Vietnam, August 23 –
SEOUL – Vietnam needs to have safeguard policies to encourage companies from the Republic of Korea (RoK) to voluntarily transfer technology to the Southeast Asian nation through their projects to Vietnamese partners, according to a scholar at the Korea Institute for International Economic Policy (KIEP). ).
In an interview with the Vietnam News Agency at the upcoming international conference on ROK-Vietnam cooperation, Kak Sung-il, director of KIEP’s Security Strategy Center, said Vietnamese companies should pay great attention to developing their own technologies in parallel with the promotion. International cooperation, thus making technology transfer more effective through cooperation with foreign companies operating in the domestic market.
RoK – Việt Nam bilateral relations have developed strongly in the past three decades and reaped fruitful achievements, especially in terms of economics, he said, adding that the two sides need to discuss more cooperation methods to sustainably develop relations in the future.
According to Kwak, economic cooperation is a bright spot in bilateral relations, with Vietnam now RoK’s third largest trading partner.
When the two countries established diplomatic relations in 1992, two-way trade was only US$490 million, which was equivalent to 0.3 percent of Korea’s total trade revenue. However, after 28 years, this number has increased to 7 percent in 2020.
In terms of investment, RoK becomes the largest foreign direct investor in Vietnam. In 2021, due to the impact of the COVID-19 pandemic, the RoK’s investment in Vietnam decreased, but many Korean companies still ranked Vietnam as the most promising country among ASEAN member states.
However, the official also mentioned the trade imbalance between the two countries and said that with the increase in bilateral trade, this imbalance is gradually worsening.
Increasing Vietnam’s agricultural exports to the RoK can help solve the trade imbalance, but this is only a short-term solution, he said, adding that Vietnam needs to have solutions to attract more investment from the RoK, thus helping Vietnamese companies to participate. Production network of RoK.
He said that if a strong supply chain can be built between the two countries, bilateral mutual relations will be promoted in a more sustainable manner.
He also said that Vietnam is making great efforts to attract foreign investment. In June 2020, Vietnam’s National Assembly approved a revised investment law that came into force in 2021. This is considered a major effort by the Vietnamese government to increase the transparency of institutions through legal regulations.
The expert suggested that Vietnam needs to boost production and technology capacity to join the supply chain.
Analyzing Vietnam’s export value, it can be seen that the proportion of domestic value added is still low, according to Kwak Sung-il. This means that most of the production, components and spare parts are located abroad and the localization rate of production is low. By the end of 2017, out of a total of 26,700 FDI projects in Vietnam, only 600 projects had technology transfer agreements.
Compared to other ASEAN countries such as Indonesia, Malaysia, the Philippines and Thailand, the value added rate on Vietnamese products is still low. Therefore, Vietnamese companies need to pay more attention to the development of technology along with international cooperation, thus helping to improve the effectiveness of technology transfer by cooperating with foreign companies operating in the domestic market, he said. – VNS