Korea's Recent Export to Vietnam and Implications

5 Pages Posted: 28 Apr 2016

See all articles by Jae-Ho Lee

Jae-Ho Lee

Korea Institute for International Economic Policy

Date Written: February 5, 2016

Abstract

In 2015, while Korea’s total exports were sluggish mainly due to weak global demand, its exports to Vietnam have increased rapidly, and Vietnam emerged as Korea’s top 3rd export destination. Since the establishment of diplomatic relations in 1992, Korean investors took advantage of Vietnam’s low-wage in labor-intensive industry. From the mid 2000s, they started to shift their focus from labor-intensive to capital and technology-intensive industries. This has been driven by massive investment by SEC (Samsung Electronics Co. Ltd) in mobile phone manufacturing. The strategic investment by SEC is transforming Vietnam’s industrial structure from labor-intensive to technology-intensive, and has put Vietnam on the top of the list of world’s mobile phone producing countries. With Korea-Vietnam FTA ratified in 2015, and the year 2016 will offer new opportunities to promote cooperation between Korea and Vietnam. Future bilateral economic cooperation should not simply stop at demanding higher liberalization levels, but support building a production network that promotes a ‘win-win’ cooperative relationship for mutual benefits.

Keywords: Vietnam, FDI, Export, Production network, virtuous circle

Suggested Citation

Lee, Jae-Ho, Korea's Recent Export to Vietnam and Implications (February 5, 2016). KIEP Research Paper No. World Economy Update-16-5, Available at SSRN: https://ssrn.com/abstract=2771545 or http://dx.doi.org/10.2139/ssrn.2771545

Jae-Ho Lee (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

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