The South Korean governnt announced it would proceed with the full-scale developnt of the new Saemangeum city in partnership with OTK Company.
Nam Pung-hyeon, Commissioner of the Saemangeum Developnt and Investnt Agency, and CEO Kang Jin-hoo signed an MOU regarding the establishnt of the Saemangeum Developnt Corporation and shook hands.
Following the announcent, the world's attention turned to Saemangeum.
“Saemangeum? Sounds familiar, where is it?”
“Is that the place with the world's largest reclamation project?”
“They’re going to develop it into a new city?”
“Are they trying to create a city like China's Pudong or Arica's Silicon Valley?”
Unlike IBs, PEFs, and pension funds that actively invest in real estate in major global cities, Kang Jin-hoo, the world's wealthiest man, had shown little interest in real estate investnt. Yet now, he had suddenly stepped forward to develop a new city on barren reclaid land.
Global corporations and investors unfolded maps of Korea and focused on Saemangeum.
“Whose land is this?”
“It's all owned by the South Korean governnt.”
“Can't we buy so land?”
“Currently, it's only being sold to companies for industrial use. To purchase, companies must directly move into Saemangeum, build facilities and factories, and conduct business operations.”
“Review investnt plans imdiately.”
Dostic and international companies that had previously hesitated imdiately declared their intention to invest, and employees at the Saemangeum Developnt Agency were screaming with joy at the flood of inquiry calls.
anwhile, OTK Company employees like Park Sang-yeop and Jung Gi-hong went to the United States to contact relevant companies.
Park Sang-yeop t Leslie Bayzle, President of 'Disney Parks, Experiences and Products.' It's a subsidiary of The Walt Disney Company that handles Disney the parks, products, and content.
“Saemangeum, being adjacent to China and Japan, is an optimal location to attract Asian tourists. Furthermore, it's a city poised to beco the future hub of East Asia, combining finance and high-tech industries. Korea, with a population of 50 million and a per capita inco exceeding $30,000, has a vast dostic market, so if Disneyland were to co, it would surely succeed. Above all, CEO Kang Jin-hoo is personally driving this project with great interest.”
The governnt had even set aside land for a the park in Saemangeum and had pleaded with related companies to invest, due to the significant economic benefits, including tourist inflow, that a the park would bring.
Disneyland had also received several proposals, which they had declined at the ti, citing the construction of Shanghai Disneyland as an excuse...
President Bayzle nodded imdiately.
“Thank you for the excellent proposal. Our teams are already reviewing it favorably. We hope Disney will continue to collaborate with OTK Company in various fields going forward.”
***
If you added up all the new city developnt plans announced by various countries, there would be hundreds. Saemangeum had been just one of them, but now, the situation had changed.
Kang Jin-hoo declared he would make Saemangeum an international financial city and Korea's Silicon Valley.
The announced plans were astounding. OTK Company itself planned to relocate its headquarters, move the OTK Research Institute, establish the world's largest battery production and research complex, build a new TWR research lab, a venture cluster, Korea's largest convention center, and a video production studio.
According to the announcent, Saemangeum would host all sorts of tourist and leisure facilities, including Disneyland, Universal Studios, and resorts, and indeed, the respective companies confird they were reviewing investnts.
If developnt proceeded as planned, it was predicted that at least 200,000 people would move out of Seoul alone within ten years.
With this, the relentless rise in housing prices in the Seoul tropolitan area, which the governnt had struggled in vain to control, finally hit the brakes.
Everyone had believed, and continued to believe, that there was no place, nor would there ever be, that could replace Seoul and the tropolitan area. That's why everyone had tried so desperately to buy an apartnt in the capital region.
But now, the situation had changed. Speculative demand vanished, and buyers who were about to make panic purchases, fearing they’d never own a ho otherwise, all shifted to a wait-and-see approach.
- Shouldn't I be buying a house in Saemangeum instead of Seoul?
- Whoa! They say Disneyland and Universal Studios are coming too.
- My company is also reviewing setting up a factory in Saemangeum.
- LOL! Because Kang Jin-hoo is doing it, all companies are now reviewing investnts in Saemangeum. This is insane!
- This is the OTK effect, no, this is an impact, this is a fact.
- Dad joke, not funny --;
- No matter how much they develop Saemangeum, it can never replace Seoul and the tropolitan area. Even if they cram companies in, it'll just lead to more weekend-only couples, like Sejong City.
- Think about it. People in the provinces want to go to Seoul to enjoy cultural life. But if what Kang Jin-hoo says is true, Seoulites will be going to Saemangeum for cultural activities. Then there’s no reason to insist on living in Seoul.
