Suwon, where the population is declining, is drawing up a development plan for a free economic zone worth about 2 trillion won. The idea is to secure a new growth engine by developing 1.86 million square meters in western Suwon into an R&D hub for semiconductor, artificial intelligence (AI), and bio corporations. Suwon aims to win designation as a free economic zone in the first half of next year.
According to related agencies on the 24th, Gyeonggi Province and Suwon are jointly formulating the Suwon free economic zone development plan. The target area is 1.86 million square meters spanning Guun, Gosaek, and Tap neighborhoods in Gwonseon District. The current draft plan calls for investing about 2.07 trillion won from 2027 to 2036.
Suwon plans to submit an application after Gyeonggi Province finalizes the development plan and after prior consultation and advice with the Ministry of Trade, Industry and Resources. An official with Suwon's Free Economic Zone Promotion Team said, "While this could change depending on the government's schedule, we are preparing the development plan with a goal of designation in Mar. next year."
Suwon plans to develop the free economic zone as an advanced industry hub centered on R&D, rather than a large-scale manufacturing complex. By attracting corporate headquarters and research institutes, as well as education and medical facilities related to advanced industries, the city aims to strengthen western Suwon's self-sufficiency.
Once designated as a free economic zone, the city can offer benefits such as tax and rent reductions to qualifying foreign-invested corporations and reshoring corporations. Foreign-invested corporations can receive reductions on the tariff for imported capital goods and on acquisition and property taxes, and they can also receive support for costs to install research facilities and for employment and training expense.
Suwon plans to link the free economic zone with existing development projects such as the Tap-dong Innovation Valley and the Suwon R&D Science Park. The city envisions building a "ring-shaped advanced science innovation cluster" connecting northern Suwon and Uman technovalleys, Gwanggyo Technovalley, and the Gosaek-dong Delta Plex.
Behind the push for a free economic zone are Suwon's population decline and competition among cities in southern Gyeonggi to attract advanced industries. According to resident registration population statistics from the Ministry of the Interior and Safety, on July Suwon's population was 1,185,332, down about 4,920 from a year earlier. In contrast, Hwaseong is approaching 1 million, and Yongin recorded the 1.09 million range.
Suwon believes differences in dwelling supply and job conditions have influenced population movements. Most of Suwon's urban area is already developed, making it difficult to secure new dwellings and industrial land. By contrast, housing supply continues in Dongtan in Hwaseong and in Pyeongtaek and Osan, and large-scale advanced industry investment—such as Samsung Electronics' Hwaseong and Pyeongtaek business sites and the Yongin semiconductor cluster—is concentrated in nearby cities.
Suwon's industrial base has also weakened compared with the past. According to Suwon's tally, from 1996 to 2012, more than 10 large corporations left Suwon. The city believes regulations in the Seoul metropolitan overcrowding control zone and a shortage of industrial land have hampered efforts to attract corporations.
The key issues are foreign investment demand and how to finance project costs. Because the free economic zone must be reviewed by the Ministry of Trade, Industry and Resources' Free Economic Zone Committee, the schedule presented by Suwon may change.
A Suwon official said, "The goal is to transform Suwon into an advanced science research city by connecting the free economic zone with research and development hubs in the region."