Korea and Vietnam: "Trade to Reach $150 Billion by 2030"

President Lee and General Secretary To Lam Hold Summit

Strengthening Cooperation in Defense, Nuclear Power, and High-Speed Rail

President Lee Jae-myung and General Secretary To Lam of the Communist Party of Vietnam held a summit on the 11th and agreed to expand cooperation in large-scale infrastructure development, including nuclear power plants, high-speed railways, and new city projects. They also decided to strengthen defense industry collaboration, including the resumption of the bilateral Defense and Military Joint Committee meeting at the vice-ministerial level after 17 years.

During his state visit, President Lee held a summit with General Secretary To Lam at the Yongsan Presidential Office and adopted a "Joint Statement on Deepening the Comprehensive Strategic Partnership between Korea and Vietnam." In the statement, the two leaders announced, "On the occasion of the 10th anniversary of the Korea-Vietnam Free Trade Agreement (FTA) this year, both sides will continue to develop it." To this end, they agreed to make efforts to nearly double the trade volume between the two countries from the current $86.7 billion (as of 2024) to $150 billion by 2030. On the occasion of the summit, the two countries signed a total of 10 memorandums of understanding (MOUs) in various fields, including science and technology, renewable energy, and nuclear power.

It is the first time in 11 years since 2014 that the General Secretary of the Communist Party, who holds Vietnam's highest power ranking, has visited Korea. This is also the first overseas leader to visit Korea since the launch of the Lee Jae-myung administration. President Lee referred to Vietnam as a "family nation," stating, "It would be ideal if both governments made special efforts to ensure the safety of companies and citizens in each other's countries and supported free business activities."

Lee: "Hoping to Participate in Vietnam’s Nuclear Power and Rail Projects"... To Lam: "Will Consider Cooperation with Korean Companies"

Adoption of 'Joint Statement'... All-Dimensional Cooperation in Security and Economy

At the summit on the 11th, President Lee Jae-myung and General Secretary To Lam agreed to "comprehensively strengthen and deepen" the "Comprehensive Strategic Partnership" between the two countries. The sectors in which the two leaders agreed to enhance cooperation include nuclear power and defense industries, where Korean companies have strong competitiveness, raising expectations for new contracts.

◇ Expectations for Nuclear Power and High-Speed Rail Orders

In the joint statement adopted that day, the two leaders said, "We will actively encourage new investments and investment expansion by Korean companies in Vietnam," and "in particular, priority will be given to advanced and digital industries such as artificial intelligence (AI) and semiconductors, infrastructure development, renewable energy, establishing specialized industrial complexes based on global value chains, and more." Specific mention was made of Vietnam’s strategic infrastructure projects, including nuclear power, renewable energy, power grids, and high-speed railways. It was also noted in the joint statement that Korean companies hope to participate in these projects and that the Vietnamese side is aware of this.

The most anticipated project is Vietnam's new nuclear power plant construction. In February, the Vietnamese National Assembly approved the resumption of the "Ninh Thuan Nuclear Power Plant (NPP)" project, aiming to construct four new nuclear reactors at a cost of 30 trillion won. In 2009, Russia's Rosatom and Japan Atomic Power Company were selected as preferred bidders, but the project was suspended in 2016 after the Fukushima nuclear power plant accident. The Vietnamese government is now reportedly considering a third contractor.

Separately, a project to build two new nuclear power units in central Vietnam is also seen as an opportunity for Korean companies. "Team Korea," including Korea Electric Power Corporation, has already completed a feasibility study. This time, the two countries also signed an "MOU on Cooperation for Workforce Development in the Nuclear Power Sector." A Presidential Office official said, "This marks the creation of a favorable environment for Korea to win future nuclear power contracts in Vietnam."

Attention is also focused on the "North-South High-Speed Railway Project," which connects Hanoi to Ho Chi Minh City with a total length of 1,541 km. This large-scale national project is worth 100 trillion won. Compared to the $12 billion project agreed upon by former President Park Geun-hye and then-General Secretary Nguyen Phu Trong during his 2014 visit to Korea, it is much larger. Countries including Korea, China, Japan, and France are competing for the project. General Secretary To Lam said of the new nuclear power and high-speed rail construction projects, "I am well aware of the outstanding competitiveness of Korean companies and will actively consider their participation." The industry expects that Korean companies may secure new orders worth tens of trillions of won from Vietnam's nuclear power and high-speed rail construction projects.

President Lee also expressed anticipation for the new city construction project in Bac Ninh Province, an industrial city in northern Vietnam, saying, "It is expected to become the first export case for K-New Town. We will actively support cooperation among institutions and companies of both countries."

◇ Future Cooperation: Defense Industry

Expanding the stage for the advancement of "K-Defense" is also cited as an achievement of this Korea-Vietnam summit. The two leaders agreed to resume the bilateral Defense and Military Joint Committee, which had been suspended since 2008. This includes discussions for not only cooperation between defense companies but also for improving weapon systems, etc. Ministerial-level talks will also be activated to strengthen defense cooperation. The Vietnamese government has shown interest in introducing K-9 Self-Propelled Howitzers and other K-Defense products.

In addition, the two countries also agreed to strengthen cooperation in the energy sector, including oil and gas exploration and development, renewable energy such as solar and wind power, power grid expansion, and smart grid development. They also agreed to build a stable supply chain for key minerals such as rare earths, bauxite, graphite, and tin, which are abundant in Vietnam. Through the bilateral Ministerial Committee on Science and Technology, both sides will jointly research AI, semiconductors, and bio fields, and foster talent and exchanges.

Kim Hyung-kyu / Han Jae-young / Bae Sung-soo, correspondents khk@hankyung.com