- We have to wait and see, but buying a house in Seoul right now is crazy. Listen to your hyung~
- LOLOL Aren't all the speculators screwed now?
Multiple-property owners who had taken out huge loans to buy several apartnts rushed to put their properties on the market, but no transactions occurred.
Land speculators were in the sa hot water.
Typically, when a new city developnt plan is announced... no, even before it's announced, speculators flock to the area.
Speculators had already bought up large tracts of land in the planned sites for the 3rd New Towns and built nurous unauthorized structures. Sure enough, when the Ministry of Land, Infrastructure and Transport announced the 3rd New Town plan, the speculators rejoiced inwardly while staging protests against it.
“Withdraw the 3rd New Town developnt!”
“Forced land expropriation is an infringent of property rights!”
“Oh no! I built this house with my life savings to live in a country ho. Now you want to tear down my house to build apartnts!”
“You can’t take my land, you scoundrels!”
Of course, they weren't genuinely opposed; it was all to get even a penny more in land compensation.
But now, it looked like the 3rd New Town developnt might actually be withdrawn!
If demand in the tropolitan area could be dispersed through Saemangeum's developnt, there was no need to insist on the 3rd New Towns. Although no official cancellation had been announced, land purchase negotiations had been halted.
The startled speculators scread.
“If a new city is developed in Saemangeum, we’re all dead!”
“Developnt should be in the tropolitan area! Why Saemangeum?”
“This is a waste of taxes!”
“It’s preferential treatnt for the Honam region to gain votes!”
“This is collusion between the governnt and OTK Company!”
“We must stop this at all costs!”
Multiple-property owners and speculators imdiately flocked to the front of OTK Company's headquarters. Speculators from the provinces chartered tour buses to co up.
They unfurled banners and, with headbands tied tightly, shouted forcefully.
“Proceed with tropolitan developnt as planned!”
“Proceed! Proceed!”
“Kang Jin-hoo, imdiately withdraw the Saemangeum new city developnt!”
“Withdraw! Withdraw!”
“Stop the environntal destruction of Saemangeum!”
“Stop! Stop!”
“Protect housing prices for the common people!”
“Protect! Protect!”
***
The front of OTK Company headquarters had long beco a famous spot for protests.
Now, even speculators were flocking here to demonstrate. Surprisingly, there were quite a lot of them. Hundreds had gathered today alone, and their numbers were growing.
Taekgyu looked down at the scene and asked.
“Weren't those people protesting to stop the 3rd New Town plan before?”
I shook my head.
“I guess they weren't sincere about that.”
“Hmm, are they tsundere?”
“Sothing like that.”
“But why are there so many real estate speculators in this small country?”
Is it because it's small?
Actually, there's no clear line between investnt and speculation, but many people consider investnt good and speculation bad.
However, while people say 'real estate speculation,' they don't say 'stock speculation.'
This is due to the unique characteristics of real estate as an investnt target.
Generally, for other commodities, whether the price goes up or down, those who bought them reap the profits or suffer losses. For those who didn't buy, it doesn't matter if a manipulated stock gets delisted or if Bantcoin hits 30 million won.
However, with real estate, those who didn't buy suffer the most, both when prices soar and when they plumt. When prices soar, living costs rise accordingly, and when they plumt, jeonse deposits or security deposits beco precarious.
“Those people are a problem, but the real issue was that the country condoned it.”
Korea has a structure that makes it incredibly easy to make money from real estate.
For example, consider soone living in a 1 billion won jeonse (lump-sum deposit rental) and earning 500 million won, versus soone living in a 1 billion won owner-occupied house whose value increases by 500 million won each year.
Who would people rather be?
Obviously, the latter is far more advantageous. To earn 500 million, one must work that much. But while the house price rises by 500 million, the hoowner does no labor at all.
More importantly, there's tax.
An annual salary of 500 million is subject to an inco tax of nearly 50 percent. But for real estate, capital gains tax isn't paid until it's sold (though property tax is paid). Even if sold, capital gains tax is significantly lower than inco tax.
So, it's natural for people to prefer unearned inco over earned inco.
When an opportunity to make money is right in front of you, isn't it stranger not to take it?
While verbally condemning multiple-property owners as speculators, it was the governnt that created a system allowing people to take out 80 percent loans, buy ten or twenty properties, register as rental businesses, and aim for capital gains.
Capitalism runs on human self-interest. The governnt's role is to regulate that self-interest with laws and taxes so it doesn't harm society as a whole.
After the Heo Chang-min administration took office, housing prices in Seoul and the tropolitan area skyrocketed by tens of percent. Among the employees, the fortunes of those who owned hos in Seoul and those who didn't were starkly divided.
