Paju City Goes All Out to Secure 2 Trillion-Won "Peace Economy Special Zone," Build AI and Advanced Manufacturing Hub

Paju to Invest 2 Trillion Won in Land 2.4 Times the Size of Yeouido
6.9-Square-Kilometer Mixed-Use Development for Industry, Tourism and Housing in Paju-eup, Munsan-eup and Beyond
Six Strategic Industries, Including AI and Advanced Manufacturing; 210 Companies Express Interest in Moving In
LG Display-Led Development to Combine Materials, Parts and Equipment with Climate Tech and Pharmaceuticals
One-Stop Ecosystem Spanning R&D, Production and Logistics

Paju City in Gyeonggi Province, led by Mayor Son Baechan, is putting everything on the line to attract a Peace Economy Special Zone, aiming to break free from the shackles of border-area regulations and emerge as a hub for future high-tech industries.

Paju City announced on November 13 that it plans to develop a Peace Economy Special Zone on a 6.9-square-kilometer site spanning Paju-eup, Munsan-eup and Wollong-myeon, investing approximately 1.9 trillion to 2 trillion won from 2026 through 2035. The site is about 2.4 times the size of Yeouido, which covers 2.9 square kilometers. The Ministry of Unification is expected to announce the results of its designation process by the end of this year, following consultations with relevant government agencies.

The planned site for the Peace Economy Special Zone, viewed from above. Photo courtesy of Paju City.

 A Mixed-Use Development Combining Industry, Tourism and Housing, Beyond a Simple Industrial Complex

The core of the project is its "mixed-use development," which sets it apart from conventional industrial complexes. The proposed zone will comprise five districts: two industrial districts, a mixed-use district, a cultural tourism district and an inter-Korean logistics district. The plan is to create a self-sustaining city of the future by combining housing and tourism infrastructure with factories and research facilities.

Six key strategic industries are slated for development: artificial intelligence (AI), advanced manufacturing, pharmaceuticals, climate technology, food technology and smart logistics.

Paju City has designated AI as its top priority industry. Its strategy is to first attract anchor companies specializing in industrial AI and data analytics to lead the digital transformation of local manufacturers, then build an industrial ecosystem that draws in related businesses. In advanced manufacturing, the city plans to expand into electronic components and advanced materials, building on LG Display's existing Paju plant and its partner companies.

In addition, the city aims to establish a complete ecosystem in which everything from research and development (R&D) to production and distribution takes place in one location, covering pharmaceuticals (research, production and cold chains), climate technology (renewable energy, energy storage systems and carbon reduction), food technology (alternative foods and smart processing) and smart logistics (automated centers and logistics robots).

Infographic of the planned site for the Paju Peace Economy Special Zone. Provided by Paju City.

From Land That Bore the Burdens of Regulations and Security to a Forward Base for Inter-Korean Economic Cooperation and Advanced Industries

Despite its geographical advantage of being close to the Seoul metropolitan area, Paju has been left out of development for more than half a century due to overlapping regulations, including restrictions on areas protected for military facilities.

Paju City plans to turn its status as a "border area" into a source of growth. This is why it selected areas in Munsan-eup and Paju-eup for the zone, where the impact of regulations is relatively limited and the Gyeongui Line railway can be utilized. The city plans to first build a competitive high-tech industrial city and then, if inter-Korean exchanges resume in the future, use it as a forward base for economic cooperation linked to places such as the Kaesong Industrial Complex.

Demand from companies looking to invest is also supporting the plan.

According to Paju City, as of late September, when it applied for the zone's designation, 210 companies had already submitted letters of intent to move in. The city has signed memorandums of understanding (MOUs) with four major associations—the Korea Artificial Intelligence Association, the Korea Pharmaceutical Distribution Association, the Korea Climate Tech Association and the World FoodTech Council—to expand its network for attracting businesses.

Local political leaders have also lent their support. In September, Paju Mayor Son Baechan, National Assembly members Yoon Hu-deok and Park Jeong, Paju City Council Chair Choi Yu-gak and members of the Gyeonggi Provincial Council adopted a joint proposal declaring Paju the "optimal location for a Peace Economy Special Zone." They followed up on October 16 by personally delivering the proposal to the Ministry of Unification and the Ministry of Land, Infrastructure and Transport, urging the national government to make a decisive commitment.

Paju Mayor Son Baechan visits the Ministry of Unification and delivers a joint proposal calling for Paju to be designated a Peace Economy Special Zone. Provided by Paju City.

The joint proposal set out four reasons why Paju needs a Peace Economy Special Zone. The first is to secure a new growth engine for the border area, arguing that a foundation for development is needed in recognition of the exceptional sacrifices made for national security. The second is to establish a forward base for inter-Korean economic cooperation; the third, to become a global hub for peace; and the fourth, to foster advanced industries and attract global companies.

A Paju City official said, "This is the time to build a foundation for future growth commensurate with the exceptional sacrifices made for national security. Through the designation of a Peace Economy Special Zone, we will become a strategic national hub that leads the way in the shared prosperity of the Korean Peninsula and the development of advanced industries."

This content was produced with the assistance of AI translation services.