January 9, 2008

By Park Si-soo
Staff Reporter, The Korea Times (www.koreatimes.co.kr)

On Dec. 7 when thousands of fishermen, soldiers and volunteers in South Chungcheong Province were struggling to cleanup the country’s worst oil spill ever, some good news arrived for the region ？¿？¿¡§？¿ five areas, including three in the province, had been designated as “Yellow Sea Free Economic Zones” (YSFEZ).

The five were Asan, Seosan and Dangjin in South Chungcheong Province, and Pyeongtaek and Hwaseong in Gyeonggi Province.

The government estimates that more than 68 square kilometers in the five areas will be transformed by 2025 into global centers for high-end technology not only in the semiconductor, steel, display, computer and automobile sectors, but also in the fields of information and bio technologies and even tourism. Its said it will spend approximately 7 trillion won or $7.5 billion over the next 17 years to create the spacious free economic zone.

It will also enhance shipping capacities and facilities of commercial ports in the region ？¿？¿¡§？¿ Dangjin, Daesan, Boryeong and Pyeongtaek ？¿？¿¡§？¿ to create a distribution hub for international trade with China and countries in Southeast Asia.

In the free economic zone, foreign-invested companies will benefit from a variety of business-friendly policies, including tax exemptions and subsidies from the host provinces ？¿？¿¡§？¿ high-tech companies will receive a 100-percent corporate income tax break for five years. Foreign hospitals and schools will also be allowed to open in the zone without restrictions.

“Major cities such as Seoul, Incheon and Daejeon are located within 100 kilometers from the free economic zone. It takes less than three hours to reach any place in the country from the YSFEZ using highways and bullet trains. Therefore, I am sure that the region will evolve into a key logistics place for domestic and international trade in the years to come,” said Lee Wan-koo, the governor of South Chungcheong Province. “We also plan to expand the shipping capacities of Pyeongtaek and Dangjin ports on a large scale by 2011 for growing trade with China.”

South Chungcheong Province plans to foster clusters for the display panel, automobile, petrochemicals and semiconductor industries in the region.

The government decided to divide the special zone amounting into five different areas that will push ahead with development independently.

The first area including Songak and Seongmun will be developed into a city covering commercial, administration and research activities. The second, to be built around Inju in Asan, South Chungcheong Province, will be developed as tourist and recreation attractions.

The third area around Jigok in Gyeonggi Province will be a center for the automobile industry and associated research and development activities. Various facilities for international distribution alongside residences will be constructed in the fourth area, Poseung in Pyeongtaek, Gyeonggi Province. Lastly, a bio industry complex will be set up in Hyangnam, Hwaseong, Gyeonggi Province.

“By 2025, a variety of research and manufacturing facilities with regard to displays, semiconductors, and even leisure industries will be constructed together with other commercial and residential areas on 13 square kilometers,” said Roh Jong-hyun, the Asan city spokesman. “The region will teem up with Samsung Electronics’ semiconductor plant in Tangjeong to research and develop high-end technologies. These activities will serve as a cornerstone for this province to leap toward becoming a new center of up-to-date technology.”

Noting that a new industrial city focusing on car technology will be built in Seosan, Ryu Sang-gon, the mayor of the city, said “the car industry will greatly contribute to creating new jobs here and making a better living environment.”

A number of companies in the automobile, steel, display panels, petrochemicals, information and bio-tech industries have already operated their plants and research and development (R&D) facilities in what is now the YSFEZ over the past few decades.

Several local steel makers including Hyundai Steel and Hyundai Hysco are located in Dangjin, South Chungcheong Province. The assembly lines for Hyundai and Kia Motors are located in Asan and Hwaseong in Gyeonggi Province, respectively. Samsung Electronics’ liquid crystal display (LCD) plant is in Cheonan, North Chungcheong Province, also quite near the YSFEZ.

Thanks to a number of plants in the region and in its vicinity, YSFEZ has relatively stable infrastructure including roads, buildings and other public infrastructure, compared to other newly designated free economic zones.

“South Chungcheong Province has tried to improve itself for a long time to be an attractive investment spot. That such a large number of leading companies in the region is proof of our constant efforts,” Governor Lee said. “Its proximity to China and other countries in Asia provides the utmost advantage for export-oriented companies in the zone. In addition, plants in the area have abundant industrial water from Boryeong Dam and Sapgyo Lake, and the Geum River passes through the YSFEZ.”

The government has also prepared various incentives for foreign investors such as cash grants, employment and facility subsidies, and subsidies for the living and welfare.

Most people speak highly of the YSFEZ plan and its previous performances, although some residents opposed the zone. It is estimated that more than seven trillion won will be used to complete the project. If the project goes as planned, only 0.7 percent of the total expense required or 45.7 billion won will be given by the central government. And 5.9 percent or 413.9 billion won will be provided by the two local governments ？¿？¿¡§？¿ Gyeonggi and South Chungcheong provinces.

The remaining 93.4 percent or 6.54 trillion won for the project will be from the private sector through domestic and foreign investors.

“We firmly believe that YSFEZ will be one of the most preferable locations for foreign investors to invest in,” a Gyeonggi government official said. “There will be no problem in collecting enough funds for the project, should we utilize all the resources we have.”

pss@koreatimes.co.kr