pace is at a considerable premium in many east Asian locations, but not at the Gwangyang Bay Free Economic Zone (GFEZ) in southern Korea. At nearly 100 square kilometers (38.6 sq. miles), GFEZ has room for development of any and all types, from residential to entertainment, tourism to manufacturing, education to logistics. GFEZ is one of six free economic zones so designated by the Korean government in recent years to stimulate direct investment into the country and to compete with other Asian markets for the opportunity to service global and regional flows of trade and commerce.
      As a region, northeast Asia is becoming one of the largest economic blocks in the world; it accounts for about 27 percent of the world's population. The five countries of the region produced 21 percent of the world's goods in 2000 and will produce 30 percent by 2020. In 2006, 30 percent of the world's container traffic originated in northeast Asia.
      South Korea's free economic zones benefit from their northeast Asia location, with closer access to Japan, China's industrial coastline and the United States than southeast Asian ports and economic zones. But GFEZ has four distinct advantages over the other zones: (1) Creation of an industrial cluster is facilitated by the nearby presence of the Gwangyang Port, POSCO Steelworks, and the Yeosu National and Yulchon Industrial Complexes; (2) Physical infrastructure, including Yeosu Airport, the Gyeong-Jeon Railway and the Honam and Namhae Expressways are in place; (3) Established cities – Gwangyang, Suncheon and Yeosu – provide a desirable quality of life; and (4) The region offers employers an annual supply of about 46,000 engineering graduates.
      More than 40 companies have established operations at GFEZ, representing a diverse range of industry sectors: steel production, logistics, food processing, engineering and power generation, to name just a few.       GFEZ is comprised of five districts, each with its own mission in the overall development. Each of the districts has its own development agenda, with the first phases well under way and ongoing through 2011.
      • Gwangyang District: High-Value International Logistics (14.6 sq. km.)
      The purpose of this district is to be the pre-eminent logistics hub in northeast Asia. A key part of this strategy is development of the Gwangyang Port, to serve as the center of northeast Asian transshipment activity.
      • Hadong District: Manufacturing, Residential, Business & Leisure (12.5 sq. km.).
      A self-sufficient manufacturing city is the goal of the Hadong District, with about 40 percent of the district set aside for manufacturing activity. The Pohang Iron and Steel Company (POSCO) operates a giant, highly advanced steelworks nearby that was built between 1982 and 1992. Companies seeking to benefit from proximity to the POSCO plant can take advantage of incentives to do so in Hadong. Reclaimed land in the Galsaman hinterland is to be used to advance the area's shipbuilding industry.
      Tourism facilities are also to be developed in the district. Further into the future, in the 2016 to 2020 timeframe, the district will see more development, specifically of the Deokcheon and Duu interlands, and development of the Daesong Industrial Complex.
      • Yulchon District: Shipbuilding, Advanced Materials Industries (28 sq. km.)
      This mixed-use district is a series of industrial complexes that are to be developed through 2020. Phase 1 has been under development since 2004 and includes the Yulchon 1 Industrial Complex and further development of the Yeosu Airport, including the extension of a runway by 3 km. Thirty-nine companies already are establishing facilities at the complex, which is scheduled for completion in 2011. These include Hyundai HYSCO, Meiya and Yulchon Electric Power Corp. Samwoo Heavy Industries, too, is a major presence at the complex, where it is building a factory to produce shipbuilding parts. More recently, Ocean Hope Co. Ltd., a yacht and passenger ship manufacturer, signed a memorandum of understanding in July to bring manufacturing facilities to the complex.
      Phase 2 will get under way in 2011, which includes construction of the Yulchon 2 Industrial Complex and construction of the Gwangyang Port's container terminal. This phase of development will continue through 2015 and will be followed by Phase 3 in 2016. This phase will see development of the Yulchon 3 Industrial Complex.
      • Sindeok District: Residential, Educational, Health, R&D (25 sq. km.)
      This district, also knows as the Sindae hinterland, will serve largely as a location for non-business, leisure-related activities for GFEZ investors – a support city, in effect. The first stage of development includes residential, educational assets such as international schools and medical facilities, as well as the National Lease Industrial Complex. Much of the land in the Sindeok District is to be preserved as green space and park land for residents to enjoy. A second phase of development, to take place between 2011 and 2015, will involve construction of a logistics complex and another residential complex, Sunwol, in the Seonwol hinterland. Further development is planned in the district beginning in 2016.
      • Hwayang District: Tourism & Leisure (10 sq. km.)
      This district is being developed with tourists and leisure seekers in mind. It includes five sub-districts: (1) The Mountaintop District will include an observatory deck and cable-car system for bringing visitors to the summit of Bonghwa Mountain; (2) the Forest Valley District will offer spas, nature trails through the forest and a world village; (3) the Golf Island District will include an 18-hole golf course overlooking the sea, cottage, condominiums and an observatory deck; (4) the Marina Beach District will feature marina facilities and hotels; and (5) the Hill Top District will offer various sports and fitness facilities.       Phase One of the port development plan has been under way since 2004 and will last into 2010. A total of 34 berths are planned; 16 have been completed, four are under construction and 14 are planned. Of the 34, 29 berths will be large enough to accommodate 50,000-ton vessels, and four will accommodate 20,000-ton vessels. Hinterland properties also are being prepared at the port where companies will be able to invest in facilities for port-related activities, such as logistics, manufacturing, distribution and other functions. The west hinterland area will be 1.95 sq. km.; the east hinterland will be 2.5 sq. km. A third hinterland at the port adjacent to the east hinterland, known as Seonghwang, will be about a square kilometer in size and will support logistics warehouses and operations and industrial facilities.
      Gwangyang Port has been designated both a Free Economic Zone and a Free Trade Zone. For an explanation of incentives associated with investing in GFEZ, see the incentives table below.       POSCO Gwangyang Steel Mill, which began the operation in 1987, is adding another plate plant in Gwangyang making it the world's largest producer of high-demand steel plates. The plant will have an annual production capacity of over 7 million tons by 2011. The groundbreaking ceremony for the steel plate plant was held near the Gwangyang steel mill's mini-mill on July 23. Expansion in steel plate production will ease the supply shortage suffered by Korean shipbuilders and other heavy industries and will stretch supplies for high-quality steel plates used in the manufacturing of large container ships and LNG vessels.
      POSCO is planning to simultaneously erect iron-steel manufacturing and continuous casting line equipment as well as an Air Separation Unit (ASU), all required in producing steel plates. A total investment of 1.8 trillion won (US$1.7 billion) will be made.