Most South Korean firms in Vietnam plan to stay despite wage rises
Companies cited cost advantages over other countries as the main reason, and most expect their Vietnam operations to improve in coming years.
A survey released on Sunday found that 92 percent of South Korean companies operating in Vietnam plan to stay there despite rising labor costs, South Korea's national news agency Yonhap reported.
The Korea International Trade Association (KITA) conducted the survey, which found the companies had no intention of withdrawing from the Southeast Asian country.
Among those staying, 87.5 percent cited "cost advantage relative to other countries" as the main reason.
The findings come despite a sharp rise in wages in Vietnam in recent years, KITA said.
The monthly minimum wage for Vietnamese workers rose more than 4.5 times, from $45.4 in 2010 to $205.3 in 2024, the association said.
Monthly wages rose by an annual average of 11.4 percent over the 14-year period, the fastest pace among major Asian economies, KITA added.
Nearly 60 percent of companies expect their Vietnam operations to improve over the next three to five years, while 12.4 percent took a pessimistic view.
Seventy-two percent of respondents said Vietnam will continue to serve as a global business hub.
KITA advised companies to review their cost structures and improve operations in line with changing business conditions in Vietnam.
South Korea is one of the largest sources of foreign investment in Vietnam, and many Korean manufacturers run factories there.
Vietnam has long attracted manufacturers seeking lower costs than in China, which has helped draw foreign firms to its industrial sector.