A conservative civic group holds a rally in front of the Gangwon Provincial Office in Chuncheon to protest Kolon Global's construction of the Korea-China Cultural Town in the eastern provincial county of Hongcheon in this April 2021 file photo. Yonhap

By Park Jae-hyuk

Kolon Global recently liquidated a special purpose entity established for the construction of the Korea-China Cultural Town in Hongcheon, Gangwon Province, in the wake of harsh criticism from the public earlier last year, according to its 2021 business report, Thursday.

The subsidiary of Kolon Group said that it lost 565 million won ($461,000) from its 5 billion won investment in the project to build a theme park on 1.2 million square meters of land in the eastern province aiming to attract Chinese tourists.

The builder plans to use the land for other purposes.

Its decision was a follow-up measure of the company's promise last year to "reconsider" the project.

In December 2018, Kolon Global signed a partnership deal with Gangwon Province and set up a special purpose entity a year later for the construction plan.

However, a Cheong Wa Dae website petition urging the company to scrap the project drew over 670,000 signatures in March last year, amid China's continuous attempts to distort the history of Korea's ancient heritage and kingdoms.

"I do not understand why we should provide a space to experience Chinese culture in Korea," the petitioner wrote.

Conservative civic groups also held rallies in the province, despite Gangwon Province Governor Choi Moon-soon's claim that the petition was essentially based on fake news.

"Culture is the best method of solving political disputes," Choi said at a press conference last year. "Despite the backlash, we should increase cultural exchanges in order to alleviate anti-China and anti-Japan sentiment."

Cheong Wa Dae also pointed out false information in the petition, although the presidential office added that local governments should pursue their tourist attraction projects to show Korea's excellent culture and raise the country's brand awareness.

The controversy also prompted a debate between Rep. Kim Nam-kuk of the ruling Democratic Party of Korea, who supported the project, and main opposition People Power Party's Lee Jun-seok, who is now the party's leader.

Amid the intensifying public criticism, Kolon Global eventually sent a letter to the Gangwon Provincial Government last April to express its intention to accept the request to revoke the project.

Although it denied the claim that the project was intended to build a so-called "Chinatown" for residential purposes, the company cited "public sentiment" as the main reason for its reconsideration at that time.

"We are aware of the fact that we are unable to continue the Korea-China Cultural Town project anymore," Kolon Global said in the letter. "Despite massive losses, we will reconsider the plan from scratch."

Since then, Gangwon Province has discussed liquidation procedures with four institutions that participated in the project ― Kolon Global, Inex Housing, China's People's Daily Online's Korean office and the Korea Wushu Association.