Korean banks on South Korea’s Jeju island have reported as much as a thirty-fold increase in Chinese clients thanks to a series of real estate development schemes aimed at attracting Chinese homebuyers and vacationers to the resort location.
According to recent information from five major Korean banks – Shinhan Bank, Kookmin Bank, Korea Exchange Bank (KEB), Woori Bank and Hana Bank – total deposits by Chinese customers at their Jeju branches have more than doubled since 2012, with some banks reported a much higher rate of increase.
KEB said deposits from Chinese customers at its two offices on Korea’s southernmost island totaled 260.8 billion won ($254.8 million) in March, up from 4.3 billion won in 2012. During the same period, the number of Chinese corporate clients rose from nine to 43, while the number of Chinese private clients increased from 10 to 311, the lender added.
Woori Bank said it had 100 Chinese clients at its Jeju branches, who deposited a total of 196.9 billion won in March. In December 2011, it had 82 customers, who deposited a total of 151.5 billion won.
Local bankers speculated that the rise in banking activity has been fueled by investors participating in property development projects on the island who have become permanent residents of Korea.
Jeju is treated like a special economic zone in Korea, where the government allows gambling and non-Koreans who purchase apartments or condominiums worth over 500 million won ($488,000) and reside there for more than five years can be granted permanent residency.
Chinese Developing Casinos and Vacation Homes
In February this year a Chinese developer announced that it was joining with the company behind one of Singapore’s Sentosa casinos to invest US$2.2 billion in a new gambling-centred project on the island.
The joint venture between Genting Singapore Plc and Landing International Development Ltd. would create the Resorts World Jeju – the largest destination on South Korea’s Jeju Island.
In December last year, Dalian Wanda announced that it will be building the Jeju Dream Tower after signing a contract with an affiliate of South Korea’s Lotte Tour to build a pair of residential towers, both over 60 stories tall, on the island. Wanda, which is controlled by China’s richest man, Wang Jianlin, has become one of the country’s leading overseas investors.
The ferry that capsized on April 16 with 459 passengers onboard off the coast of South Korea was headed to Jeju Island. The island is only 533 kilometres (331 miles) from Shanghai.