116th Economic Free Zone Committee Meeting... Gwangyangman Yulchon Port Site Designation Suspension Extended
[Asia Economy Reporter Moon Chaeseok] The Gwangju, Ulsan, and Hwanghae (Siheung, Gyeonggi-do) Free Economic Zones (FEZs) will be newly designated. Gwangju will focus on artificial intelligence (AI), Ulsan on hydrogen, and Siheung on unmanned mobility (such as drones). These zones are expected to generate an economic effect of approximately 40 trillion KRW and create about 129,000 jobs. The Yulchon 3 Industrial Complex in the Gwangyang Bay Free Economic Zone will be deregulated.
On the 3rd, the government held the 116th Free Economic Zone Committee meeting to review and approve these two matters. The committee included attendees such as Lee Yong-seop, Mayor of Gwangju Metropolitan City; Song Cheol-ho, Mayor of Ulsan Metropolitan City; Lim Byung-taek, Mayor of Siheung; and Yang Jin-cheol, Director of the Hwanghae Free Economic Zone Authority.
The Gwangju FEZ will be developed as an AI-centered city. Following the 'National AI Strategy' jointly prepared by related ministries in December last year, the government is constructing the 'Gwangju AI Cluster' with a completion target of 2024.
By designating the Gwangju AI Convergence District and others as FEZs, the government aims to create an innovative ecosystem that fuses core industries such as energy, biomedical, and future vehicles with AI.
In particular, the AI sector will strengthen technological cooperation with Silicon Valley and attract research institutes in Palo Alto and other locations. The government expects the Gwangju FEZ to generate production worth 10.3641 trillion KRW, create 57,496 jobs, and produce added value of 3.244 trillion KRW.
The Ulsan FEZ will be developed as a hub for the hydrogen new industry, covering production, storage, transportation, and utilization.
By designating the Hydrogen Industry Hub District and others, the government plans to advance core industries such as automobiles, shipbuilding, and petrochemicals, linking them with the hydrogen industry to foster innovative industries.
Cooperation will be strengthened with Ulsan National Institute of Science and Technology (UNIST), the Hydrogen Fuel Cell Demonstration Center, and the Korea Institute of Energy Research to attract corporate research institutes and hydrogen-related companies.
The government anticipates that the Ulsan FEZ will generate production worth 12.4385 trillion KRW, create 76,712 jobs, and produce added value of 4.9036 trillion KRW.
The Siheung Baegot District will be developed as a hub city for unmanned mobility.
Global innovative companies related to land, sea, and air unmanned mobility industries (such as autonomous vehicles, unmanned ships, and drones) will be attracted.
The government expects the Siheung FEZ to generate production of 5.0286 trillion KRW, create 15,897 jobs, and produce added value of 1.9662 trillion KRW.
The Yulchon 3 Industrial Complex in the Gwangyang Bay FEZ has been deregulated. The FEZ Committee announced that it reviewed and approved the deregulation proposal submitted by the Gwangyang Bay Free Economic Zone Authority.
The committee judged that the development prospects are uncertain considering the prolonged dredging and dumping plans for the Yulchon 3 Industrial Complex.
In April, at the 115th FEZ Committee meeting, the deregulation was decided with a two-year extension of the suspension period for the deregulation agenda of the Yulchon Port site, conditional on the voluntary deregulation of the Yulchon 3 Industrial Complex.
A view of the SPP Yulchon Energy factory located in the Yulchon Industrial Complex, Gwangyang Bay, Jeollanam-do. (Photo by Asia Economy DB)
Seong Yun-mo, Minister of Trade, Industry and Energy, emphasized that to achieve the original goals of the FEZs as economic special zones, four innovations are necessary: redefining roles, regulatory innovation, improving investment incentives, and linking industrial and regional policies.
The Ministry of Trade, Industry and Energy plans to redefine the role of FEZs from focusing on 'attracting foreign investment' to 'attracting domestic and foreign investment and building an innovation ecosystem.'
Going forward, safety-proven regulatory exemptions will be fully allowed in FEZs under the regulatory special cases system.
Since the government has confirmed measures such as expanding cash support limits for overseas advanced companies and rent reductions for resident companies within FEZs through the economic policy direction announcement in the second half of the year, investment incentives will be expanded to enhance attractiveness.
Connections between national industries, regional policies, and key industries of FEZs will be strengthened, such as 'Gwangju AI,' 'Ulsan Hydrogen,' and 'Siheung Drone.'
Minister Seong stated, "To innovate FEZs, we will establish the 'FEZ 2030 Vision and Strategy' and prepare amendments to the 'Free Economic Zones Act' in the second half of the year. I ask local governments and related ministries to do their best so that the Gwangju, Ulsan, and Hwanghae FEZs can grow into forward bases for new industries."
An official from the Ministry of Trade, Industry and Energy said, "Taking this designation as an opportunity, we plan to steadily proceed with establishing the FEZ 2030 Vision and Strategy, amending the FEZ Act, opening new FEZ authorities (Gwangju and Ulsan), and supporting timely implementation of private investment projects."
Status of additionally designated Free Economic Zones. (Data from Ministry of Trade, Industry and Energy)
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