they expect reductions in production costs as the top benefit of bilateral cooperation in the business environment, followed by supply chain stabilization, new business opportunities and market expansion. In contrast, Vietnamese respondents highlighted technology advancements as their top response but similarly emphasized supply chain stabilization and new business opportunities as their subsequent priorities.

When considering the anticipated effects on the national economy, they also showed different priorities, with Korean respondents highlighting increased investment and trade, while Vietnamese respondents emphasized increased employment.

In the meantime, both Korean and Vietnamese business officials ranked the electronics and electrical industry first in terms of sectors expected to generate the most economic value through the bilateral cooperation. Additionally, they highlighted the information technology and semiconductor industries as having the most growth potential. While Koreans picked the green energy sector as the second-most promising, Vietnamese identified the finance industry and fintech as the second-most.

“The Vietnamese government has been focusing on fostering the digital economy and promoting ecofriendly transition policies. This has led to a fintech boom in the country with the emergence of unicorn companies like VNPAY and Momo. In contrast, having already experienced a fintech boom, Korean companies seem to be paying more attention to the growth potential of Vietnam’s green energy market," KCCI said.

When asked about priorities for government policies to implement, both the Korean and Vietnamese respondents identified the expansion of investment incentives as essential. In addition, the Koreans present requested eased business regulations, whereas the Vietnamese respondents emphasized the need for expanding business partner discovery opportunities.

“The survey has given us valuable insights into the expectations of business leaders from both countries regarding the positive synergies of economic cooperation. It has also helped us identify promising areas for future collaboration,” said Park Il-jun, executive vice chair of KCCI.

“Based on the survey results, the KCCI plans to identify the specific projects required to expand bilateral economic cooperation, in coordination with the KCCI Vietnam Office and the Korea-Vietnam Economic Cooperation Council," said Park.