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Busan is currently the epicenter of an elusive smart city war between Communist China and the U.S. As American e-commerce services like Microsoft and Amazon Web Services have plans to establish a data center in South Korea, China is also looking to build a distribution hub for Northeast Asia in Busan as well as a communicable disease research center. This op-ed looks at how the Moon Jae-in administration is pushing ahead to create a new airport at Gadeok Island, Busan, which is controversial amongst Korean politicians and has been deemed unstable by previous administrations. It’s suggested that the idea of a new Gadeok Island airport is aligned with Chinese plans and is another step towards reducing U.S. influences on the Korean peninsula.
Microsoft announced its plan to establish a data center in Korea for the first time in 2016. Microsoft chose LG CNC as the operator for the Busan Data Center on February 12, 2020 and will begin operating the center in May. Amazon Web Services (AWS), which holds the majority of the Korean cloud server market, will start cooperating with Busan on smart city and cloud service-related platforms. AWS announced that it signed a new agreement with Busan to strengthen their development cooperation on smart cities and innovation on public welfare at the Busan Cloud Innovation Center on July 25, 2019. What is the purpose of Microsoft and Amazon trying to build data centers in Busan?
As China is working on building a distribution hub for Northeast Asia’s electronic commerce (E-Commerce) market near Busan Gimhae International Airport and Gadeok Island, Microsoft and Amazon also are trying to create an outpost in the region by establishing this data center. It became difficult for China to attract foreign investment to the country due to the trade war with the United States. South Korea has become a safe haven, a place to circumvent sanctions for Chinese and other foreign companies that cannot invest in China. Furthermore, Busan has a geopolitical advantage that people can easily travel to China and is a distribution hub for Northeast Asia, including Japan.
A senior official from the Chinese People’s Association for Friendship with Foreign Countries proposed three key cooperation projects with Busan at the 2020 International Forum for Northern Economic Cooperation. He suggested establishing a distribution hub for the E-Commerce market in Northeast Asia, a research center focusing on researching and developing vaccines and other virus-related subjects operated jointly by South Korea, China and Japan, and a strategic platform to facilitate tourists’ interactions and the advanced technology manufacturing sector.
“China believes that the global E-Commerce giant Alibaba can take advantage of the distribution line to Europe and America, as well as its own country and Northeast Asia, through both the air and ocean if it is provided with some 100,000 square meters of land between the Gadeok Island, where South Korea’s southeast hub airport will be built at, and Busan Port,” said Kim Deok-joon, president of the China-Republic of Korea Friendship Association. He even introduced the idea that China would be willing to pay for the majority of the project’s estimated budget of 800 billion won. It appears that China is showing its strong will to fight against the American company Amazon that is trying to expand its market in Asia, while the competition between the United States and China continues to intensify.
The second project that was proposed is establishing the Korea-China-Japan vaccine and virus research center. “China has lots of knowhow related to curing the Covid-19 virus, and high quality Chinese traditional medicine,” said the Chinese People’s Association for Friendship with Foreign Countries. “We will be able to maximize that benefit by integrating this with Western medicine and biotechnologies that Korea and Japan are leading in.” There will be some 100 medical professionals and researchers from the three countries at the research center. They will be working on curing patients with transmissible diseases and researching vaccine development. There is a large change that the center’s location will be near Busan University Hospital in Yangsan, South Gyeongsang. It is reported that several global bio-related companies will relocate to the region as well.
The South Korean government is trying to change its plan to build a new airport in the Busan region in accordance with the Chinese proposal to establish the distribution center for Northeast Asia. It started pushing to build a new airport around 10 years ago, pointing out that the current Gimhae Airport is old and has low capacity. There were some inconveniences, as the government had to use ports in Busan and Incheon, as the distribution line were not well developed. The Lee Myung-bak administration considered Miryang and Gadeok Island as the location for the new airport. However, Gadeok Island is a small island that is hard to build an airport on. Also, it did not qualify as a location due to the unpredictable weather and vulnerability related to weather issues. The Moon Jae-in administration argues that the assessment by the previous administration was wrong and that the economic feasibility of building a new airport on Gadeok Island will be higher. It is pushing ahead with the idea by backing it up with this plan to create the Northeast Asia’s distribution center. The government can be seen as reflecting only the Chinese position instead of considering the stability and suitability of the airport.
Currently, the idea of creating a new airport at Gadeok Island is very controversial among politicians. It has to pick a new location for the airport after terminating the existing location set for the new airport. It appears that it is more reasonable to build the airport in a different location than the one that the Moon administration and China want to build.
