Archive for the ‘Wonsan-Mt. Kumgang International Tourist Zone’ Category

Total development plans completed for economic development zones: Tenant companies to be put under selection process

Friday, February 27th, 2015

Institute for Far Eastern Studies (IFES)
2015-2-27

According to the Choson Sinbo, a pro-North Korean newspaper in Japan, North Korea is promoting “diversification in foreign economy,” and has recently signed “bilateral agreements on promotion and protection of foreign investment” with 28 countries and “double taxation avoidance agreements” with 13 countries.

The newspaper cited an interview with Kim Chon Il, the director of (North) Korea Economic Development Association: “multilateral foreign economic development signifies developing foreign economic relations with many countries around the world in various economic sectors and units, unlike in the past where foreign economic activities were concentrated around only a few countries.”

In addition, he said, “the form of exchange and cooperation is also orienting toward diversification” and “We are promoting businesses in various sectors in trade, investment, joint venture, and science and technology cooperation based on new products and achievements made with the state-of-the-art science and technology.”

The Choson Sinbo article emphasized that, “Currently foreign economic business projects are not delegated to only a specific unit,” and that “Choson [North Korea] is promoting various business establishments and management of domestic institutions, corporations, and organizations as well as encouraging various overseas companies and individuals in joint venture projects and establishing independent foreign companies in special economic zones.”

The news also elaborated on the amendment of recent foreign investment laws and explained that new regulations and bylaws are being developed to incorporate various investment strategies including internationally recognized BOT (build-operate-transfer) method.

Moreover, the article confirmed that “the core of the DPRK’s foreign economic development lies with the economic development zones,” and the development plans for economic development zones and investment attraction projects are well underway since last year.

Director Kim Chon Il confirmed that “Currently, the total development plans of 13 provincial-level economic development zones were completed and the total plans for the rest of the economic development zones are in the closing stages.”

He added that the Wonsan District Development General Corporation was launched last year and disclosed that the development plans for the Wonsan-Mt. Kumgang International Tourist Zone was completed.

Furthermore, Kim estimated the preparatory period for the business to take about two years and that the substantial business plans must begin now, starting with the selection process for tenant companies. He stressed, “It is timely to vigorously attract investment from around the world on a large scale in accordance with the total development plans of the economic development zones.”

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KCNA: Business success in store for foreign investors

Monday, February 2nd, 2015

According to the article:

A project to set up economic development parks has been steadily pushed forward in different parts of the DPRK, drawing attention of many foreign investors, says Ri Sun Hak, a department director of the Ministry of External Economic Relations.

He said the DPRK government has made all its efforts to create a legal environment favorable for the rights and interests of foreign investors.

The government encourages them to invest in the country on the principle of equality and mutual benefits, he said, and continued:

A series of laws on foreign investment, including the DPRK Law on Foreign Investment and the Law on Economic Development Parks, has been newly enacted, amended and supplemented to provide foreign investors with legal guarantee.

The DPRK government has already made the agreement on promotion and protection of mutual investment with 28 countries and agreement on prevention of double taxation with 13 countries in Asia, Africa and Europe.

Rules and detailed regulations have been adopted one after another to introduce internationally recognized investment formulas in keeping with the actual circumstances of the country.

Now the DPRK government has been carried forward the cooperation with Russian companies in the fields of railway transportation and harbor express service, while establishing economic development parks and paying deep attention to different projects of cooperation with other countries in the field of investment.

Tourism is also gaining momentum with the development of Wonsan-Mt. Kumgang and Mt. Chilbo areas into fashionable tourist attractions.

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DPRK announces investment briefing on Wonsan tourism zone

Tuesday, January 20th, 2015

According to KCNA (2015-1-20):

Briefing on Wonsan-Mt. Kumgang Int’l Tourist Zone to Be Given

Pyongyang, January 20 (KCNA) — A briefing on investment will be given in the DPRK in April-May to develop the Wonsan-Mt. Kumgang international tourist zone.

