[FOCUS] Summit reveals S. Korean strategy to reduce reliance on superpowers

By Lim Chang-won Posted : March 23, 2018, 17:27 Updated : March 23, 2018, 17:27

[Yonhap News Photo]



SEOUL -- The summit between President Moon Jae-in and his Vietnamese counterpart, Tran Dai Quang, revealed a strategy to use the Southeast Asian country as a springboard for South Korea to reduce its heavy trade and economic reliance on China and the United States.

The summit on Friday in Hanoi comes amid growing concerns over a possible trade war between Washington and Beijing that could hurt exports of South Korean goods.

In response to Chinese President Xi Jining's trademark "One Road and One Belt" initiative that focuses on connectivity and cooperation between Eurasian countries, Moon has unveiled his own initiative called "New South Policy" to enhance ties with Southeast Asian countries and India.

For his initiative, Moon has picked Vietnam as the most important strategic partner among ten members of the Association of Southeast Asian Nations (ASEAN).

In a joint statement issued at the end of their summit, Moon and Quang agreed to work together to increase the volume of annual bilateral trade to more than 100 billion US dollars by 2020. Moon was confident saying Vietnam will become South Korea's third largest trading partner next year and overtake the United States as the second largest in 2020.

"For South Korea, Vietnam is a special country and a key partner in our new South Policy," Moon said, adding the two countries witnessed a "miraculous" increase in trade and other relations since they normalized relations in 1992.

Well before Moon's trip to Vietnam, Southeast Asian nations have replaced China as an emerging place favored by South Korean investors. South Korea's investment in China has been stagnant as more Korean firms relocate plants to Vietnam and other Asian countries.

Vietnam has become an alternative production base for South Korean companies as it provides cheap and labor, good infrastructure and an investor-friendly environment. South Korean firms think Vietnam is luring foreign investors with an aggressive government policy of providing incentives to foreign investors while China is doing the opposite.

In 2017 when Seoul was battered by Beijing's trade retaliation over a U.S. missile shield, Vietnam emerged as South Korea's fourth-largest trading partner with bilateral trade reaching $63.9 billion. Experts credit Vietnam's rise to its growing prominence as a strategic outpost for big firms like as Samsung Electronics which produces about half of its smartphones in Vietnam.

Foreign ministry data in Seoul showed some 150,000 South Korea are staying in Vietnam, many of them doing business, while nearly 170,000 Vietnamese people are living in South Korea, including tens of thousands of women through marriage.

Aware of Vietnamese complaints that trade is heavily in favor of South Korea, Moon stressed that the relationship with Vietnam should be mutually beneficial for co-prosperity.

According to the Korea International Trade Association (KITA), South Korea posted a trade surplus of $31.6 billion against Vietnam in 2017. Vietnam wants South Korea to address the trade imbalance and invest or transfer technology more actively in the fields of infrastructure, renewable energy, agriculture and IT.

"To break from the current system of exports driven by intermediate and capital goods, South Korea needs to increase the portion of consumer goods," said Chung Kwi-il, a KITA researcher.
 

기사 이미지 확대 보기
닫기