Việt Nam-RoK cooperation should focus on technology transfer: expert

VIETNAM, August 23 –

SEOUL — Viet Nam should have safeguard policies to encourage companies from the Republic of Korea (RoK) to voluntarily transfer technology to Vietnamese partners through their projects in the Southeast Asian nation, according to a scholar at the Korea Institute for International Economic Policy (KIEP).

In a recent interview given to Vietnam News Agency regarding the upcoming international cooperation conference between RoK and Việt Nam, Kawk Sung-il, director of KIEP’s strategic security center, said that Vietnamese companies should pay close attention to developing their own technologies in parallel with the promotion of international cooperation, which makes the transfer of technology through cooperation with foreign companies operating in the domestic market more effective.

Bilateral relations between the Republic of Korea and Vietnam have developed strongly over the past three decades and reaped fruitful achievements, especially in terms of economy, he said, adding that the two countries should discuss more cooperation methods to develop relations sustainably in the future.

According to Kwak, economic cooperation is a bright spot in bilateral relations with Vietnam, which is now the ROK’s third largest trading partner.

At the time the two countries established diplomatic relations in 1992, two-way trade turnover amounted to only US$490 million, equivalent to 0.3 percent of the ROK’s total trade revenue. However, 28 years later, in 2020, the figure has increased to 7 percent.

In terms of investment, the ROK has become the largest foreign direct investor in Vietnam. In 2021, due to the impact of the COVID-19 pandemic, the Republic of Korea’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, saying that with the increase in two-way trade, the imbalance is also gradually worsening.

Increasing Vietnam’s agricultural exports to the Republic of Korea may help resolve the trade imbalance, but it is only a short-term remedy, he said, adding that Vietnam must have solutions to attract more investment from the Republic of Korea, such as thereby helping Vietnamese companies to participate in the ROK production network.

If a strong supply chain can be formed between the two countries, bilateral mutual relations will be promoted more sustainably, he affirmed.

He also noted that Vietnam is making great efforts to attract foreign investment. In June 2020, the National Assembly of Vietnam approved the amended Investment Law, which came into effect in 2021. This is considered a major effort by the Vietnamese government to increase the transparency of the institution through legal regulations.

The expert suggested that Việt Nam should promote production and technological capacity to join the supply chain.

When analyzing the value of Việt Nam’s exports, it can be seen that the share 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 degree of product localization is low. By the end of 2017, among a total of 26,700 FDI projects in Vietnam, only 600 projects had technology transfer contracts.

Compared to other ASEAN countries such as Indonesia, Malaysia, the Philippines and Thailand, the level of value added in Vietnamese products is still low. Therefore, Vietnamese companies should pay more attention to technology development together with international cooperation, thereby helping to improve the efficiency of technology transfer through cooperation with foreign companies operating in the domestic market, he said. — VNS

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