South Korea Enters Strategic Partnership With Vietnam to Boost Trade

South Korean President Yoon Suk Yeol takes a question during a news conference to mark his first 100 days in office at the presidential office in Seoul, Aug. 17, 2022. The Canadian Press/AP-POOL, Chung Sung-Jun

Vietnam and South Korea on Monday agreed to elevate their bilateral ties into a comprehensive strategic partnership, as the latter seeks to diversify its trade partners and reduce reliance on China.

Vietnamese President Nguyen Xuan Phuc embarked on a three-day trip to Seoul, where he met with his South Korean counterpart, Yoon Suk-yeol, to discuss economic and security cooperation.

Both countries agreed to form a comprehensive strategic partnership and signed “various cooperation documents” to expand cooperation in economic and security issues, Yoon said in a statement.

“Both countries are already optimal partners in trade and investment. The government will also provide active support so that businesses from both countries can further promote trade and investment,” he added.

Yoon said that his nation would actively support Vietnam in strengthening its maritime law enforcement capabilities, adding that both sides will review measures to improve their security strategic dialogue.

South Korea seeks to tap into Vietnam’s rare earth minerals and boost cooperation in the high-tech industry. The two countries also agreed to cooperate in finance, technology, information, infrastructure, and energy.

“We shared the view that there is great potential for cooperation between the two countries in relation to the development of rare earth, which are abundant in Vietnam, and agreed to seek specific ways to cooperate,” Yoon stated.

Cooperation with Vietnam aligns with Yoon’s goal of diversifying South Korea’s trade partners in Southeast Asia. Yoon said in a November meeting that his government “will provide all possible assistance to advance efforts of the country’s exporters,” including opportunities in the U.S. market.

South Korean technology giant Samsung Electronics, which is Vietnam’s biggest foreign direct investor, invested an additional US$841 million into its manufacturing facility in Vietnam this year, Vietnam Net reported.

South Korea Shifts Sales to US

Aside from Southeast Asia, South Korean semiconductor giants have rapidly shifted sales to the U.S. market while reducing their reliance on China amid the escalating strategic rivalry between the United States and China.

Recent business reports released by Samsung Electronics and SK Hynix showed their sales in China dropped 3.77 percent and 5.39 percent, respectively, in the third quarter (Q3) compared to the previous quarter (Q2).

In terms of dollar amount, Samsung’s Q3 sales in China dropped about $2.2 billion compared to Q2, while SK Hynix’s Q3 in China slumped by about $1.1 billion.

On the other hand, sales of the two chip giants in the United States have increased significantly. Samsung’s Q3 sales increased by about $1.5 billion, while SK Hynix gained about $700 million compared to Q2.

According to the South Korean newspaper Seoul Economic Daily (SED), Samsung and SK Hynix hastily relocated their sales offices from China to the United States in advance “to reduce the dangerous burden brought about by the escalating semiconductor rivalry between the two nations.”

SED added that China’s long-term economic depression was also one of the crucial factors pushing the companies to strategically depart from China.

Lisa Bian and Sean Tseng contributed to this report.