[INTERVIEW] IFEZ envisages Incheon soaring as a truly global city

In-depth

Published: 13 Nov. 2022, 16:05

[INTERVIEW] IFEZ envisages Incheon soaring as a truly global city

Kim Jin-yong, Incheon Free Economic Zone commissioner, in an interview with the Korea JoongAng Daily at the IFEZ headquarters in Songdo, Incheon on Nov.7. [PARK SANG-MOON]

Kim Jin-yong, the Incheon Free Economic Zone (IFEZ) commissioner, wants Incheon to become a truly global city like Hong Kong and Singapore.

He is the first commissioner of the IFEZ to serve a second term, which started in September.

Kim served as the IFEZ chief between 2017 and 2019. Incheon is the country’s oldest free economic zone.

The commissioner stressed his determination to make Incheon’s free economic zone more business friendly to attract more foreign companies. He wants to lift regulations with the help of the government.

He said Incheon will become an example for other cities that are trying to develop.

“Instead of trying to artificially bring about balanced development nationwide, it would be better to adopt a system in which [a city] is picked and then letting its success spread [naturally],” Kim said.

The commissioner also plans to turn the Incheon free economic zone into a major hub for Korea’s entertainment industry through its IFUS HILL on Mount Eulwang, located near the Incheon International Airport at the end of Yeongjong Island.

He said it will contribute to the city’s tourism.

The Land Ministry and Incheon airport, which own the land for IFUS HILL, however, are opposing. Incheon airport argues that it needs to expand warehouses to meet cargo demand that has surged since Covid-19.

Kim is a career civil servant for Incheon and was heavily involved in the creation of the IFEZ, which was the country’s first economic free zone when started in 2003.

Kim sat down with Cheong Chul-gun, CEO of the Korea JoongAng Daily, on Nov.7, to talk about the future of Incheon and its economic zone.

The following are edited excerpts from the interview.

Q. You’re the first IFEZ commissioner to serve two terms. In your first term, you helped Incheon become a hub for the medical and bio industries. What are your plans for your second term?

A. When the country first conceptualized the idea of a free economic zone, we were stuck between the advanced technology of Japan and the low labor costs of China.

We needed to find ways to attract foreign investment but also adopt advanced technologies. The Kim Dae-jung administration passed free economic zone legislation in 2002 and the IFEZ was opened in October 2003.

In the first 10 years of my career, I was working for the Incheon city government and was involved directly or indirectly in the establishment of the IFEZ. In the next 20 years I have worked at the IFEZ.

And now I have reached a point where I am serving my second term as commissioner.

As much as I feel honored for the opportunity to serve a second term, I also feel a heavy weight of responsibility.

I tried to work on key issues including normalizing the Songdo International Business District development project, which had been suspended due to legal battles, while focusing on major issues including designing the vision and strategy for the city based on fourth industrial revolution technologies.

We approved the construction of Starfield mall, the bridge connecting Yeongjongdo and Cheongna and the Songdo Severance Hospital.

In particular, I was able to lay the foundations for a global bio-industry hub through the Songdo bio cluster by boldly reducing the residential area to allow the establishment of R&D facilities.

In my second term, I plan to make IFEZ a truly global city including working on the Jemulpo Renaissance and the New Hong Kong city projects along with the development of the IFUS HILL, Cheongna city tower, the second phase of the Art Center Incheon, Songdo Severance Hospital, as well as the visual and cultural complex in Cheongna.

View of Songdo from IFEZ headquarters. [INCHEON FREE ECONOMIC ZONE]

Can you give more details as to your plans for transforming Incheon into a global city?

To be a true international business-centered city, high-tech industry is a must.

Related companies especially those with fourth industrial revolution technologies have to be stationed in the city. Also we need to have more start-ups with fourth industrial revolution technologies.

We also need global research centers and academic institutions.

Today not only were we able to have Samsung Bioepis, Celltrion, Merck and [Germany’s biopharmaceutical company] Satorius set up [or start the process], we have also seen interest from Switzerland’s Basel Area Business and Innovation [which visited the IFEZ last month] and Boston’s bio industry.

