VietNamNet Bridge – A survey conducted by the Korea International Trade Association (KITA) has found that the majority of Korean investors who plan to scale up their outward investment plan plan to come to Vietnam.

The third wave 

South Korea has been recognized as one of the biggest foreign direct investors in Vietnam. According to the Ministry of Planning and Investment, South Korea committed the highest investment capital of $43.63 billion for 4,777 projects last November.

The figure proves to come in line with KITA’s survey which showed that 49 percent of 540 businesses which were asked about the investment environment in 32 countries affirmed they would expand their business in Vietnam.

While Kumho Asiana, Posco, Daewoo and Samsung are listed as the first-generation Korean investors in Vietnam, Samsung, LG, Lotte and CJ are considered the representatives of the second-generation wave. And now analysts talk about the third wave investment which will come when the Vietnam-South Korea FTA takes effect.

Analysts believe that the third-generation investors would mostly pour money into agriculture, education, transport infrastructure, energy, environment, healthcare, finance, processing and manufacturing.

“Textiles & garments is the field which specially attracts Korean businesses,” commented Park Sag Hyup, director of the Korean Trade Promotion Agency in HCM City.

Meanwhile, according to Kim Su Ho from the Republic of Korea’s Consulate General in HCMC, Korea believes Vietnam’s economic development potential is very high compared with other regional countries. Therefore, they are interested in pouring capital into the finance & credit sector.

In fact, Korean first-generation investors have expanded their business in Vietnam. Samsung has committed to inject $14.2 billion into Vietnam, planning to invest in some other business fields including energy, shipbuilding and airports. 

Lotte, which has developed a series of projects in Vietnam, has recently proposed a $2 billion project in HCMC named Eco Smart City. Meanwhile, CJ, which runs projects in the entertainment sector, has shown its interest in agriculture projects.

FTA to serve as jumping board

Samsung Electronics has relocated its production lines from China to Vietnam. LG Electronics, another giant, has spent $1.5 billion on a smartphone & household electronics assembling factory in Hai Phong City earlier this year.

Meanwhile, according to Nikkei, Doosan Engine, the South Korean leading heavy industry group, considers Vietnam the ideal destination for the time to come.

The Vietnam-ROK FTA is believed to be the ‘jumping board’ for South Korean investors to enter the Vietnamese market.

In the textile & garment sector, for example, the tariff will be cut from 3-18 percent to zero percent as soon as the FTA takes effect.  

These include the $660 million Hyosung project in Dong Nai province, the $30 million Panko in Quang Nam province and $8.5 million Viet Pan Pacific in Thanh Hoa.

 WTO Center/Vietnamnet

18/01/2016

Quote from: “http://wtocenter.vn/news/fta-bring-south-korean-investment-third-fdi-wave“