HO CHI MINH CITY -- Vietnamese companies remain eager to do business in North Korea should international sanctions be lifted, positioning themselves to lead the way into one of Asia's last undeveloped markets.
While last week's U.S.-North Korea summit failed to produce a political breakthrough, some of the biggest corporations in the fast-growing Southeast Asian economy received guests from Pyongyang in parallel with the talks in Hanoi.
Vingroup, the country's leading private conglomerate, showed a North Korean delegation led by Workers' Party senior official Ri Su Yong around its factories and high-tech farms in Haiphong, the second-largest city in northern Vietnam, on Feb. 27, a company staff who organized the tour told the Nikkei Asian Review.
"Members of the delegation showed interest in our products, especially eco-vegetables," said the staff, who requested anonymity. The tour went on while U.S. President Donald Trump met with North Korean leader Kim Jong Un.
VinFast Production and Trading, a group manufacturing subsidiary, operates an electric scooter factory in Haiphong. VinEco, the group's agricultural unit, also runs greenhouses in Haiphong to grow bean sprouts, herbs, vegetables, fruits and mushrooms.
State-owned Viettel, the country's largest telecom company, also received delegates from Pyongyang.
North Korea's Ri, who serves as vice chairman of the Workers' Party Central Committee and head of international affairs, said during the visit that Pyongyang is interested in telecommunications equipment for smart communities, and hopes for further cooperation soon, according to a March 1 statement by Viettel.
CEO Le Dang Dung said earlier this year that Viettel had first sought approval from North Korea to build a mobile network in 2010, according to Reuters. But now the military-backed company is "waiting for sanctions to be lifted and the country to open its market to foreign investors."
These one-party socialist states have diverged in their economic development since the Vietnam War. Vietnam now has two stock markets and continues taking steps to open up to foreign investment, while North Korea remains shackled by international sanctions imposed in response to its nuclear weapons program.
"Vietnamese companies are interested in doing business in North Korea, and they are preparing to enter the country when Pyongyang opens its market," Le Dang Doanh, a former member of the United Nations Committee for Development Policy, told the Nikkei Asian Review.
As the former president of Vietnam's Central Institute for Economic Management, Doanh presented the country's economic model to North Korean teams that paid unofficial visits to Vietnam before the summit.
He said Vietnamese companies acknowledge they would have to compete against rivals from other countries including China, South Korea and Russia, who are waiting for reforms and a clear legal framework for foreign investors from the North Korean government.
"But that is unlikely to happen anytime soon unless all the sanctions against Pyongyang are lifted by the U.S.," Doanh said. As Vietnam is a member of the World Trade Organization and the United Nations, Hanoi must comply with resolutions on North Korea from these international bodies, he added.
Experts said Vietnamese companies also can seek opportunities in sectors including infrastructure, real estate and tourism, as well as investment into consumer goods factories, generating employment in North Korea.
Vietnam and North Korea share a long history through the friendship between the respective ruling parties. With the similar political regimes and theories, the peers were once defined as "fellow socialist powers" beside China.
Relations between North Korea and Vietnam have ebbed and flowed over the past 60 years, but Pyongyang and Hanoi still view each other as "traditional friends." Vietnamese Prime Minister Nguyen Xuan Phuc reaffirmed this when meeting with North Korea's Kim on March 1. Kim became the first North Korean leader since his grandfather Kim Il Sung to make an official visit to Vietnam.
While complying with international sanctions in the wake of Pyongyang's nuclear tests and missile launches, Hanoi has consistently supported a dialogue-based solution to the North Korean nuclear standoff.
Vietnam exported $579,000 worth of goods to North Korea in 2018, including confectionery products, wood products and medicines, according to government statistics.
Trade between Vietnam and North Korea largely depends on barter. Vietnam stopped importing North Korean products in 2011 in response to U.N. sanctions, but continues to export consumer goods to the market. Trade between the two countries peaked at $15 million in 2012.