Competitors or Collaborators? Trade Relationship between South Korea and China in Vietnam’s ICT Industry

This study delves into the trade relationship between South Korea and China within Vietnam’s ICT market. Empirically examining the changes in import volume from both countries into Vietnam, it uncovers a complex interplay of dependency and competition. The research reveals that an increase in South Korea’s ICT exports to China indirectly boosts China’s export volume to Vietnam, suggesting a mutually dependent trade relationship. Conversely, the rise in China’s ICT exports to Vietnam is found to adversely affect South Korea’s export performance in the Vietnamese market, highlighting a competitive dynamic between the two nations. Under the SITC-76 and SITC-77 categories, South Korea demonstrates a relative comparative advantage. The study also observes a decline in both countries’ export volumes, indicating a shift in the Vietnamese market from a growth phase to maturity as Vietnam’s economy evolves. This transition, alongside the expected decrease in South Korea’s ICT export share, underscores the urgency for South Korean firms to strategically adapt, taking into account the evolving Vietnamese demands and the intricate competitive landscape with China.