S. Korea reforms FEZs to take on HK, Singapore

William Lee, director of tourism investment for the Incheon Free Economic Zone, answers questions from media, Incheon, South Korea, Dec 4, 2014. [[Dai Tian / chinadaily.com.cn]

Inflow of 20 million Chinese tourists by 2020

Having been working with tourism industry for more than a decade, William Lee projects the inflow of Chinese tourists to reach 20 million by 2020, compared with 1.88 million in 2010, 4.6 million last year and 6 million this year.

He revealed that the government has approved the resort project led by Caesar's Entertainment Corporation of Las Vegas and Lippo Group, which has drawn much attention as the first foreigner-only casino resort in Incheon.

According to the Korean Herald, it is widely seen as a maiden move by South Korea to join the red-hot race with Macau, Singapore, Malaysia, Japan and other Asian destinations to attract international gamblers.

"It will be an integrated resort for culture and tourism," said Lee, adding that the construction will start in June.

Competitiveness within Asia

"The central government will spare no effort in attracting investment," said Park at the KFEZ promotion event on Thursday.

South Korea, located between China and Japan, has signed 46 FTA with countries and regions and was ranked first in Bloomberg's 2014 Global Innovation Index.

However, the country saw a 10.7 percent plunge in its FDI last year to $14.55 billion, with Japanese investment down 40.8 percent, said Yonhap News.

Lee Kyung-geun, tax partner with Seoul-based Yulchon law firm, cautioned on Thursday that the high regulation is the main reason behind the lower-than-expected FDI volume.

"We still need dramatic regulation reform in many areas," he added. "Singapore has very low tax rate for foreign companies and it's easier to win permanent residency," said Lee.

David Carbon, chief economist and managing director of economic and currency research for DBS Bank, said bolder deregulation measures have been taken under President Park's three-year economic innovation plan, such as in for-profit hospitals, joint venture schools and foreign-owned casinos.

"But Korea is not alone and there's a lot of competition," he said. "The only way to keep the economic growth from slowing down is to keep reinventing, constant restructuring and moving up to higher value."

"I hope the investment barriers will be continuously lowered," said Lee Kyung-geun.