Looking for Investors? Do it like Gyeonggi Province!
(September 09, 2011)

Gyeonggi Province succeeds in tapping into Chinese capital
Hanam Union Square, Hallyu world Hotel Complex MOU, and more

– Officials from Gyeonggi Province, the Hainan Airlines Group, and the Gyeonggi Urban Innovation Corporation got together at Lotte Hotel Seoul on September 5^th at the signing ceremony for the ‘MOU to Build a Major Hotel Complex in Hallyu World.’ (Photo) Governor Kim Moon-soo delivering his congratulatory speech. The governor suggested this investment when he visited China in May. (GNews Plus)

By inducing USD 1.3 billion in investments, Governor Kim Moon-soo demonstrated his business acumen while traveling from city to city overseas, attracting USD 1.3 billion as of August, i.e., twice as much as Gyeonggi Province was able to induce last year (USD 583 million).

What led foreign companies to open their wallets in these times of international economic difficulties? Observers say it was the Governor’s effort to meet any potential client in person as the CEO of Gyeonggi Province.

GNews Plus has prepared a two-episode feature on Governor Kim’s expedition to the US, Canada, China, the Philippines, and Japan earlier this year. <Editor>

China’s capital a ‘blue ocean’ for investment-hungry Gyeonggi Province

A celebratory event was held at the Westin Chosun Seoul Hotel and the Lotte Hotel to congratulate Gyeonggi Province on securing two major investment deals: Hanam Union Square, scheduled to be the largest shopping complex in the Seoul metropolitan region, and an MOU to build a hotel complex with 1,600 guest rooms in Hallyuworld, Goyang City. Both business investors are Chinese companies.

The foreign investment project Hanam Union Square Co., Ltd. will be carried out by King Power Company of Hong Kong, Taubman Centers of the US, and Shinsegae Co., Ltd. The major hotel complex, to be built within Goyang Hallyuworld, will be privately funded with capital investment from HNA Group, one of the ten largest private companies in China.

Such ample support from Chinese capital is unprecedented. Analyses indicate it was Governor Kim’s foresight that led to such success. China was once a place to run startup manufacturing businesses thanks to its cheap labor costs, but now it is referred to as one of the G2 along with the USA. Governor Kim did not hesitate to take advantage of that fact.

Governor Kim has long been interested in China, and was often heard praising China for its remarkable accomplishments, claiming Korea must consider the giant Chinese role model and boost national economic growth accordingly.

An excerpt from Governor Kim’s speech at the National Library at the ‘Improving Greater Subway Policies’ seminar for Gyeonggi Province’s ambitious Great Train eXpress (GTX) project effectively illustrates his perspective:

“I was in China a few days ago where I took the bullet train between Beijing and Shanghai. It runs at 310 kilometers an hour. That is much faster than any of our trains. It takes us a decade to pave a highway, and two decades to set up a railway. China can finish such projects in one third of that time.” He continued, “The railway industry is worth three times the nuclear industry worldwide. Our biggest challenge is future strategy projects. We will be outpaced by China. Before that happens, we must turn to the railway industry at the government level.”

China and Gyeonggi Province are geographically close with only the Yellow Sea separating the regions. This is one of the reasons why Governor Kim focuses on closer ties with the neighboring giant. Gyeonggi Province has already established ties with Liaoning (Shenyang), Hebei, Shandong, and Jiangsu among other Chinese provinces.

Governor Kim visited China three times in 2011 alone. During his first trip from May 25 to 28, he spent the first two nights in China followed by a day in the Philippines.

From July 8 to 10, he embarked on a trip to Shenyang, which borders North Korea and Dandong, in support of efforts by Gyeonggi-based businesses into expand into the Chinese market. Governor Kim took a close look at North Korea’s Hwaggeumpyeong and Wihwado Island, which are adjacent to the Dandong Industrial Development Zone, to evaluate their future development potential.

His last trip to China took place from August 24 to 26, when he visited Jinan and Nanjing, accompanied by seventeen representatives of provincial districts. Gyeonggi Province signed the Korea-China FTA test area installment agreement with Shandong Province and a cooperative MOU with Jiangsu Province. The district representatives discussed various economic, cultural, and sports-related exchange plans with district representatives in Shandong Province.

Hanam Union Square to be built with USD 250 million of direct foreign investment

– King Power of Hong Kong, Tubman Center of the US, and Shinsegae Co., Ltd. attend the project declaration ceremony in the Westin Chosun Seoul on September 5^th for Hanam Union Square. Governor Kim, National Assembly Member Moon Hak-jin, and approximately 100 citizens of Hanam came to celebrate the event. (GNews Plus)

During his three visits to China, Governor Kim made considerable progress in strengthening ties, procuring investment, and supporting local businesses’ attempts to advance in China. His most remarkable accomplishment, however, is the boost he has given to investment promotion.

