Vietnam and Korea have maintained more than 25 years of diplomatic relations and remarkable progress has been made in improving and upgrading their ties. Due to favorable economic conditions such as stable inflation, robust economic growth, increase in FDI inflow, multi- and bilateral FTAs, the establishment of the ASEAN Economic Community (AEC) and so on, many Korean companies have recently chosen Vietnam as a strategic production base. As a result, their production facilities dispersed throughout ASEAN member states are now becoming concentrated in Vietnam. Now, Korea has become the biggest investor in Vietnam and bilateral trade growth is recording more than 25% per year.
In fact, Koreas relation with Vietnam bridges its relationship to ASEAN. With cheap labor and a large consumption market, the ASEAN area should not be ignored by Korean investors. Given more and more interdependence among countries and the implementation of the AEC, Korean investment to this region is still likely to be lower than that from Japan or China. To make matters worse, Korea has no big picture for its investment strategy for ASEAN currently. The Korean government needs to prepare for an investment roadmap to minimize external risks by considering the whole East Asia region as a single production base for Korea.