Real estate shocks the economy when it rises, but it delivers an even bigger shock when it falls. Already, talk of multiple-property owner bankruptcies, bank insolvencies, and damages to jeonse tenants was erging.
The opposition party and so dia outlets blad for this, and speculators were shouting for to compensate for their fallen housing and land prices.
“They’ve been asking you to make a statent for a while now. What are you going to do?”
“Is there really a need for that?”
At my words, Taekgyu wagged his finger.
“You can’t do that. They ca all this way to protest; of course, you have to give them an answer. This won’t do. I’ll have to do it for you.”
Taekgyu scribbled sothing on a note and called a building security guard.
“Please deliver this to the protesters as OTK Company’s official stance.”
“Understood.”
A mont later, a commotion erupted among the protesters who received the note.
So people shouted in anger.
“Kang Jin-hoo, co out now!”
“Are you ssing with us?”
“Get on your knees and apologize!”
I looked at Taekgyu, startled.
“What did you write?”
Taekgyu shrugged.
“Just the disclair that always appears on stock market broadcasts.”
“What’s that?”
“Investnts may result in loss of principal depending on market conditions. The final responsibility rests with the investor, and our company bears no responsibility for investnt outcos.”
“……”
***
The political sphere was in a head-to-head confrontation over the supplentary budget bill proposed by the governnt.
The ruling New Politics Party argued that the supplentary budget needed to be executed to revitalize the economy for ordinary people, while the opposition party opposed it, claiming it was a populist budget aid at next year's general election and an attempt to cover up policy failures with taxpayer money.
In fact, the criticism that the supplentary budget was populist was accurate. No citizen would dislike the governnt spending money.
For that reason, a supplentary budget had never failed to pass before, and it was highly likely to pass this ti as well.
Opposition lawmakers, as well as ruling party lawmakers, ticulously strategized on how to steer the supplentary budget review to their advantage. If they were going to spend populist money, shouldn't they try to bring as much of it as possible to their own districts?
But amidst this situation, the governnt suddenly announced the Saemangeum new city developnt plan!
The Liberty Korea Party felt as if they had been blindsided.
Just monts before, Saemangeum's developnt had seed like a distant prospect. No one had thought any tangible results would erge within the current administration's term.
But Kang Jin-hoo stepped in, and the situation changed. With his capital and influence, he could certainly create a new city on a barren plain.
Even though no formal contracts had been signed yet, talk of an international financial city and Korea's Silicon Valley was already circulating.
What if this beca a reality?
It would have positive effects in many aspects, such as alleviating excessive concentration in the tropolitan area, achieving balanced national developnt, revitalizing the construction industry, promoting economic growth, increasing employnt, and boosting foreign direct investnt.
However, for politicians, whether it benefits their own re-election and party is more important than whether it benefits the country and its people.
The Blue House and the ruling party managed their expressions, anticipating a rise in approval ratings.
Although Saemangeum is located in Honam, a stronghold of the progressive camp, it was the Democratic Liberal Party, the predecessor of the Liberty Korea Party, that first initiated the developnt. As it was an item agreed upon by both ruling and opposition parties, it had continued as a national project even as administrations changed.
The Liberty Korea Party itself did not oppose the Saemangeum developnt, but if it were led by the current governnt and the New Politics Party, it would not help their approval ratings at all; it needed to be led by the Liberty Korea Party.
The governnt requested a supplentary budget from the National Assembly for Saemangeum developnt.
The supplentary budget amounted to a whopping 17 trillion won!
It was the largest supplentary budget in history, an increase of 10 trillion won compared to the previous one. Eighty percent of this was allocated for Saemangeum reclamation site construction, as well as for roads, railways, ports, and airports.
Other developnt plans in the existing supplentary budget proposal were pushed back or fizzled out. The opposition party imdiately rebelled against the ga-supplentary budget.
The Liberty Korea Party threatened not to cooperate with the supplentary budget or the normalization of National Assembly proceedings without an economic hearing, insisting that Deputy Pri Minister for Economy Jeong Ki-soo, Blue House Chief of Staff for Policy Lee Eung-gwan, and Kang Jin-hoo must attend.
Representative Yeon Nakyeong said,
“The governnt is deceiving the public as if all problems can be solved simply by passing a supplentary budget. Shouldn’t they first convince the public about whether there were any mistakes in economic policy so far and why a supplentary budget is necessary? A supplentary budget without an economic hearing is absolutely unacceptable. Furthermore, according to the Saemangeum developnt plan announced by the governnt, while it takes the form of public developnt, the leadership of the developnt is effectively in Kang Jin-hoo's hands. This is clear preferential treatnt for OTK Company! Our Liberty Korea Party will thoroughly investigate this on behalf of the people!”
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