South Korea – A big market of Dong Nai

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Production of machinery components for export into S. Korea at a company in Loteco Industrial Zone (Bien Hoa City)

According to the Department of Industry and Trade, the export-import turnover of Dong Nai and South Korea in the first 4 months of 2020 was over USD 1 billion. In particular, Dong Nai enterprises imported from Korea more than USD 748 million and exported about USD 270 million.

Trade increased rapidly

VKFTA took effect on December 20, 2015, helping trade between Korea and the province increase rapidly, in the past 4 years, exports and imports between Dong Nai - Korea increased by 14-18% per year. Up to now, Korea has become one of the four major trading partners of Dong Nai after the United States and China. Specifically, South Korea is Dong Nai's fourth largest export market. Products that Dong Nai enterprises export to Korea are mainly textile fibers, wood products, machinery, spare parts and textiles.

Mr. Le Bach Long, Vice Chairman of Dong Nai Young Entrepreneurs' Organization, Director of Nam Long Company Limited (Long Thanh District) said: “VKFTA has helped Vietnamese enterprises' goods enter the Korean market more smoothly and increased their competitiveness with similar products of other countries. About 4 years now, export turnover of Nam Long's rubber gloves to South Korea has increased.”

Mr. Pham The Linh, Director of The Linh One Member Company Limited (Bien Hoa City) said: “My company is importing a lot of fabrics and materials from Korea to produce blankets, drap, pillows, mattresses for domestic consumption and export. We always chooses to import raw materials from the above market because of the high quality of its products and various designs.” According to the schedule of VKFTA, import and export taxes with Korea are decreasing to 0%, so businesses in Dong Nai have taken advantage of the trade expansion incentives.

Import-export balance

Vietnam's plan is that by 2020, bilateral trade between Vietnam and Korea will reach USD 100 billion. Concurrent with this issue, Vietnam will also remove all difficulties, create opportunities for domestic enterprises to boost exports to the Korean market to balance trade between the two countries. In Dong Nai, South Korea is a big trade deficit with USD 478 million in the first 4 months of 2020.

About the past 3 years, Dong Nai enterprises have diverted imports from China to Korea because this market has many high-class raw materials, diverse competitive prices, to meet the requirements of orders that require high quality as well as models. In the first 4 months of this year, Dong Nai's export turnover to South Korea increased by 6% and imports decreased by more than 12%. This is due to the effects of the COVID-19 epidemic, which made trade between the two markets difficult, leading to slower growth.

At the end of January, 2020, Mayor of Gimhae City Heo Seong-gon - Gyeongnam Province (South Korea) paid a working visit to Dong Nai in order to expand economic cooperation. According to Heo Seong-gon, Gimhae City has about 7.5 thousand businesses. In particular, there are thousands of businesses seeking to expand investment, linking with foreign businesses to produce, import and export goods. For Vietnam, Gimhae City enterprises are very attentive to Dong Nai, because this is where many Korean businesses are operating, which is easy to increase bilateral trade.

According to Chairman of the Provincial People's Committee Cao Tien Dung, Korea has invested in Dong Nai more than 400 projects with a total registered capital of over USD 6.6 billion. The majority of Korean enterprises investing in the province were quite successful. Dong Nai considers Korea a potential market, so it annually organizes trade promotion trips to attract investment and increase import and export turnover between the two sides.

Korea is a market with much attention from Dong Nai enterprises, the possibility of bilateral trade will reach 3.5 billion USD in 2020.

By Vi Quan