As one of Asia’s most stable and most dynamic economies, South Korea maintains its status as a global leader because of its commitment to free trade and mastery of technological innovation. Following his inauguration last May, President Moon Jae-in reaffirmed his government’s plan to strengthen its international relations, especially in trade and investment.
Amid the political and economic shifts on the domestic, regional and international fronts, this Special Report on South Korea, tentatively scheduled for publication in the September/October 2018 issue of Foreign Affairs, aims to outline South Korea’s strategic importance to the Asia and the world, while highlighting its growth sectors and the opportunities for investment and business partnerships.
Another testament to South Korea’s economic might, the Saemangeum Development Project holds the Guinness World Record for having the longest man-made seawall, at 33.9 km. The reclaimed area, intended to become another economic growth center, connects the city of Gunsan and Buan County in the west coast of the country.
Despite being only two-thirds the size of Seoul, the project, with its sea embakment completed in 2010, provides abundant investment opportunities given its proximity to China.
“Compared to other free trade zones, both domestically and internationally, Saemangeum is the only place where you can see a beautiful environment converge with various industries in a city that will serve as a model community in the future,” said Lee Cheol-woo, Administrator and Vice Minister of the Saemangeum Development and Investment Agency (SDIA).
Originally planned as an agricultural site, the area has transformed into a multifunctional location with different areas dedicated to agricultural biotechnology, industry and research, international cooperation, leisure and tourism, eco-environmental technology, and residential living.
A number of ongoing infrastructure projects will allow these industries to integrate with the rest of the country and provide foreign investors with greater ease of doing business. Having received strong support from the government, the North Access and South-North Access Roads and the Saemangeum-Jeonju Highway are due for completion by 2023.
Although five multinational companies have already established production sites in the area, there is plenty of room for more investors in Saemangeum. Among its many incentives, SDIA plans to offer long-term leases that will help companies optimize their costs. Additionally, locators can take advantage of the low tariffs from the Korean-China Free Trade Agreement and highly skilled, world-class Korean workers.
Apart from developing economic zones, such as Saemangeum, Korea continues to head towards the so-called 4th Industrial Revolution and focuses on building the industries of the future. That is the ambitious goal set for itself by the Federation of Korean Industries (FKI), one of Korea’s four most prestigious economic organizations. With 432 members, FKI represents is aware that, while it represents the interests of Korean companies from various sectors, it must focus on ICT and artificial intelligence if it will achieve its objective.
FKI Vice-Chairman and CEO Kwon Tae-shin singled out specific technologies that he hopes will grow in the coming years. These include smart appliances, automated driving technology, drones, mobile payment, smart factories, IT-enabled medical diagnostics and treatment.
“Venture capitalists, startups, and small companies are very good in developing new things,” said Kwon, who added that big corporations are usually hampered by a huge bureaucracy.
On trade, Kwon highlighted South Korea’s economic strength, together with that of its neighbors, China and Japan.
“We are a believer of free trade. We have signed free trade agreements with many countries and thus, have a comparative advantage in doing business with EU, the US and ASEAN,” he said.