According to Chinese customs data, the scale of bilateral trade between China and South Korea has exceeded US$ 200 billion for the fi rst time. Recently, a report released by the South Korean Customs Service, “Import and Export Analysis in 2010”, shows that South Korean exports to China in 2010 accounted for 25% of its total exports, which means that the export dependence on China has been growing. However, while China is Korea’s largest trading partner, its largest export destination, the largest destination of imports and the largest source of trade surplus, yet China’s investment in South Korean is very small. T erefore, attracting more Chinese investors is one of the main concerns of the South Korean government.
Nowadays, after organization by the China-Japan-Korea Enterprise Promotion Committee and the Jeju Free International City Development Center (JDC), the“China-Jeju Free International City Development Committee” and the “China-Jeju Free International Free City Development Fund” have been established to promote more investment by Chinese enterprises in Jeju Island. Both organizations also signed a strategic cooperation agreement. Secretary-general, Mr. Chen Jun, said that the agreement is the fruit of eff orts which have focused on addressing the demands of Chinese enterprises.
As the CEO of the JDC, Byon Jong-I stated that Jeju is marching towards the goal of becoming an international free city, while it is also working towards becoming the center of Northeast-Asian Travel & Business. Jeju is able to provide the convenience of free circulation of labor, commodities and capital. And, as an important city in Northeast Asia, Jeju has natural landmarks, a beautiful environment, convenient transportation and a developed legal system. T ese are all advantages of the Jeju Free International City.
Jeju is the largest island in South Korea with an area of more than 1,800 square kilometers and a population of only 560 thousand. T e subtropical oceanic climate and unique physical characteristics caused by volcanic eruption have created the beautiful natural scenery of the island. In the long term, Jeju Island has been regarded as “Paradise”, while it has also become a forgotten corner of Asia. Due to the lack of manufacturing and modern industry, its economic development is lower than the overall level of South Korea.
After the Asian financial crisis in 1997, the economy of South Korea suffered heavy losses and started to explore an economic model that was more open, more international, and more competitive. The concept for the Jeju Special Economic Zone began to form at that time, and has been gradually put into practice. In 2002, the South Korean National Assembly implemented the “Jeju Free International City Special Law”, which marked the first time that the legal status of the Jeju Special Administrative Region was confirmed, then it later released “Jeju Free International City Building Integrated Program”. In 2006, South Korea issued “T e Special Law of Establishment of Jeju Free International City”. In the same year, the Jeju Special Self-Governing Province was established.
The South Korean government provides over 1000 different unprecedented support policies. Additionally, except for rights related to defense, foreign affairs and the justice system, the Jeju Special Self-Governing has almost complete autonomy. The geographical location and natural conditions are considered the two pillars of Jeju Development Free International City development. According to an introduction from Mr. Byon Jong-I, Jeju Island is less than two hours fl ight from fi ve of Asia’s
most important cities such as Seoul, Beijing, Hong Kong and Shanghai.“T e two hours fl ight circle” covers three countries including China, South Korea and Japan, and a population of more than 50 million in 17 cities. Today, JDC is launching six core projects. By 2015, they will have completed these projects which include an English Education City, Hi-Tech Park Zone, Causal Housing District, Health Care Center, Myth Historical Park, and Sogwipo Travel Port.
In order to attract more investors, Mr. Byon Jong-I said that Jeju has put forward many preferential policies, for instance, it has exempted companies entirely from local tax if the enterprise establishes themselves on Jeju Island within the next 15 years, companies are also totally exempt from corporate income tax for five years, raw material import tax for three years, and the Island also provides 50 years’ worth of longterm low-cost rent. Jeju also improves the investment environment its administrative efficiency and relaxed policy limits for investors. Such as, the administrative agency can reduce the period of administration examination and approval from 22 months to 8 months. And if the investment volume is over US$500 thousand, the investor can get the permanent residence rights.
Beijing Jundi Investment Co., Ltd. has invested there, and General Manager Mr. Guo Jiuyin mentioned during the interview, that his company had established a joint venture with a local enterprise—VIVA VEACH CONDO. They have already built a 4 star hotel (currently in the decoration stage), and his company has signed with another local company to build an integrated project covering an area of 2,200 acres that combines villas, a commercial area and a golf course. He expressed, “I’m very optimistic about Jeju International Free City, with its great potential and development space. I hope that more domestic SMEs can participate in this project and explore the many business opportunities.”