DPRK looking to greater Chinese investment

According tot he Washington Post:

Squeezed by food shortages and financial sanctions, North Korean leader Kim Jong Il appears to be reaching out to China and Chinese investors in a way that could mark an extraordinary opening in the insular nation’s shuttered economy.

Kim might soon travel to China, according to the office of South Korea’s president and U.S. officials. They cited preparations that appear to be underway in the Chinese border city of Dandong and in Beijing. The Chinese Foreign Ministry said Thursday it does not have information on whether Kim will visit China.

“The North is now planning to open foreign-owned factories not just in closed-off special economic zones, but in major cities like Nampo and Wonsan,” Lim said. Until now, the government has confined nearly all foreign business operations to sealed-off economic zones, such as Kaesong near the South Korean border. “The military is closely cooperating with the State Development Bank to try to increase foreign investment.”

Although the repressive power of the army and security forces remains strong, the North’s command-style economy is a ruin. There were unconfirmed reports of starvation deaths in some areas this winter.

Kim, 68, and showing the effects of a 2008 stroke, is in the early stages of handing power over to his untested 27-year-old son, Kim Jong Eun. But the legitimacy of the succession — and of the state itself — is being weakened by the growth of the markets and increased public access to foreign media.Refugee surveys show that many North Koreans blame Kim’s government for food shortages, corruption and incompetence.

In South Korea and China, there is widespread skepticism about North Korea’s willingness to create modern banking systems and enforce laws that allow foreign companies to operate under standardized accounting rules.

Companies that have invested in North Korean mineral ventures have complained for years of corruption and outright theft by the government.

Read the full story here:
Overtures to China may signal opening of North Korea’s economy
Washington Post
Blaine Harden
4/2/2010

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