South Korea and Vietnam continue to work together, boosting the Vietnamese economy. At the same time, South Korean tourists flock to Vietnam. How closely are the two linked?
Evidence of how far relations between South Korea and Vietnam have developed came in an unusual form in Hue. The mayor of South Korea’s Namyangju City gifted a statue of a naked man to his Vietnamese counterpart. Once complete, the statue will sit in Ba Thang Hai Park and will carry a message – in Korean – urging respect and understanding.
Plenty of South Koreans will have the opportunity to see it. Tourism between the two countries is on the up. For the first time, more than 1 million Korean tourists headed to Vietnam in the first quarter of the year.
At the same time, South Korean companies are expanding their operations in Vietnam. Investment continues to flow. For a quarter of a century, South Korea and Vietnam have been strengthening their bilateral ties. The effects are being felt across multiple sectors – from commerce to tourism and security.
Economic and commercial ties between the two countries are strong
Trade between the two countries has increased by a factor of 34 since 2000. As South Korea looked elsewhere after its relations with China soured in 2017, Vietnam has been one of the biggest beneficiaries. Only the US and China import more from the Korean Republic than Vietnam.
The two countries have also deepened cooperation in other areas. In late May, they launched a Vietnam-South Korea centre for IT cooperation – the second of its kind in the country.
Soon after, Samsung SDS confirmed a collaboration with leading firm CMC Corporation, focusing on smart factories and cybersecurity. Samsung has a reported 25% stake in the company. The partnership builds on an earlier agreement from 2018.
This follows an established model of how Korean companies work with their Vietnamese counterparts for mutual benefit. Korean companies invest in the country by building factories and backing training programmes. Enticed by the Vietnamese government’s four-year tax hiatus for South Korean companies, firms like Samsung and LG have set up operations in Vietnam.
Meanwhile, tourism between the countries is on the rise
Tourism records are shattering as more people head to Vietnam for their annual getaways. Although more people come from China than from anywhere else, South Koreans are closing the gap. Visits from China are falling as those from South Korea increase.
Why do so many Koreans head for Vietnam? Many are attracted by the prospect of low-cost travel.
Korean companies investing in Vietnam has created a huge expat community. “Hanoi and Ho Chi Minh City both have Korea towns where a significant amount of South Korean expats live,” explained Mark Gwyther, who founded MGT Management Consulting, a tourism consultancy in the country.
Expats act as excellent advocates for their adopted country. Korea’s continued support of Vietnam’s economy has fostered familiarity between the two nations. That spills over into the tourism sector.
The Vietnamese government and local businesses have been proactive
At the same time, the Vietnamese government has prioritised tourism to boost the economy. “It is better to get one million tourists than try to find one million tons of crude oil because tourism is more eco-friendly and safe for the economy,” said Deputy Prime Minister Vuong Dinh Hue last year.
The Vietnamese tourism industry has recognised the increase in Korean visitors and adapted accordingly.
Those that arrive are received warmly. They can easily find Korean food and tour guides that speak their language. This comes as a result of the close business links between the two countries.
Movv, a start-up with headquarters in Seoul, launched a chauffeur service in Ho Chi Minh City in 2017, allowing travellers to book a van to transport them around. “Language and transportation have been identified as the biggest challenges when travelling in Korea,” explained founder Jung Jong-Tae. “With the chauffeur service, foreign tourists will be able to get immersed in local culture.”
Movv targets South Korean tourists. Jung aims to widen his approach and partner with hotels, airlines and car-hailing services. He already has deals in place with two Korean companies: airline Jeju Air and car company KC Motors.
What lies ahead for the partnership?
In South Korea, the partnership is seen as a success story. The north Asian nation supports the economic development of its southern partner through a steady stream of investment, and both sides reap the benefits as trade and tourism increases.
Although the Vietnamese government is working hard to keep visitors flocking to its shores, it could still do more. Travel agencies want to see tourist visas doubled in length from 15 to 30 days. They want processes changed which could attract even more visitors from South Korea and elsewhere.
The links between Vietnam and South Korea are long-established and well developed. The strategic partnership between the two countries stretches back to 2009. After Korean President Moon Jae-In launched his New Southern Policy in 2017, the two nations committed to long-term defence cooperation.
However, nothing should be taken for granted. Both countries have the shared experience of having to look elsewhere as relations with China soured. There are also issues in the workplace, where Korean and Vietnamese working cultures clash. Koreans used to their own business operations find themselves frustrated by the Vietnamese bureaucracy.
However, for the moment, as the two countries’ economic and commercial partnership goes from strength to strength, tourism should continue to grow. Economic and commercial ties have given the tourism industry a platform to capitalise on the country’s links with South Korea. It is much needed as Vietnam tries to gain ground on its ASEAN counterparts in the battle to attract tourists.