By Choi Sung-jin
Six years have passed since the government introduced the “real estate investment immigration system,” whose biggest beneficiaries seem to be Chinese buyers of properties on Jeju Island.
The system initially grants a residence visa, followed by permanent residence later, to foreign residents who invest a certain amount into commercial real estate development in Korea, as part of the government’s policy to help reinvigorate the regional economy.
At first, residents in the nation’s southernmost island regarded the system favorably. Now, however, concerns are mounting over the Chinese “shopping spree” of land and other properties in a province dotted with resorts. Some worry the subtropical island could be reduced to speculative grounds for cash-laden Chinese.
As of Sept. 30, Chinese people had 7,205 blocks of land on Jeju Island, totaling 8.78 million square meters worth 799.1 billion won ($689.4 million), compared with 1,029 lots, 1.42 million square meters and 58.9 billion won at the end of 2011. “The Chinese don’t care about market value and buy out land they want at four or five times the going price,” said a broker in Jeju City.
Among foreign investors on Jeju Island, Chinese companies also stand out.
In the first half of this year, 21 foreign residents have spent 5 billion won or more on “greenfield” investment ― a type of foreign direct investment in which foreigners buy land and set up businesses. Sixteen of them were Chinese-related individuals or corporations.
Despite, or because of, the surge in Chinese investments, more than a few residents feel increasingly uncomfortable. Some hotels built and run by Chinese owners do business with only Chinese visitors, “leaving little money for locals,” as one resident put it.
There is more serious friction between Chinese investors and local communities. For instance, residents in Wolryeong Village, on the outskirts of the provincial capital, have suspended their wind farm construction project, after a recently nationalized Korean-Chinese resident bought nearby land to construct a resort complex and filed a complaint with the local administration. “Our project was designed to give benefits to all villagers, but it can’t go ahead because of a Chinese investor whom we don’t even know,” said a village leader.