The Chinese government is working hard to create a manufacturing center for Chinese companies and a Chinese commercial district in Muan, South Jeolla Province, a farming region in the southwestern part of the country.
China's Chongqing city and Shandong Province are spearheading the investment drive, while nearly 300 Chinese businesses, including automaker Sinotruck and the country's fifth-largest home appliance maker Hisense Group, have expressed intentions to set up facilities in Muan.
The 17.73 million sq. m Korea-China international industrial complex will include a manufacturing zone, a Chinese commercial district and an international university. The project is planned for completion by 2025 at a cost of W1.76 trillion (US$1=W1,273).
◆ Chinese Gov't in Rush to Support
An official at the Chinese Embassy in Seoul said the Chinese government is firmly behind the project, selecting only Korea out of the OECD member countries to become an "Overseas Trade and Economic Cooperation Zone." For China the project would mean manufacturing center within Korea, securing a stronghold from which it could quickly acquire more advanced technology.
China is offering a variety of support measures, including the central government providing a grant of between W40 billion to W60 billion to the Chinese company handling the project, and Chongqing city promising W200 billion in payment guarantees to businesses setting up operations there. China plans to invest at least W3.7 trillion into Muan, including W780 billion to develop the complex.
◆ Muan Chosen for Geographical Benefits
China chose Muan for its location. Much of the region is farmland so land is plentiful and cheap. Muan also has the only international airport in southwestern Korea (Muan International Airport), with flights of just an hour to Shanghai, an hour and a half to Shandong Province, and three hours to Chongqing.
Many Chinese people from Shandong Province have already settled in Muan, opening Chinese restaurants and other businesses. If the complex opens in 2025 according to plan, the rural region, where farmers now account for 70 percent of the population, would transform into a Chinese business stronghold combining elements of manufacturing, finance, tourism and education. It could also mean the creation of some 37,000 jobs and W2.4 trillion in production.
◆ Difficulties Seen Ahead
The plan received the green light for development by the Ministry of Land, Transport and Maritime Affairs (MLTMA) in January. But there have been problems in raising start-up funds of W340 billion, prompting groundbreaking, originally scheduled for the end of this year, to be delayed considerably.
"We're having problems raising funds to finance the development," an official at the Muan government said. "It's because the project's future is seen as shaky, perhaps due to the fact that many people here are unaccustomed to a plan being pursued by a regional government, and because this is the first investment into Korea by the Chinese government."
Muan and the Chinese government both want the Korean central government to support the project. However, an MLTMA official said, "The project is being led by a regional government and a private business and the [central] government is not in a position to take part."