China signs first offshore processing agreement with North Korea

By Michael Rank

China has signed its first offshore processing agreement with North Korea, under which four companies in the border city of Hunchun will export textiles which will be made up into shirts in the DPRK, a Chinese website reports.

Under the two-year agreement from January 2013, the textiles will be made up into 8,000 shirts, the report said, adding that the companies will be relieved of some export and import taxes. It gave no further details.

The report said the deal reflected low labour costs in North Korea as well as severe labour shortages in Hunchun, where there is a deficit of 3,500 workers. It said it was the first such agreement not just for Jilin province but for China as a whole, and had the approval of customs headquarters in Beijing.

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