A number of overseas Koreans and foreign investors have expressed their deep interest in the project.

In this regard, KCNA had an interview with O Ung Gil, general manager of the Wonsan Area Development Corporation.

Noting that the participants in the briefing are scheduled to tour Wonsan City and Mt. Kumgang, the general manager said:

The Wonsan-Mt. Kumgang international tourist zone began to be developed under a June Juche 103 (2014) decree of the Presidium of the DPRK Supreme People’s Assembly.

The master plan for its development was completed, and a sectional planning and the infrastructure construction and repairing are now under way.

The development zone covers an area of 430 square kilometers, which involves Wonsan City and Popdong, Anbyon, Thongchon and Kosong counties and some parts of Kumgang County in Kangwon Province.

This area is famous for lots of historical relics, tourist resources and beauty spots, including Phyohun and Singye temples, lakes Sijung and Tongjong, Ullim Falls and Songdowon beach.

In particular, Mt. Kumgang is noted for its natural beauties of mountains and valleys and newly-built Songdowon International Children’s Camp and the Masikryong Ski Resort are enjoying great popularity.

We will carry on the development and tourism in the area at the same time through brisk exchange, and our general goal is to turn the zone into a world-level one with high service standard and capability.

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DPRK holds investor forum in Dalian

Monday, September 22nd, 2014

According to the JoongAng Ilbo:

North Korea held a rare investors relations event over the weekend and its more capitalistic and entrepreneurial manner hinted at a new openness to foreign investors and economic reform in general.

“The door is wide open. Come on in any time,” said Oh Eung-gil, president of North Korea’s Wonsan District Development General Corporation.

Oh was inviting South Koreans to invest in the North as he addressed a group of businessmen at an investors relations session at the Shangri-La Hotel in Dalian, China, on Saturday.

“We prepared all the conditions to develop Mount Kumgang and waited for the South to change its attitude,” said Oh. “But we can no longer wait, so we are trying to attract foreign investors. We have no intention to exclude the South.”

The investors relations event was arranged by the Dalian chapter of the World Federation of Overseas Korea Traders Association. About 200 Korean businessmen from around the world including Australia, China and the United States attended.

From North Korea, five delegates including Oh joined the event.

The North started its event with a presentation by Oh on the country’s laws governing foreign investments and the business environment.

“We have already simplified the investment application procedures and created regulations that meet international standards,” Oh said.

He spent a considerable amount of time to assuring businessmen that their investments, if made, will not vanish overnight.

“With Article 19 of the Foreign Investment Act, we promise that the assets of foreign investors and their companies won’t be nationalized,” he said. “If they are nationalized for an unavoidable reason, then we will make compensation for all costs.”

He also stressed that the North has abundant mineral and fisheries resources. With its 2 million educated workforce, who graduated from 300 universities, Oh said North Korea is the best place to make investments in Asia.

He said foreign companies that invest in special economic zones will only have to pay 14 percent corporate income tax and that the tax is even lower for some advanced technology industries. Making investments in the North’s infrastructure will also be tax-free, he said.

The North also held an unprecedented question and answer session. At similar events in the past, the North only made presentations without answering investors’ questions.

A businessman said he was afraid that the North Korean government could confiscate his investments, and Oh assured him that the government guarantees all legal investments by laws.

Oh even used humor to answer one businessman’s question.

“I would like to invest in hospitals,” the businessman said.

“Our [Democratic People’s] Republic of Korea offers free medical services, so it will be hard for you to make money,” Oh joked. “Please reconsider.”

Following Oh’s presentation, Ri Sing-ryol, vice president of the Wonsan District Development General Corporation, unveiled a development plan for the Wonsan-Mount Kumgang international tourism zone. He said the zone has 142 historic sites, 11 white-sand coasts and nine lakes, as well as 676 tourist venues.