The major hotel complex in Hanam Union Square and Hallyuworld finally secured the right investor during the Governor’s trip on September 5^th. Governor Kim signed an MOA with King Power Group Chairman Antares Cheng, Shinsegae Vice President Heo In-cheol, and Hanam City Mayor Lee Kyo-bum.

The agreement stipulates that the global distribution investment company King Power Group of Hong Kong and Shinsegae will invest USD 860 billion, including USD 250 billion in foreign investment, in the construction of the largest mall complex in the metropolitan area, to be called Hanam Union Square.

Shinsegae Co., Ltd. and King Power Group joined forces to establish Hanam Union Square Co., Ltd. for this project. The company will build a shopping complex consisting of 1,107,000 square meters of floor space on a 330,000 square meter lot near the Misari Motorboat Racing Park of Sinjang-dong, Hanam City. The complex is scheduled to open in 2015 with investment of approximately KRW 800 billion.

The complex will be comprised of department stores, fashion outlets, movie theatres, exhibition halls, performance halls, and other cultural facilities, providing fulltime employment for over 7,000 people.

An official of Hanam Union Square Co., Ltd. declared, “Hanam Union Square will be ten times larger than Yeju Premium Outlet (33,500 square meters) and will offer a myriad of activities to visitors, tourists and locals alike. It will attract over 10 million visitors annually, becoming a center of shopping and culture.”

Hanam Union Square finalized the land supply contract on August 31st and announced the start of construction on the 5^th of this month.

At the event, Governor Kim said, “It will a place be where people can shop for quality products at reasonable prices. The location, next to the scenic Han River, is also superb. I am confident that Hanam Union Square will become a popular destination for people from all around the world. Know that you have Gyeonggi Province’s full support in establishing this great venue.”

China goes from manmandi to quaiquai, stimulating Gyeonggi Province

– Governor Kim Moon-soo and HNA Group Board Director Tan Xiangdong celebrate the signing of the agreement to build a major hotel complex in Hallyuworld. (GNews Plus)

Governor Kim was able to reach out to HNA Group during his trip to China in May, suggesting to Chinese investors that they invest in Hallyuworld’s hotel complex. By June, the Chinese had paid a visit to Hallyuworld and entered into negotiations with Gyeonggi Province immediately.

The Chinese investor was revealed to be HNA Group, ranked 6^th among the top 500 privately-owned businesses in China in 2010, during the MOU agreement ceremony on September 5th.

HNA Group is the owner of China’s only private airline, Hainan Airlines, and also runs airport management, distribution, hotel, travel agency, real estate, and financial divisions.

The conglomerate decided to build a hotel in Hallyuworld because of the sharp increase in the number of Chinese tourists visiting Korea. Having added Incheon and Busan on their destination list, they needed to establish a hotel complex in the metropolitan area. Hallyuworld is not only close to the capital city, it also features diverse attractions nearby as well as reasonably priced lots.

Hallyuworld’s hotel complex, for which the land supply agreement is due to be signed by October of this year, will cost KRW 350 billion. The construction of a 308-room business hotel will start by the end of this year, with another 800-room hotel and a 5-star 500-room hotel to come in the next five years.

Hwang Seon-gu, project manager for Hallyuworld, said, “Once the Hotel Hainan has been built, we will be able to provide Chinese tourists with quality accommodations at great prices. This is just the ticket to stimulate the tourism industry. This is the first time that a Chinese company has invested such a large sum in real estate in the metropolitan area. That’s what makes this event even more special.”

Now that the deal has been signed, Hallyuworld¡¯s hotel promotion drive is good to go. The government has planned a total of 4,010 serviced rooms in Hallyuworld. For now, the 660-room Daemyeong Hotel is scheduled to open in 2013, while the 380-room Hotel Inter-Burgo will open by 2014, which leaves seventy-five percent of the area’s full capacity. With the 2,640-room Hotel Hainan on the way, the local government is in a more favorable position for negotiations.

A government official said, “We are looking for an investor to fill up the remaining 1,370 slots. We expect such a deal to be closed by early next year.”

Governor Kim was not shy in expressing his expectations for the MOU signing for the Hallyuworld hotel complex. “I am happy that HNA Group has secured tourist infrastructure in the northern area of Gyeonggi Province with this investment. This will stimulate local tourism and perhaps even improve North-South relations.” He emphasized that Gyeonggi Province welcomes Chinese capital.

It turns out this will not be the end of Governor Kim’s expeditions to China. It is a well-known fact that China’s development is essential to Korea¡¯s economic growth. The governor remembered hearing the word quaiquai (hurry) many times in official statements. The neighboring nation’s steep development curve is stimulating Gyeonggi Province.

Forget the China of the days of cheap labor. China is now making investments all over the world, and Korea is no exception to this. Governor Kim and Gyeonggi Province will be among the first to act upon this dramatic change in China’s fortunes.

– Governor Kim visited Dandong’s pier, which is currently under construction, during his visit to China from July 8 to 10.(GNews Plus)

– GNews Plus News | Nam Gyeong-u echo2008@kg21.net

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