Stanford University’s research center is now in Songdo and we are in talks with Cambridge.

Chadwick International has a campus [within the free economic zone] that has a program from pre-kindergarten through Grade 12 where students from Gangnam to Bundang and Mokdong attend.

But this is not enough. We need to grab global companies including financial institutions that are exiting Hong Kong.

Our biggest obstacle is that we still don’t have the financial benefits that were offered in Hong Kong and face fierce competition from Singapore.

We have to study and compare why [global companies] are attracted to Hong Kong, such as what were the business-friendly policies and the reasons for their exits.

The existing Special Act on Designation and Management of Free Economic Zones is not enough. We have to create legislation on a global free city that encompasses Songdo, Yeongjongdo and Cheongna as well as Ganghwa so that we could turn into a true city that is business-friendly on the same level as Hong Kong and Singapore.

It’s difficult to create an overall framework that covers the entire country legislatively but it is possible when limiting it to Incheon.

So why Incheon?

Incheon not only has the geographical advantages of being close to China and having all the major infrastructures including an airport and shipyards but it is also a city that has wide open space available.

It’s not easy to do this in existing cities as the process of buying land from owners could take 20 years.

But we have a wide area that is inhabited and undeveloped in Songdo, Yeongjongdo, Cheongna and Ganghwa.

IFEZ Commissioner Kim Jin-yong in a meeting with private companies and government agencies from Switzerland including Christof Klopper, CEO of Basel Area Business and Innovation, at IFEZ on Sept. 29.

What is the most important issue that IFEZ needs to address?

There are too many regulations that need to be lifted.

One issue is the verbal promise. Global companies, when hoping to set up a business, choose a site in which they plan to build. Under existing law, they need to go through public bidding. And they may not get the area they have picked if the competition offers 10 won more.

Even when a company wants to set up an additional affiliate and expand in the same location, they have to sign a separate contract. The red tape makes it exhausting.

Even regarding so-called regulatory sandboxes, there are many improvements needed.

We had a start-up that was created by a former doctor from Asan Medical Center, which specialized in genetic data analysis that could be used in developing cures.

The start-up wanted blood collections, which is necessary to build up data and analyze it. But under the law, blood can only be withdrawn by a hospital.

The CEO is a doctor and yet he is not allowed by law to withdraw blood.

We requested the government to lift this regulation under the regulation sandbox, which was granted. But the condition on the sandbox was collecting samples from 1,000 people living in Songdo.

The company wanted to collect blood samples of 100,000 people, which would have given them the tools to make various genetic analysis.

We still have a long way to go.

We’re also asking the government to lift restrictions on stem cells therapy for the free economic zone.

IFEZ Commissioner Kim Jin-yong meets with start-up CEOs during a forum in October. [INCHEON FREE ECONOMIC ZONE]

Can you tell more about the New Hong Kong City project?

I believe we can’t have everything all at once. One cannot set a perfect goal where everything is achieved. There are always side effects and shadows.

The goal is to set up a system that can prevent those shadows from being cast.

We need to approach things from a new angle.

There have been numerous discussions that have been made on the planning as well as social consensus for global free city special legislation that stretches from Songdo, Yeongjongdo, Cheongna and Ganghwa.

The question is not about discovering something new but an issue of making the decision.

I say we start implementing the special legislation on the global free city in areas [such as Incheon] that have all of the conditions first.

After 10 or 20 years, we could broaden the strengths and if there are problems we could either scrap it or make adjustments.

Instead of trying to artificially bring about balanced development nationwide, it would be better to adopt a system in which [a city] is picked and then letting its success spread [naturally].

Global interest in the Korean entertainment industry thanks to the popularity of shows like "The Squid Game" is soaring. It is considered a growth engine for the country. Incheon is pushing for a special film zone while competing with other major cities such as Busan. Why should the government chosse Incheon and what is your appeal to major global entertainment producers?

