MOTIE Designates Core Strategies that Will Drive Innovative Growth of Economic Free Zones

Ahn Sung-il, director general of the Planning Office of Free Economic Zones. (Photo: MOTIE)

The Ministry of Trade, Industry and Energy (MOTIE) convened the 126th Meeting of the Economic Free Zone Committee in which four proposals, including the designation of each FEZ’s core strategic industries, were approved on Nov. 5.

The designation of each FEZ core strategic industries is designed to pick industries which will contribute to reinvigorating each FEZ, reflecting on each of their characteristics and conditions, thus building new industry centers that will drive innovative growth.

The designation of each FEZ core strategic industry follows the announcement of FEZ 2.0 2030 Vision and Strategies, made last October, and the revision of the Act on FEZs, which went into force on June 15, 2021.

Each FEZ development plan has been established every five years. MOTIE and nine FEZ authorities began to hold consultations on the designation of each FEZ core strategic industries last September.

The Economic Free Zone Committee, headed by MOTIE Minister Moon Seung-wook, held its latest meeting and finalized each core strategic industry.

Between last September and March 2021, MOTIE conducted prior consulting for designing each core strategic industries by analyzing each region’s industries to be nurtured, such as regional specialized industries, and their core attraction via the Korea Institute for Industrial Economics & Trade (KIET), and considering industrial connectivity.

Each FEZ consulted with its local government, based on the outcomes of KIET’s prior consulting, and worked out its proposal of designating core strategic industries following its in-house committee screening and approval from mayor and governor.

MOTIE had regional industrial experts’ group review FEZs’ proposals on two occasions - Oct. 7 and Oct. 18. The ministry worked out its plan to designate each core strategic industries by reflecting on each ministry’s views.

Core strategic industries, finalized in the latest meeting of the Economic Free Zone Committee, are three to four industries per each FEZ, which were put according to the Korean standardization industry classification code.

Core strategic industries have been designated with a focus on new industries, taking into account characteristics for each FES and conditions, as well as ways that each FEZ can attracting companies.

A few core strategic industries chosen by each FEZ, such as bio/health and mobility, will be nurtured by each FEZ’s differentiation strategies, coupled with its anchor companies and existing ecosystem.

For instance, as it comes to the bio/health care sector, Incheon Free Economic Zone (IFEZ) has designated bio and health care as one of its core strategic industries, based on a global bio pharmaceutical drug production center, while Chungbuk Free Economic Zone (CBFEZ) will develop chemical and pharmaceutical products in conjunction with state-run research institutes.

Daegu-Gyeongbuk Free Economic Zone (DGFEZ) will develop advanced medical systems and equipment.

With the designation of each FEZ’s core strategic industries, companies who invest in core strategic industries within the FEZ area other than the Seoul metropolitan area, corresponding to the designated codes, will be given site placement benefits identical to those of foreign-invested companies.

Each FEZ will work out its development plan utilizing each regions. Their respective specialized resources will be considered, as well as technology and environment, with a focus on the designated core strategic industries, while seeking to support the nourishment of the core strategic industries and regulatory reform.

MOTIE will look into the implementation process and outcomes of core industrial industries and their development plans and work out ways of providing support coupled with the existing industries.

A revised plan of developing the Ungdong District Phase II Project of the Busan-Jinhae Free Economic Zone.

BJFEZ: Reinvigoration Ungdong District Phase II Logistics Infrastructure

The Free Economic Zone Committee approved stage-by-stage development designed to boost investment according to port a backwater area development plan by the Ungdong District Phase II Project.

The changed development plans are expected to contribute to raising utilization of multi-purpose logistics sites of Busan New Port and spur investments.

The Gwangyang Bay Area Free Economic Zone Authority’s development plan. (Photos:GFEZ)

A map of developing the Yulchon 2nd Industrial Complex of the Gwangyang Bay Area Free Economic Zone.

GFEZ: Developing Yulchon 2nd Industrial Complex as One Designed to Meet Investment Demand

The Yulchon 2nd Industrial Complex of the Gwangyang Bay Area Free Economic Zone is an industrial estate being built in a state-financed project using earth dredged from the development of Gwangyang Port.

The committee gave the green light to extend the period of the project to meet investment demand for the development of the site.

The approval of the changes is expected to help the Yulchon 2nd Industrial Complex raise efficiency of land development by utilizing an area of dredged earth into an industrial complex and capitalize on the attraction of Korean and foreign investment companies by making the most of its geographical strength of proximity with the Yeosu National Industrial Complex.

Chungbuk Free Economic Zone (CBFEZ)’s revised plan of land utilization.

CBFEZ: Company and User-Oriented Repositioning of Cheongju Aeropolis 2nd District

The committee approved a land utilization plan to change the location of a parking lot and its adjacent industrial site for the purpose of integrating the industrial site and considering users’ convenience.

The steps are expected to boost attraction of companies and raise the utilization of convenience facilities, such as parking lots.

Ahn Sung-il, director general of the Planning Office of Free Economic Zones, said, “The designating of core strategic industries designed to lead innovative growth means the implement of the FEZ 2.0 Innovative Strategy Initiative in earnest.”

“We’ll closely collaborate with local governments and related ministries so that new growth engines will be created with a focus on core strategic industry and regional economies can be invigorated by implementing core tasks of the FEZ 2.0 Innovative Strategy Initiative, such as the establishment of each FEZ development plan this year,” he added.