Korea-Vietnam trade soars by 43 percent this year on FTA

Bilateral trade between South Korea and Vietnam increased by 43 percent on-year to reach $58.5 billion this year, making Vietnam South Korea’s fourth-largest trading partner, according to a report by the Trade Ministry on Tuesday.

Bilateral trade has increased for three consecutive years since the free trade agreement between the two nations took effect in 2015.

According to the report by the Ministry of Trade, Industry and Energy, Korea’s combined exports to Vietnam reached $43.7 billion between January and November this year, up by 48.4 percent on-year.

Exports of semiconductors, displays, wireless communication equipment and electronic parts accounted for 46.7 percent of the exports to Vietnam.

Meanwhile, Korea’s share of Vietnam’s import market increased to 22.3 percent as of October this year. The figure came right next to China, who tops Vietnam’s import market with a 27.2 percent share.

Korea’s trade surplus also increased to $28.9 billion in the first 11 months of the year, fast tailing China and Hong Kong.

Korea’s imports from Vietnam also increased by 22.3 percent to $14.8 billion during the same period, mostly in wireless communication equipment, clothing and other daily necessities.

Korea is also the country that has made the largest amount of investments in Vietnam. Combined investments made by Korean companies in the Southeast Asian country have reached $54.5 billion since the Ministry of Planning and Investment of Vietnam started to collect related data in the 1980s.

Some 5,000 Korean firms currently run businesses in Vietnam. They include Samsung Electronics, LG Electronics, Doosan Engineering & Construction and Korea Electric Power Corp.

Meanwhile, bilateral trade between China and Korea this year showed signs of recovery as well, largely backed by the swift exports of semiconductors and petroleum products, the Trade Ministry said in a separate report. Bilateral trade between Korea and China as of November reached $217.5 billion, up 13.6 percent on-year.

As of November, Korea’s combined exports to China had reached $128.3 billion, up by 14.1 percent on-year. In particular, exports of semiconductors and petroleum products posted significant increases of 56.5 percent and 31.4 percent on-year, respectively.

Korea’s imports from China also grew by 12.9 percent to reach $89.2 billion.

Korea’s trade surplus with China marked 39 billion won ($35.9 million) as of end-November, up by 16.7 percent on-year.

However, investments between the two nations marked sharp decreases.

As of the third quarter of this year, Korea’s investments in China fell by 20.2 percent, while China’s investments in Korea plunged by 63.4 percent.

By Shim Woo-hyun (ws@heraldcorp.com)