There are no other better locations than in Incheon and it breaks my heart that it is being disregarded.

Why is it important? The Korean film industry just few years back was trying to protect itself against foreign entertainment by demanding a quota. Today we are globally recognized.

What we need is to create the conditions and environment where Korea’s potential and talent flourish.

Most of the actors and actress live in Seoul. Having them travel long distances to make a film or a show is unrealistic and inefficient.

K-content is an industry that is high value-added and also creates jobs.

Recently, global streaming services such as Netflix have been making aggressive investments that not only contributed to the diversification of channels [for Korean content providers] but also led to a surge in content exports.

Yet, under the current profit structure, subcontractors doing most of the work are not benefiting from the increasing profits.

More so, local producers are reliant on global companies’ investment as they struggle to secure investment.

Only if a stable production environment is provided near Seoul with the producer’s own capital can our local streaming industry excel.

Mount Eulwang can become a rational choice for productions as we have a lot of land available close to the nation’s capital and an accessible transportation system.

The IFUS HILL has the potential to become a major contributor in turning the country into a cultural powerhouse while vitalizing the tourism industry when targeting the annual 100 million people using the airport and 9 million transit passengers.

This is a good opportunity to boost tourism as those waiting for flights three to five hours could make a quick trip to the nearby IFUS HILL and not only get first hand experience on a film set but meet their favorite actors.

The maglev train that is currently idle could be used to transport those visitors.

We plan to convince the Ministry of Land, Infrastructure and Transport of the need to set up the visual content industry [in Eulwang] as well as vitalizing the airport economic zone while working closely with the Ministry of Culture, Sports and Tourism regarding the need for such an industry cluster as well as various industry associations.

The IFUS HILL and the streaming city in Cheongna [a streaming and content development cluster] will provide facilities and land at low costs that would meet the filming industry’s conditions.

While there are concerns that IFUS HILL in Yeongjongdo and Cheongna would result in fierce competition that would eat into each other profits, the common conception [in the industry] is that there is not enough.

Each area will complement each other and boost the Korean film and TV industry.

Computer rendering of IFUS HILL, the entertainment and film industry cluster, project in Eulwang, Incheon. [INCHEON FREE ECONOMIC ZONE]

Other culture and entertainment projects?

We are currently in the process of building Shinsegae’s baseball dome stadium in Cheongna International City and additional subway stations that are an extension of Seoul’s line No.7.

Once the Starfield mall in Cheongna is built, it will turn the dome stadium into a state-of-the-art multi-cultural facility with 20,000 seats available not only for baseball fans but also residents to enjoy various cultural events from K-pop and foreign artists performances, e-sports competition as well as various exhibits.

The line No. 7 extension line that stretches 10.77 kilometers will connect to Starfield Cheongna as well as the medical town and Hana Financial Town.

There has been continuous demand for increasing public transportation service in line with major developments.

How is the Yeongjong Sky City plan going?

The Yeongjong Sky City development is a major project that has failed to attract foreign investment six times since 2009 as there are major issues including height restrictions due to the proximity to Incheon International Airport. High development costs have also been a problem.

While the Land and Housing Corp. and the Incheon Housing and City Development Corp. in December completed a strategy that would specialize in the urban air mobility (UAM) industry, Incheon International Airport has requested the development of a logistics center as aviation cargo demand has surged since Covid-19.

We have to look into the matter of coordinating with the residents, who want the development of a theme park.

IFEZ plans to continue to cooperate in implementing a development plan that is practical and futuristic in relations with the aviation industry including UAM and policies that would boost the airport economic zone.

Last year, IFEZ achieved foreign investment of $738.6 million, which is a 34 percent year-on-year increase. But this year, foreign investment has only amounted to $111 million as of September. What is the reason and what changes do you plan?

The global economy has had an affect including a surge in raw material prices, rising interest rates and a sagging real estate market.

We are trying our best to attract investments and there are some contracts that are on the verge of being signed.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]