The North’s Standing Committee of the Supreme People’s Assembly announced in June an ambitious plan to develop the area as an international tourism zone.

“Now that the Kim Jong-un regime is settled, the North’s top priority is resolving economic hardships and strong economic reform is being pushed forward,” said Jin Jiang, chairman of the Dalian Chapter of the World Federation of Overseas Korea Traders Association.

According to the Donga-Ilbo, the patchy subject of Hyundai Asan’s assets came up:

North Korea requested South Korea to make additional investment in Mount Kumgang and Wonsan areas, claiming that “it never confiscated the South’s property,” which it had forfeited and frozen in April 2010. Oh Eung Kil, general president of Wonsan district development company under the North’s external economy ministry, told South Korean reporters at an informational session on investment in the North in Dalian, Liaoning Province, China on Saturday.

“We did not confiscate Hyundai (Asan)’s asset. We will not confiscate and will wait (going forward). We have waited for long (thus far),” Oh said. “The South’s asset is just in our territory because it is real estate, and the property is registered in Hyundai’s name.”

Notably, citing the North’s foreign investment act providing that Pyongyang does not nationalize foreigners’ asset, Oh said, “Because we cannot afford to continue waiting, blindly trusting the South, we will form ties with investors from various countries. Still, we are not excluding the South. The door is open.”

In April 2010, the North implemented a slew of measures, including forfeiture of the South Korean government’s assets such as a separated family reunion house, freezing of private sector assets including duty-free shops, and deportation of management staff. In 2011, the North enacted the “Mount Kumgang international tourism district act,” and deprived Hyundai Asan of the exclusive right to tourism projects. Hotels and other assets that were owned by Hyundai are currently operated by the North Korean authority. Experts say, “The North’s move is aimed at denying its forfeiture of Hyundai Asan’s assets, which was negatively regarded by foreigners, and displaying situation of improved investment environment.”

Meanwhile, Oh said, “Foreign shipment of unprocessed natural resources has been designated as an additional item subject to restriction of investment into North Korea.” While banning shipment of coals and others without processing in North Korea by foreign investors, the North intends to allow processing of such resources within the Stalinist country. Since the North Korean authority singled out “sale of valuable natural resources at bargain prices as a unpatriotic act” as one of the crimes allegedly committed by Jang Song Thaek who was executed late last year, Pyongyang is believed to have strictly restricted foreign shipment of natural resources.

Here is additional coverage in the Choson Ilbo.

Other posts on the Wonsan-Mt. Kumgang International Tourist Zone here. See the category tab on the right for more.

Read the full stories here:
Pyongyang woos foreign investors
JoongAng Ilbo
Choi Hyung-Kyu
2014-9-22

N.K.: ‘We never confiscated facilities from Hyundai Asan’
Donga-Ilbo
2014-9-22

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Wonsan-Mt. Kumgang International Tourist Zone

Wednesday, June 12th, 2013

UPDATE 4 (2014-10-2): North Korea reveals Wonsan-Mt. Kumgang International Tourism Zone development blueprints (IFES):

North Korea recently released blueprints for a new tourism zone in the Kangwon area, which is designated as the location for the national goal of developing a global tourist attraction. This area has been officially named as the “Wonsan-Mt. Kumgang International Tourism Zone.” The Wonsan District Development Company, an affiliate of North Korea’s Ministry of External Economic Affairs, introduced large-scale development plans for the Wonsan-Tongchon-Mt. Kumgang “tourism belt” to a crowd of over 200 members of the World Federation of Overseas Korean Traders Association (World-OKTA) at an investment forum held in Dalian, China on September 20, 2014.

At the investment forum, North Korean representatives emphasized that the focus city of this project, Wonsan (population 360,000), is merely 1 to 2 hours away from neighbors China and Japan, and is within a three-hour plane ride from over 40 other cities each with populations of over 1 million. The nation anticipates that, provided tourism infrastructure developments are completed according to plan, the Wonsan-Mt. Kumgang International Tourism Zone could potentially attract up to 1 million visitors annually.

