Chinese foreign ministry publication frank on Rason and Hwanggumphyong

The Choson Ilbo reports:

The World’s Knowledge biweekly published by World Knowledge Publishing House under the [Chinese] Foreign Ministry supervision dismissed the North Korean plan to build what it called “its own Hong Kong.” In its latest edition, Tang Longwen, an associate professor at the Dandong party school, said, “The North’s plan to develop the two islands by leasing them to Chinese enterprises costs too much.”

Chinese businesses “need to check if it is worth making huge investment in areas that neither have abundant resources nor are worth developing,” Tang wrote.

Tang also mentioned risks from the lack of proper governance in North Korea. Citing the joint Korean Kaesong Industrial Complex as an example, he said, “What is important is not the development of the two islands but whether the North genuinely intends to open its doors. Everybody worries that the North will just open and close the islands as it likes.”

He cited the North’s habitual disregard for international norms, apparently referring to its unilateral abrogation of its contract with Hyundai Asan in the Mt. Kumgang package tour project and repeated bans on passage to the Kaesong industrial park.

“The North is calling for simultaneous development of the Rajin-Sonbong area and Hwanggumpyong, but China is more interested in the Rajin-Sonbong area, which would give it access” to the East Sea, he said. As Chinese President Hu Jintao said during Kim’s visit to China in May, “the two countries should seek ‘win-win’ economic cooperation. It should not be sought through one-sided aid.”

On three visits to China between May last year to May this year, Kim asked China to support the development of Wihwa and Hwanggumpyong islands, but Beijing told him cooperation “should be sought based on market principles.”

Chinese officials attended a ground-breaking ceremony on Hwanggumpyong at the North’s request in June, but there has reportedly been no progress in construction since then.

A recent in the Financial Times article quotes another Chinese academic who expresses some skepticism about the success of the new ventures:

North Korea’s past experience of working with other countries has left it with a serious credibility problem and this will stop a lot of foreign investment from even considering these new zones,” says Zhang Liangui, a professor of international strategic research at China’s central Communist party school.

Mr Zhang graduated from the Kim Il-sung University in North Korea and is considered one of China’s top experts on the country. “Even though Chinese entrepreneurs are being encouraged and supported by China to invest there, they are still very cautious about considering the Hwanggumphyong Island Economic Zone, and investors from other countries will be even more circumspect,” he explains.

“It will be very difficult to build this zone up,” he adds, citing the unpredictability of the political situation in North Korea and UN sanctions which would prevent many investors from considering the venture.

In addition, analysts warn that similar moves in the past have led to nothing. The Rason zone that Chinese and North Korean officials broke ground on in June will incorporate an area that was designated as an investment zone in the early 1990s but never attracted any real interest.

Previous posts on Hwanggumphyong here.

Previous posts on Rason here.

Read the full story here:
Chinese Magazine Dismisses N.Korean Development Dreams
Choson Ilbo
2011-8-31

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