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🇰🇷 South Korea /Economy & Trade

Jeonbuk vies to become South Korea's third financial hub after 18 years

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • South Korea's financial authorities are formally evaluating Jeonbuk's bid to become the country's third financial hub, potentially ending an 18-year drought since the last designation.
  • Jeonbuk aims to establish specialized financial districts focusing on asset management, agri-finance, and climate/energy finance within its provincial capital region.
  • While there's optimism due to presidential support and financial group investments, some experts urge caution, citing the limited impact of existing financial hubs and the need for clear differentiation from Seoul and Busan.

South Korea's financial authorities have officially begun evaluating Jeonbuk's proposal to become the nation's third financial hub, a designation that has remained unchanged for 18 years since Seoul and Busan were first named.

The Financial Services Commission (FSC) has approved the evaluation framework for Jeonbuk's development plan, submitted by the Jeonbuk Special Self-Governing Province. The plan envisions transforming a 3.59 square kilometer area in Jeonju into specialized financial districts for asset management, agri-finance, and climate and energy finance. A committee of experts will conduct a thorough review, including on-site inspections, with a decision expected by year-end.

Established in 2008, the financial hub system aims to foster global financial centers by concentrating financial institutions and related industries. Seoul was designated for comprehensive financial services, while Busan specializes in maritime and derivatives markets. Since then, no other region has been added, making Jeonbuk's potential designation a significant development.

Finance requires selection and concentration. It must be a financial hub that creates synergy effects that differentiate it from Seoul and Busan while also achieving mutual coexistence.

— Kim Chang-ki, Professor of Business Administration at Korea UniversityKim Chang-ki emphasized the need for Jeonbuk to differentiate itself and create synergy with existing financial hubs.

There is considerable optimism surrounding Jeonbuk's bid. President Yoon Suk Yeol has publicly supported the initiative, and major financial groups like Shinhan, KB, Woori, and Hana have begun establishing bases in the region, signaling a commitment to building the necessary infrastructure. Shinhan Financial, for instance, plans to increase its Jeonju workforce significantly.

However, some experts emphasize the need for Jeonbuk to clearly define its niche and ensure synergy with existing hubs rather than simply duplicating their functions. Concerns also linger about the actual economic impact of the current financial hubs, which have faced criticism for not fully translating their designation into substantial regional economic benefits. The FSC itself acknowledged in its latest basic plan that "aspects of securing actual investment and expanding it to contribute to the regional economy have not been sufficiently realized" due to a focus on expanding physical infrastructure. Despite these reservations, Seoul and Busan have seen improvements in international competitiveness rankings, suggesting potential benefits if Jeonbuk's plan is executed effectively.

If Jeonbuk is nurtured as an asset management-specialized financial hub centered around the National Pension Service, it can possess its own competitiveness.

— Lee Hyo-seop, Senior Research Fellow at the Korea Capital Market InstituteLee Hyo-seop suggested a potential specialization for Jeonbuk, leveraging the National Pension Service.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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