Build me Hong Kong

Given the ambition and enough land, can you just build a new city to rival Hong Kong? That’s what the South Koreans are hoping to do. In fact, why stop at just one new Asian business hub?

For centuries the Korean peninsula, at the crossroads of China, Japan and Russia’s far east, was trampled by invaders. Today, South Korea wants to turn its strategic weakness to its commercial advantage: investment, not invasion, is the name of the game. The plan? To become the premier service hub for the world’s third-largest economic cluster, northeast Asia.

South Korea is already an industrial powerhouse, a leading producer of ships, cars, semiconductors and mobile phones. But with one eye on China’s advancing manufacturing capability and another on a post-industrial future, Korea wants to boost its service sectors: logistics, tourism and finance. To this end, it’s creating a series of special investment zones.

“Our benchmarks are Singapore and Hong Kong,” says Kim Kyung-Taeg, CEO of Jeju Development Centre (JDC). “We call it the ‘Hongapore’ project.”

Jeju is a subtropical island roughly 70km by 40km, popular with mainland tourists. But its ambitions are soaring. In 2002, Seoul declared Jeju a free international city (FIC), and granted it self-governing status in 2006. Jeju is now considering cutting all corporate taxes.

Tourism facilities already exist: three five-star hotels, an 18-hole golf course and a €135m convention centre, but JDC’s pr people insist this is barely the start. JDC has acquired land for three flagship projects: a “retirement resort”, a science town and a huge theme park. Plans for the latter €1.4bn, 4 million sq m project include a movie zone, and discussions with “a major American film studio” are, it is claimed, ongoing.

An hour’s drive inland, ground is being cleared for the €300m science park, which aims to lure hi-tech ventures from home and abroad. Another hour’s drive brings you to the €328m retirement resort. An artist’s impression shows where villas, hospitals and spas will be on what is still a remote headland occupied by a lone searchlight: Chinese tourists are welcome, Chinese fishing boats are not.

However, as yet there appear to be no contracts, beyond memoranda of understanding, for any major company to invest significant amounts in any project.

But as Jeju incubates its plans, there is progress at another wannabe Asian hub: Incheon. This port city is home to oil refineries, giant Daewoo factories and a spectacular new airport. On the city’s edge is Incheon Free Economic Zone (ifez), Korea’s most-promoted potential nexus, made up of Cheongna district plus Songdo and Yeongjong islands.

Last year ifez attracted €11.2bn in foreign investment. Among the companies on board are a German logistics firm, a Swiss robot maker and the US Portman Group, building what will be the world’s second-tallest tower. And from the IFez’s Songdo office are views over mudflats to a construction site where New York-based Gale International has sunk some $5bn (€3.7bn) in developing a brave new city.

According to blueprints, it will be the hi-tech home to 250,000 people, with a Jack Nicklaus golf course, Venetian-style canals and a park modelled on New York’s Central Park. Construction has already started on a Sydney Opera House-style expo centre.

Songdo aims to become the capital of the Yellow Sea, offering access to Korea’s own hinterland and to eastern China. But in spite of all the hype, issues remain. The Korean zones lack the glamour of Hong Kong, Singapore and Shanghai. Most critically, they have failed to reverse a decline in foreign investment, luring only €180m in 2006, compared to €4.2bn attracted by Shanghai’s Pudong.

However, experts point to the innovations that turned Korea from Asian backwater to economic juggernaut some 40 years ago. Michael Breen, author of The Koreans, says: “People scoffed at their first five-year plan in the 1960s. Today, people scoff at the IFez idea but they may have to eat their hats.”

While South Korea gets many things right (pop music in the form of BOA, mobile phone innovation thanks to SK Telecom and department stores such as Galleria), urban planning and architecture are not strong points. It is for this reason that projects such as Incheon and Jeju are having trouble setting the world on fire.

While Seoul’s mayor has learnt to focus on the softer points of urbanism, the message hasn’t spread fast enough to developers. Many of Seoul’s residential projects are architecturally non-descript and the city lacks the polish of the capitals it hopes to emulate.

New developments have the luxury of starting with a clean slate but in a small country such as Korea they are likely to follow by example and, for the moment, the only benchmark is Seoul. That said, things are moving in the right direction (a new Gimpo to Incheon rail link and riverside parkland project) – so long as the terrible traffic doesn’t slow them down.