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By Lee Kyung-min
Vietnam is now the source of Korea's biggest trade surplus, which reached $34.26 billion (45 trillion won) last year, driven by exports that stood at $60.98 billion, outpacing imports which totaled $26.72 billion, trade ministry data showed.
The figure more than tripled compared to 2012, when Korea's trade surplus with the Southeast Asian country was just $10.22 billion. The two countries established diplomatic relations in 1992 and signed a bilateral free trade agreement in 2015.
Also at play is Vietnam's increasing role as a global production hub and as a manufacturing alternative to China. An increasing number of global firms are moving their production facilities to Vietnam from China, leading to a high overall trade volume. The Southeast country is also emerging as a generator of high-value products, such as organic light-emitting diodes (OLEDs) and semiconductors, reorienting its profile significantly away from labor-intensive goods and services.
The trade surplus is expected to continue displaying robust growth, unless countered by a significant easing of the drawn-out hegemonic competition between the U.S. and China.
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According to the Ministry of Trade, Industry and Energy, and Federation of Korean Industries (FKI), the country's largest business lobby, Vietnam became Korea's third-largest trading partner in 2022, generating the largest trade surplus for Korea.
The FKI's analysis of trade and investments between the two countries from 1992 to 2021 showed that Korea has mostly registered a surplus in trade with Vietnam.
Most notable is the fact that Korea's trade surplus with Vietnam is higher than the trade surplus with the U.S., which stood at $25.4 billion.
The total trade volume between Korea and Vietnam was $500 million in 1992, but increased 161-fold to $80.7 billion in 2021.
Korea's global export and import volume grew 8.4 times and 7.5 times, respectively, but exports to and imports from Vietnam rocketed 142 times and 240 times, respectively.
"Vietnam has established itself as an important trading partner of Korea, accounting for 8.8 percent of Korea's exports and 3.9 percent of imports," the FKI said.
At the top of the list of items exported to Vietnam were semiconductors, followed by display panels, sensors, wireless communication devices, petroleum products and synthetic resins.
Vietnam's major exports to Korea are wireless communication devices, apparel and computers.
Now, Korea is the largest foreign investor in Vietnam.
Data form Vietnam's statistics body showed Korea's investments to Vietnam totaled $78.5 billion in 2021, rising by $2.4 billion year-on-year to reach a record high.
Samsung Electronics was the largest foreign investor in Vietnam. The global semiconductor powerhouse invested $2 billion in Vietnam last year, raising the investment total to $20 billion.
The FKI said companies from the two countries should fortify economic efforts to identify mutually beneficial relationships, as underpinned by the business community of Korea seeking to increase the size of bilateral trade to $150 billion by 2030.
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