A tale of two port cities: Incheon passes Busan as 'Korea's second capital'
![A view of Songdo in Incheon, a district designated as a free economic zone where schools and research and convention centers are located. [INCHEON METROPOLITAN GOVERNMENT]](https://koreajoongangdaily.joins.com/data/photo/2025/03/08/96711951-9ab5-4637-94dd-52245a587858.jpg)
A view of Songdo in Incheon, a district designated as a free economic zone where schools and research and convention centers are located. [INCHEON METROPOLITAN GOVERNMENT]
Regions close to Seoul are growing in economic size, while those further away are shrinking. The port cities of Busan and Incheon are two prime examples. Incheon, not Busan, now clenches the “Korea’s second capital” title in terms of size of economy.
Busan relinquishes "Korea's second capital" title to Incheon
Incheon’s local GDP reached 116.863 trillion won ($80.81 billion) in 2023, surpassing Busan’s 114.156 trillion won, according to Statistics Korea data released Thursday, marking the first time Incheon’s economic output surpassed the southern port city's.
Back in 2015, Busan’s GDP of 88.749 trillion won was around 7 trillion won larger than that of Incheon’s 81.805 trillion won; the gap narrowed and Incheon outstripped the southern port city in 2023. Incheon’s GDP, from 2015 to 2023, grew 42.9 percent, but Busan’s stopped at 28.6 percent. With the economies of Seoul and the cities surrounding the capital city growing at an accelerated rate, the GDP of the greater Seoul area — which encompasses the capital, Incheon and Gyeonggi — accounted for 52.3 percent of Korea's economy and 50.1 percent in 2015.
Jobs concentrate in the greater Seoul area
Just looking at Incheon and Busan’s population gives a hint into the two regions’ wildly different circumstances. Busan’s population in January shrank by 148,000 compared to five years ago while Incheon’s grew by 68,000 in the same period. Busan still has more people, but older adults account for a larger chunk of its population than they do of Incheon's. This is why Incheon’s work force of 1.747 million — the number of people 15 and older who are either working or looking for work — surpassed Busan’s 1.721 million for the first time ever in January.
The data indicates that the younger population is leaving cities outside of the greater Seoul area, like Busan, in favor of the capital region where jobs are concentrated. None of Korea’s 100 largest companies by revenue were located in Busan, the Busan Chamber of Commerce and Industry recently found using the Financial Supervisory Service’s data. Thirty-one of the top 1,000 were located in the city, but only 12, or 38.7 percent, were in manufacturing. The same year, Incheon housed three of Korea’s 100 largest companies and 37 of the nation’s top 1,000 firms.
The flow of money and people into greater Seoul directly affects the real estate market. Of the 72,624 unoccupied houses in January, 52,876, or 72.8 percent, were located outside of capital region. Financial authorities exempted homeowners outside greater Seoul from mortgage loan caps with the stated aim of promoting business at regional banks. But at a time when population and jobs are all concentrated in one area, there remains little actual demand for loans in the regions outside of it, leading to concerns that the authorities’ policies will have no real effect.
“Job seekers prefer jobs in greater Seoul, where education and medical infrastructure is well-established and there are wider options,” said Yoon Dong-yeol, a business management professor at Konkuk University.
“It’s true that there are no jobs outside of greater Seoul, but from the company’s perspective, they need to stay near Seoul at any cost because of labor shortages. If attractive cities, borne out of metropolitan areas clustered by region, are not created, the trend of concentrating in greater Seoul while other regions shrink will continue,” Yoon said.
BY JEONG JIN-HO [kim.juyeon2@joongang.co.kr]
No comments
Post a Comment