North Korea marked the fourth quarter of 2013 with the opening of the Masikryong Ski Resort and the remodeling of the Songdowon International Children’s Union Camp as iconic projects leading the development of the Wonsan-Mt. Kumgang area. Representatives were quoted as saying, “The Masikryong Ski Resort enjoyed incredible popularity during its opening season last winter, attracting more tourists than hotel facilities could accommodate. . . . The Masikryong Ski Resort has become a huge asset to our nation’s tourism industry, capable of entertaining tourists even during the winter off-season.” Increasing hotel and lodging facilities were emphasized as the next most urgent task.

The Masikryong Ski Resort, located 25 kilometers from the city of Wonsan, was introduced as a resort capable of competing in the international market with its 49.6 kilometers of slopes, outdoor ice rink and swimming pools, and hotel accommodations for up to 360 guests. In addition to accommodation facilities for 12,000 people in Wonsan, 7,000 in Tongchon, and 14,000 people in the Mt. Kumgang area, North Korea also revealed plans for new and additional construction of infrastructure facilities in the Wonsan area—including airports, ports, railroads, roads and electricity—and for expansion of recreational facilities such as golf courses and casinos.

More specifically, construction is planned for a large-scale airport in the Kalma (Galma) Peninsula area of Wonsan which will be able to accommodate thousands of passengers per day [Learn more here and here]. Once completed, foreign tourists will be able to visit the Wonsan-Mt. Kumgang zone directly, with no need to pass through Pyongyang. While the most important project is to repair and expand the roadways connecting inner Wonsan with the Masikryong Ski Resort, Ullim Waterfall, Sokwangsa and Mt. Kumgang areas, North Korea also plans to construct or remodel service facilities within inner Wonsan such as hotels, exhibition centers, athletic facilities, and other business and commerce services necessary to satisfying the needs of tourists.

Overseas investors’ requests to visit the Wonsan-Mt. Kumgang International Tourism Zone for inspection and consulting can be processed within ten days, and North Korea is planning to invite potential investors to an on-site investment briefing to be held in April 2015.

UPDATE 3 (2014-7-29): According to the Pyongyang Times:

Thongchon to be developed as tourist zone

A project is to be launched to develop an international tourist zone in Thongchon County, Kangwon Province, which has lots of tourist resources.

The project is part of the development plan for the Wonsan-Mt. Kumgang International Tourist Zone, according to a decree released on June 11 by the Presidium of the Supreme People’s Assembly.

Thongchon County is situated 52 km south of Wonsan, the capital city of Kangwon Province.

The county boasts Chongsokjong—a group of basaltic stone columns which is known as one of the eight scenic beauties in the northeastern part of Korea, four picturesque lakesides, six sand beaches, nine scenic sites and a treatment mud resource of over 3 280 000 cubic metres.

The tourist zone area covers well over 9 000 hectares.

Tourist facilities for sea bathing and boating will be added to Chongsokjong so that visitors could enjoy sightseeing day and night.

Accommodation facilities with a capacity of over 5 600 people are to be built in the area of Lake Tongjong while the Lake Sijung area will turn into a health and treatment hub with an accommodation capacity of over 1 000 people and a sanatorium equipped with health and fitness facilities.

Detailed plans are being mapped up.

UPDATE 2 (2014-6-12): KCNA has formally announced the Wonsan-Mt. Kumgang International Tourist Zone:

Pyongyang, June 12 (KCNA) — The world-class Masikryong Ski Resort and Songdowon International Children’s Camp were successfully built and areas of Wonsan, Ullim Falls, Sokwang Temple and Thongchon are being peculiarly spruced up as cultural recreation grounds for people in Wonsan-Mt. Kumgang area under the wise guidance of the Workers’ Party of Korea. Koreans and world people are showing ever-growing expectation and interest in world famous Mt. Kumgang and other scenic spots. 

