Vietnam rises as a trading partnerVietnam will become a vital trade partner of Korea’s, ranking second in terms of export volume by 2020, said the Korea International Trade Association Tuesday.
A report forecast that by 2020, Korea’s exports to Vietnam will reach $100 billion, ranking it second behind China.
Vietnam has been rapidly moving up in importance as a destination for Korea’s exports. After becoming the sixth major market in 2014, it climbed to fourth in 2015 and 2016. Last year, it rose to No. 3 behind China and the United States.
The proportion of Korean products among Vietnam’s imports has risen since 2007. Last year, the figure reached an all-time high of 22.1 percent, compared to 8.5 percent a decade earlier.
The report credited a Korea-Vietnam free trade agreement that went to effect in Dec. 2015. It compared imports and exports two years before and after the pact went into effect and found that both had increased - by 60.5 percent for Korea’s exports and 61.1 percent for imports.
Exports to Vietnam doubled in the last three years from $22.3 billion in 2014 to $47.8 billion last year. This is significant considering the fact that total exports fell in 2015 and 2016. Even during that period, exports to Vietnam grew 24.2 percent in 2015 and 17.5 percent year in 2016.
However, the report pointed out that most of Korea’s exports to Vietnam were intermediate goods and manufacturing equipment. Consumer products accounted for merely 4 percent.
“Vietnam’s consumer market has good growth potential with fast economic growth, rising incomes and the ongoing expansion of the middle-class,” said the report. “There’s a rise in demand for good quality, clean and safe products and combined with Hallyu [the wave of Korean pop culture], a preference for Korean products is on the rise.”
Vietnam’s economy grew 6.8 percent year-on-year in 2017 - higher than the global average of 3.6 percent and growth in Asean countries at 5.2 percent.
BY SONG KYOUNG-SON [firstname.lastname@example.org]