Scrupulous approaches neededThe government of Jeju Island has turned scrupulous and picky in approving business offers from China. The southern island has recently become a favorite tourism and property investment destination of the Chinese. Won Hee-ryong, a former Saenuri Party lawmaker who was elected Jeju governor in June, announced that the provincial government will re-examine its business deals with Chinese investors to build a history park and the Jeju Dream Tower on the island. After that, China Teddy withdrew its plan to build condominiums in an investment promotion district worth 135.3 billion won ($130 million). Once the resort development was designated as a business for promoting investment, the company could have saved 16.6 billion won in taxes. The company was criticized for trying to squeeze in a small gallery on the resort site for tax benefits.
The southern island has seen an influx of Chinese capital in recent years. Chinese nationals bought 2.77 million square-meters (684 acres) of land on the island during the first six months of this year alone. Chinese are buying up properties not only in the scenic coastal and hilly regions, but also in the downtown area. Their real estate shopping spree made land prices in Jeju the highest in the country. Hotels, stores and duty free shops there are packed with Chinese tourists.
Concerns over reckless development have also been raised. Chinese property developer Greenland Group has been given approval to build the 56-story Dream Tower on a large plot of land. The facility, worth 1 trillion won, will include luxury apartments, a hotel and casino. The project has faced opposition and criticism that it could ruin the skyline and ambience of the island. Landing Holding Group’s multi-billion dollar resort plan also hit a snag after the Jeju government demanded revisions.
The capital inflow may not help Jeju’s economy much. As Chinese tourists may prefer resorts and casinos run by Chinese, Korea’s tourism sector could actually be hurt.
The government recently cancelled a license for a Chinese investor to create the first for-profit foreign hospital in Jeju. Authorities had not fully checked the eligibility of the investor. Korea should capitalize on its location to draw Chinese tourists, who are the biggest travelers and spenders in the world. But investment plans must be scrutinized so that they do not go against regional and national interests.
JoongAng Ilbo, Sept. 23, Page 38