1. 1 Enterprise City Project Status Jun 28, 2006 Presentation material for the 3 rd Korea-China Finance Meeting on Jun 28, 2006

2. 2 Agenda  Need for Balanced National Land Development II. Enterprise City Project Status III. Enterprise City Support System

3. 3 I. Need for Balanced National Land Development

4. 4 1. Land Usage and Conditions Concentration in the Metropolitan Area Fast Changing Internal and External Conditions 65% of the land are mountains, and usable land is only 5.8% of the total territory ※ World’s 3 rd highest population density(474/ ㎢ ) 47% of the population in the metropolitan area ※ Manufacturing : 57%, Bank deposit : 68% Fiercer competition among nations in the global age Age of the Northeast Asia begins ※ 34% of world population, 22% of world economy High-speed train and sophisticated IT industry expand life space

5. 5 46.2%(’98) → 48.7(’02) → 47.7(’04) 2. GRDP Trend in the Metropolitan Area

6. 6 3. New Regional Development Policy Policies to Promote Regional Development Strategic Clustering of Industrial Complexes Vitalize systems in certain areas Introduce regional development zones, designate 3-5 pilot cities Improve aged industrial complex Develop industrial parks as complex clusters Introduce quasi-industrial complex and designated rental complexes

7. 7 4. Methodical Management of the Metropolitan Area Reinforce Master Plan Function Introduce quality of life related indices such as environment, transportation, population, housing Change Met Area Readjustment Plan to Met Area Management Plan Invite participation from central govt, Metropolitan local govt, experts, village reps Use scientific methods such as land suitability test 3rd Metropolitan Area Readjustment Plan (’06~’20) Segregate Development and Preservation Areas Recreate competitively pleasant living environment by methodical management Private-Public Partnership

8. 8 II. Enterprise City Project Status

9. 9 Pilot Project Promotion Quick Wins in Enterprise City Development Project Raise local govts’ awareness of enterprise cities Attract investment from private sector Make subordinate laws effective by reflecting corporate needs Early system adoption by introducing standard model

10. 10 Selection Criteria Industry/Trade : Muan (Jul 8, 2005) Knowledge-based : Chungju, Wonju (Jul 8, 2005) Tourism/Leisure : Muju (Jul 8, 2005), Taean Yeongam, Haenam (Aug 31, 2005) ▶ Job creation, industrial cluster creation and such business bearing huge balanced national development effect ▶ Highly feasible business suitable for regional characteristics ▶ Environmentally sustainable business ▶ Showcase leading business that can gain quick wins

11. 11 Selected City Status (Total 6) Wonju (1M pyeong) Lotte E&C, Wonju Medical Device Techno Valley Chungju (2.1M pyeong) Isu Chemical, Daekyo D&S, Limkwang E&C Taean (4.72M pyeong) Hyundai E&C Haenam·Yeonga m (10M pyeong) FKI·KNTO Consortium, Jeonnam Development Consortium Muan (12.2M pyeong) Seowoo, Namwha, (tentatively named) Muan Enterprise City Development Muju (2.45M pyeong) Taihan Electric Wire Industry/Trade Knowledge-based Tourism/Leisure

12. 12 Project Status StageMuanChungjuWonjuTaeanMuju Yeongam, Haenam Outsource Dev Plan 06.2 05.1205.906.206.12 Apply for Dev Plan approval 06.8 06.606.806.12 Apply for implementation plan approval 07.3 06.1206.1007.507.9 Start construction 07.6 07.3 07.1007.12

13. 13 III. Enterprise City Support System

14. 14 Category Minimum Area Usage Types of Enterprise City Industry/Trade Knowledge-based Tourism/Leisure Innovative Hub Manufacturing and Trade R & D Tourism · Leisure · Culture Host Relocated Public Agencies 1.5M pyeong 1M pyeong 2M pyeong 1M pyeong

15. 15 Site Requirements Locate first in relatively underdeveloped areas And metropolitan region and major cities are excluded  Cities Priority Candidate Sites for Enterprise - Areas identified as underdeveloped under the Special Act on Balanced National Development - Areas with significant effects on development of the national economy such as reviving of the local economy and job creating effects - Areas designated as industrial clusters and knowledge based adjacent zone (Industrial Sites and Development Act, Industrial Cluster Development and Factory Establishment Act)  Areas Excluded from Enterprise City Considerations - Seoul Metropolitan Region according to Seoul Metropolitan Area Readjustment Planning Act - Major Cities (gun excluded) - Large development project-concentrated areas

16. 16 Support from Central & Local Govts  Tax Breaks - National tax, local tax, agricultural lands preparation fees, public asset rent - Exemption: public waters use fees, development fees, traffic inducement fees - Support tenants prepare leased site and install amenities - Priority support to tenant companies with employee training cost  Financial Support for Infrastructure Development &Expansion  Funding  Support for Acquiring National and Public-Owned Assets - Enter into private contract with developer, repayment on equal installments within 10-20 years

17. 17 Other Enterprise City Support System Ceiling on total investment eased Land taking rights and rights to issue land redemption bonds granted Approval process streamlined (41 laws 88 items for approval ) Special treatment for installing and operating educational and medical facilities Special treatment for installing & operating sports facilities Support tourism/leisure enterprise city by allowing casino construction Site preparation and housing supply exceptions

18. 18 ★★★ Thank You ★★★