Strengthening Ties: Korea and Vietnam’s Growing Defense and Shipbuilding Cooperation

In recent developments, the defense and shipbuilding sectors of Korea and Vietnam are witnessing significant advancements, especially following a pivotal summit held on August 11th at the presidential office in Yongsan, Seoul. Attended by President Lee Jae Myung of Korea and General Secretary To Lam of the Communist Party of Vietnam, this meeting solidified the two nations’ commitment to enhance bilateral relations and collaborative efforts in critical areas.

A New Era in Defense Cooperation

One of the most noteworthy outcomes of the summit was the agreement for Korea to initiate its first-ever arms export to Vietnam. Hanwha Aerospace finalized a government-to-government contract that includes the export of over 25 K9 self-propelled howitzers, valued at approximately 350 billion won (around $251 million). This development marks Vietnam as the 11th country in the world to invest in the K9 system—a testament to its advanced military capabilities.

The agreement’s timing is particularly crucial as both nations are looking to bolster defense strategies amid evolving geopolitical tensions in the region, notably influenced by China’s assertiveness in the South China Sea. In this context, Vietnam’s military modernization efforts are not just timely but also essential for maintaining territorial integrity.

Reviving Defense Committees

During the summit, President Lee and General Secretary To Lam also agreed to re-establish the joint defense industry and logistics committee, which has been dormant for 17 years since 2008. This vice-ministerial level committee will facilitate discussions regarding military equipment procurement and weapons system upgrades—setting the stage for increased arms exports from Korea to Vietnam.

The Defense Acquisition Program Administration (DAPA) has already identified various promising items for export to include an additional 108 K9 howitzers, medium-range surface-to-air missile systems, and critical armored vehicle technologies. This expansive list underscores the potential for growth in defense cooperation, promising a mutually beneficial arrangement for both countries.

Vietnam’s Shift to Modernization

Vietnam’s commitment to modernizing its military further reflects its strategic priorities. This modernization is driven by the need for high-speed patrol boats and submarines in light of ongoing territorial disputes in the South China Sea. Observers, such as military studies professor Kim Ki-won, emphasize that Vietnam’s political stability as a one-party state reduces the risk of abrupt cancellations of military orders—a factor that appeals greatly to Korean defense manufacturers.

Shipbuilding Cooperation

Alongside defense agreements, shipbuilding cooperation is ramping up significantly. On the same day, an important memorandum of understanding was signed between HD Korea Shipbuilding & Offshore Engineering and Vietnam Maritime Corporation (VIMC). The objective is to significantly increase annual production at HD Hyundai Vietnam Shipbuilding (HVS) from 15 to 23 ships by 2030.

HVS, located in Khánh Hòa Province, has been a pivotal site since its inception in 1996. The shipyard specializes in constructing bulk carriers and container ships, pivotal for Vietnam’s burgeoning maritime economy. This collaborative effort aligns closely with Vietnam’s targets to redefine its maritime landscape and improve operational efficiencies in its ports.

Infrastructure and Logistics Development

Vietnam is not just focused on military endeavours; it is also expanding its port and airport infrastructure to enhance its status as a logistics hub in Southeast Asia. General Secretary To Lam’s recent meetings with Korean companies focused on leveraging expertise in developing a comprehensive logistics ecosystem, highlighting the growing interdependence between the two nations in their respective maritime strategies.

Vietnam’s ambition to become a logistics leader, especially with the upcoming infrastructure developments centered around Ho Chi Minh City, provides an attractive opportunity for Korean firms. As the nation aims to transition its shipbuilding capabilities from basic vessels to more technologically advanced ships, expertise from Korea will be indispensable.

The Long-Term Vision

Korea and Vietnam’s enhanced collaboration offers reciprocal benefits. For Korea, the opportunity to penetrate Vietnam’s markets could lead to reduced production costs and access to Southeast Asia, a burgeoning market for defense and logistics products. Meanwhile, Vietnam stands to gain advanced technology and strategic partnerships that can propel its military and maritime growth agendas.

In summary, the convergence of defense and shipbuilding industries between Korea and Vietnam heralds an era of enhanced cooperation and mutual benefits. Each nation’s strategic goals align, with Vietnam seeking to bolster its military capabilities and supply chain efficiencies, while Korea looks to deepen its economic integration within Southeast Asia. The evolving relationship signifies not just an expansion of trade but a solidification of partnerships in a complex geopolitical landscape.