Việt Nam-RoK cooperation should focus on technology transfer: expert
VIETNAM, August 23 –
SEOUL – Việt Nam must have protective policies to encourage companies from the Republic of Korea (RoK) to voluntarily transfer technology to Vietnamese partners as part of their projects in the Southeast Asian country, according to a researcher from the Korea Institute for International Economic Policy (KIEP).
In a recent interview with Vietnam News Agency on the upcoming international conference on RoK – Việt Nam cooperation, Kawk Sung-il, director of KIEP’s security strategy center, said that Vietnamese companies should pay great attention to the development of their own technologies along with promoting international cooperation, thus making technology transfer more effective through cooperation with foreign companies operating in the domestic market.
Bilateral relations between the ROK and Việt Nam have developed strongly over the past three decades and reaped fruitful results, especially in economic terms, he said, adding that the two sides should discuss more methods of cooperation to sustainably develop relations in the future.
According to Kwak, economic cooperation is a positive point in bilateral relations, as Việt Nam is now the Republic of Korea’s third largest trading partner.
When the two countries established diplomatic relations in 1992, bilateral trade turnover amounted to only US$490 million, or 0.3% of the Republic of Korea’s total trade revenue. However, 28 years later, in 2020, this figure has risen to 7%.
In terms of investment, the Republic of Korea becomes the first foreign direct investor in Việt Nam. In 2021, due to the impact of the COVID-19 pandemic, the ROK’s investment in Việt Nam decreased, but many Korean companies still ranked Việt Nam as the most promising country among countries ASEAN members.
However, the official also mentioned the trade imbalance between the two countries, saying that as bilateral trade increases, the imbalance is also gradually worsening.
Increasing Việt Nam’s agricultural exports to the Republic of Korea can help resolve the trade imbalance, but it is only a short-term remedy, he said, adding that Việt Nam must have solutions to attract more investment from the Republic of Korea, thus helping Vietnamese enterprises to participate in the production network of the Republic of Korea.
If a solid supply chain between the two countries can be formed, bilateral mutual relations will be promoted more sustainably, he said.
He also noted that Việt Nam had made great efforts to attract foreign investment. In June 2020, the National Assembly of Việt Nam approved the amended investment law which came into effect in 2021. This is seen as a great effort by the Vietnamese government to improve the transparency of the institution through legal regulations.
The expert suggested that Việt Nam should promote production and technology capacity to join the supply chain.
By analyzing the value of Việt Nam’s exports, we see that the share of national added value is still low, according to Kwak Sung-il. This means that most of the production, components and spare parts are located overseas and the localization rate of products is low. At the end of 2017, out of a total of 26,700 FDI projects in Việt Nam, only 600 projects had technology transfer contracts.
Compared with other ASEAN countries such as Indonesia, Malaysia, the Philippines and Thailand, the value added rate of Vietnamese products is still low. Therefore, Vietnamese enterprises should pay more attention to the development of technologies in collaboration with international cooperation, thus contributing to improving the efficiency of technology transfer through cooperation with foreign enterprises operating in the domestic market, a- he declared. —VNS