The DPRK decided to set up Wonsan-Mt. Kumgang International Tourist Zone in Wonsan-Mt. Kumgang area in Kangwon Province to reenergize the international tour of scenic spots in the area of Wonsan and scenic spots on the east coast now in the process of turning into world famous tourist destinations.

The international tourist zone includes areas of Wonsan, Masikryong Ski Resort, Ullim Falls, Sokwang Temple, Thongchon and Mt. Kumgang.

The Wonsan area comprises some parts of Wonsan City and Anbyon County, the ski resort area includes some parts of Wonsan City and Popdong County, the area of Ullim Falls comprises some parts of Munchon City and Chonnae County, the area of Sokwang Temple includes some parts of Kosan County, the Thongchon area comprises some parts of Thongchon County and the area of Mt. Kumgang includes the international tourist special zone and some parts of Kosong County and Kumgang County.

The DPRK law on Mt. Kumgang International Tourist Special Zone, the law on economic development zone and the laws related to foreign investment are applied to the relevant areas and objects in the Wonsan-Mt. Kumgang International Tourist Zone.

The DPRK decided to increase new tourist destinations, depending on the progress made in the development of the Wonsan-Mt. Kumgang International Tourist Zone and tour.

The Presidium of the DPRK Supreme People’s Assembly promulgated a relevant decree on June 11.

UPDATE 1 (2013-6-27): The JoongAng Ilbo claims to have a North Korean document called “General blueprint for the Wonsan District”. This document has not been made public, so I cannot vouch for its authenticity or content. However, as reported in the paper, the contents seem fairly congruent with established facts.

According to the article:

According to a document entitled “General blueprint for the Wonsan District” obtained exclusively by the JoongAng Ilbo on Tuesday, North Korea is in the process of constructing three special districts in Wonsan: a financial district, an entertainment and sports area and a tourist destination.

The report says Kim is planning to develop Songdowon Beach in Wonsan into a holiday destination for summers and a ski resort on Mount Masik for winters. Mount Masik is about 20 kilometers (12.4 miles) from Wonsan.

Sources in Seoul say the plan to develop the eastern naval city was actually his father’s.

In fact, in the transcript of the 2007 inter-Korean summit that was declassified Monday, Kim told former South Korean President Roh Moo-hyun that “Wonsan is a holiday destination,” rejecting Roh’s proposal to develop the city into an industrial park like the Kaesong Industrial Complex.

“Wonsan is a bay,” Kim said. “Waste comes into the bay and it can’t be properly managed because of Masik Mountain behind the city. So we will shut down all of the factories and shipyards in Wonsan right away.”

Sources said Jong-un might have decided to turn the city into a tourist resort based on the Kumgang resort, which was jointly run with the South but has been closed since July 2008.

“In Wonsan, there are a series of heavy industry factories, such as automobile plants and shipyards,” a source said. “But North Korea has a plan to close the aging factories and turn the city into a resort.”

Sources told the JoongAng Ilbo in March that North Korea appeared to have moved their MiG jet fighters from an airfield in Wonsan to a frontline unit in Kuup. They also reportedly shut down some factories in the city.

Still, the plan obtained by the JoongAng Ilbo didn’t elaborate on the length of construction or the cost.

“North Korea is hoping to lure investment of more than $1 million from a company in Singapore [for the project],” the source said. “Completion of the project relies on whether they attract foreign investment.”

North Korea has already started construction at Mount Masik, starting with a ski slope, three lifts, an office for ski rentals and a hotel. In phase two, it will build a larger slope, a gas station and a golf course.

ORIGINAL POST (2012-2-24): North Korea planning special economic zone in Wonsan and Mt. Kumgang regions
Institute for Far Eastern Studies (IFES)

North Korea announced plans to develop a special tourism zone in the Mount Kumgang region and recently established detailed plans to connect five countries in the Northeast Asian region by land, sea and air routes. In particular, it specified construction plans for the Tongchon Special Economic Zone (SEZ) in Tongchon County of Kangwon (Gangwon) Province.

