An artist’s rendition of the East Coast Free Economic Zone, which is planned for Donghae city in northeastern South Korea’s Gangwon province. FEZ AUTHORITY
Foreign direct investment (FDI) in South Korea’s nine free economic zones (FEZ) surpassed a cumulative $20 billion mark since the nation started operating the FEZs 18 years ago in 2003.
According to the Ministry of Trade, Industry and Energy, the nine FEZs attracted FDI worth $1.31 billion in 2021, up 42 per cent from a year earlier.
This was a bounce-back after recording declines for two consecutive years – from $1.69 billion in 2018 to $1.02 billion in 2019 and $910 million in 2020.
Collectively since 2003, FDI attracted by the nine FEZs reached $20.5 billion as of 2021, after topping the $15 billion mark in 2017.
Among the nine FEZs – located in regions including Incheon, Gwangju, Gwangyang, Busan, Ulsan and Daegu – two FEZs in Incheon and the Busan-Jinhae region still take up a dominant portion of attracting inbound investment.
Nevertheless, investment concentration in Incheon and Busan-Jinhae has been eased to 76 per cent from its former high of 90 per cent. This is due to the other FEZs posting noteworthy growth recently, the ministry said.
The ministry added that the FEZs have pushed for attraction of investment in sectors like pharmaceuticals, new materials, logistics and development of resorts.
According to the ministry, inbound investors looking for a biopharmaceutical base have recently expanded their FDI in Incheon’s Songdo-dong, where the Incheon FEZ is located. A biotech cluster is located in Songdo-dong, where dozens of major local and global bio and health care firms have made investments.
A ministry official said that the government has been seeking to attract more investment in next-generation technology and knowledge-intensive service industries.
“The government plans to make tailored measures for each zone in a bid to offer more favourable business environment for inbound investors,” it said.
In 2021, investment from the EU made up the largest portion with $530 million, or 40.8 per cent, of the total yearly FDI ($1.31 billion). The Incheon FEZ accounted for the largest portion of the EU-based investment.
The next highest ranked was China, whose investments came to $410 million and 31.6 per cent share of the total FDI, followed by North America with $140 million and a 10.6 per cent share.
Of the nine FEZs, the Busan-Jinhae FEZ took the largest portion of FDI from China, while the main destination of investment from North America was the Incheon FEZ.
The Philippines placed fourth with $130 million and a 10 per cent share. Most of the investment from the country was focused on development of the service industry for Korea’s east coast. Next were investors from Japan, who took up a six per cent share.
THE KOREA HERALD/ASIA NEWS NETWORK
