North Korean and Chinese scholars clashing over North Korean business laws

By Benjamin Katzeff Silberstein

Yonhap reports about a seemingly interesting forum that has taken place in Beijing, sourcing Global Times reporting. The article is an interesting illustration of the divergent ways in which Chinese and North Korean scholars/analysts seem to view North Korea’s economic situation and business environment (my emphasis):

Scholars from North Korea and China recently held a forum where they remain at odds over whether the isolated North could attract foreign investors and protect them, according to state-run Chinese media.

North Korean scholars insisted that their country offer a raft of legal and financial incentives for foreign investors, but Chinese scholars raised doubts over the North’s efforts, as it is under U.N. sanctions over its nuclear and missile programs.

The three-day forum, held in the Chinese border city of Yanji, ended on Sunday, state-run Global Times newspaper reported on Tuesday.

Paik Il-sung, a legal professor at North Korea’s Kim Il-sung University, said that the North’s laws protect the property rights of foreign investors. Even if the rights of foreign investors undermine North Korea’s national interests, an “unavoidable confiscation” of their property would be carried out in accordance to laws, Paik said.

Choe Su-gwang, an economics professor at the North Korean university, said that North Korea allows foreign investors to arbitrate conflicts with the state throughout an arbitration panel.

Besides geopolitical risks, poor infrastructure was cited by Chinese scholars as one of main reasons for deterring foreign investment in North Korea.

Lin Jinshu, a professor from China’s Yanbian University, said China intends to build infrastructure in the North’s Rason special economic zone, but a lack of relevant accords prevents Chinese investors from doing so.

Rason was designated by North Korea as a free trade zone in 1991, but efforts by the North to bring life to the zone have failed amid geopolitical concerns.

A monthly usage fee for the Internet in the Rason economic zone is 7,000 yuan (about US$1,089), but the Internet there is slow as a “turtle’s pace,” Lin told the forum.

Zhang Huizhi, a professor at China’s Jilin University, also raised the question how North Korea could protect property rights of foreign investors in the event of a war.

Aside from the comment about an arbitration panel, it is notable that the emphasis by the North Korean side of the discussion, at least as reported in this piece, lies very heavily on legal text. It’s enough if written laws are good, seems to be the attitude, which is of course not the way most potential investors see things.

Read the full article:

Yonhap News

N. Korean, Chinese scholars at odds over investment in N. Korea

09-23-2015

 

 

 

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