Currently, there are four SEZs in North Korea: Rajin-Sonbong (Rason) SEZ, Hwanggumpyong SEZ, the Kaesong Industrial Complex, and Mt. Kumgang Tourism Zone. Tongchon will be a special case where a free economic trade zone will be located within the Mt. Kumgang Tourism Zone linking the areas of Wonsan and Mt. Kumgang.

Growing attention is being paid to the “Tongchon Special Economic Zone in the Mt. Kumgang Tourism Zone.” Industrial service facilities will be built in the Tongchon SEZ along the coastline including, “comprehensive industrial, merchandise, and communication service center zone,” “international multipurpose building zone,” “international finance, trade, and business center,” and a golf course.

Construction inland is currently underway for regular and high-tech industrial complexes in the following areas: IT, LCD, and electronics; home electronics; automobile; new energy and environmental protection; and biomedical and breeding.

Tongchon Port is equipped to accommodate 100,000-ton vessels and there are plans of constructing beaches, a marine park, hot springs, and luxury hotels, and vacation homes in the vicinity.

According to a five-page blueprint for the “Choson Wonsan-Mt. Kumgang Development Plan” (in Chinese), North Korea has set 10 million tourists per year as its goal and is preparing to attract large investment of over 10 billion USD over the next ten years.

Although it is unclear who has prepared the blueprint, it is most likely that North Korea has prepared the plan in Chinese to promote the SEZ internationally. North Korea recently distributed briefing materials in Chinese at the 7th China Jilin-Northeast Asia Investment and Trade Expo (JNIT), which was held last September.

The report included plans of constructing Wonsan International Airport at an estimated cost of 150 million USD.

The ten-year development plan is further divided into three periods: October 2011 to December 2013 (short-term); 2014 to 2016 (mid-term); and 2017 to 2020 (long-term).

In addition, the report included the detailed plans of road and facility renovations. The Pyongyang-Wonsan-Mt. Kumgang highway that stretches 310 km will be renovated with investments worth around 150 million USD. A four-lane highway will also be added. The seaside areas of Wonsan and Mt. Kumgang and the tourism zone will be reconstructed with major facilities and electricity worth 10 billion USD and a new town is also being designed to accommodate a population between 800,000 and 1 million people.

The report “Establishment of International Travel between Mt. Kumgang and Five Countries in Northeast Asia” included details of 18 air routes from Beijing, Changchun, and Shenyang to Wonsan International Airport; 8 sea routes to Nampo Port and the routes from South Korea, Japan, Russia, and the Northern Pacific rim using the port in Mt. Kumgang. In addition, a land route connecting Dandong of China to Mt. Kumgang is also included in the plan, via Shinuiju.

It is designed to develop Mt. Kumgang into an international tourism zone making it accessible by land, sea, and air transportation to South Korea, China, Russia, and Japan.

Specifically, Niigata Port of Japan, Vladivostok Port of Russia, and Jeju, Busan, and Sokcho Ports of South Korea were mentioned as the major ports for the sea travel to North Korea.

Travelers from China will be connected to Mt. Kumgang by rail (from Wonsan to Mt. Kumgang) and by sea (from Rajin-Sonbong Port to Mt. Kumgang Port).

Interestingly, no land route was designated for travel from South Korea. The previously used Donghae Line to travel from Kosung to Mt. Kumgang by road and railroad was omitted from the plan.

Additional information:

1. Check out previous posts on the DPRK’s “Law on Economic Development Zones“.

2. You can read about the DPRK’s plans for a new Wonsan International Airport in this article and in this article with James Pearson.

Read the full story here:
North is building ski, beach resorts in Wonsan
JoongAng Daily
2013-6-27

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