North Korean Economy Watch

UPDATE 1:  South Korea’s Science and Technology Policy Initiative (STPI) did some analysis of the DPRK’s “Red Star” (붉은 별) operating system.  A PDF of the report can be found here (in Korean).  STPI has a couple of articles here and here in Korean.

The Korea Times reports on the study’s findings (in English):

According to researchers at South Korea’s Science and Technology Policy Institute (STEPI), North Korea’s Linux-based “RED Star” software is mainly designed to monitor the Web behavior of its citizens and control information made available to them.

However, the computer operating system does represent North Korean efforts to advance its computer technology, which lags as a result of the country’s isolation, relying on Linux and other open-source software, said Kim Jong-seon, a STEPI researcher.

“The fact that North Korea established a computer operating system to control the flow of information within the country is meaningful in itself. By improving its ability to develop Linux-based programs, North Korea seems to be looking to expand the use of its computer programs in more areas,” he said.

“There hasn’t been any research on North Korean computer operating systems and other software, and we need to assess the level of technology as well as the attempts to overcome the years of isolation through open source programs.”

Prior to developing Red Star in 2002, the North Korean government relied on the English version of Microsoft Windows, according to STEPI.

An analysis of Red Start 1.1, the version used around April 2008, suggests that the North Korean operating system is designed to provide a desktop environment similar to that of Microsoft Windows.

North Korea’s Korea Computer Center (KCC), which developed the software, has been consistently providing updated versions of the operating system, STEPI said.

Red Star’s programs include the “Uri 2.0” office application, based on the Linux Open Office, a “Naenara” (my country) Web browser, which is a variation of Firefox, a file-sharing program, and also a program to enable selected Microsoft applications.

One of the key features of Red Star is security-enhanced Linux (SELinux), which enables mandatory access control policies that limit user programs and systems servers to the minimum amount of freedom they require to do their jobs, STEPI said.

It’s hard to imagine Red Star, which supports only the Korean language, being used anywhere outside of North Korea, considering the complicated Web of local requirements, lack of compatibility and dearth of applications.

ORIGINAL POST: Below is an interesting article on the DPRK’s Linux-based operating system: Red Star.

Not only does North Korea have “its own Internet” – a national information network independent from the US-based Internet regulator – it also has an operating system, developed under by order of Kim Jong-il.

Russian student Mikhail, who studies in the Kim Il-sung University and writes a blog from the Russian embassy in Pyongyang, has recently purchased the Red Star Operating System (OS) and tested it. Courtesy of Mikhail, RT gives you an opportunity to take glimpse at IT life of world’s most closed country.

The Red Star is a Linux-based OS developed by North Korean IT specialists last year. Readme file, which goes with the install disc, even gives a quote from Kim Jong-il about how important for DPRK is to have its own Linux-based operating system compatible with Korean traditions.

The version tested by Mikhail is the latest build, which, according to locals, still needs polishing. The OS is not popular (yet?), with most people who need one preferring Windows XP and Windows Vista.

Mikhail bought his copy for about $5 in an information center 5 minutes walk from the university dorm. Interestingly, no permission is required for it, which is probably explained by the regulation of the sale of computers.

The system has server and client versions, and apps can be bought separately at twice the price.

Installation of the Red Star is possible straight from the bootable disk, from hard drive, or via the net. The whole process takes 10 to 15 minutes. While the files are copied, the user is shown tips like in a Windows installation, saying that the system “is now faster and simpler”. Unlike Windows, you will not be allowed to select your system language: only Korean is available.

Then the system starts. Here is the logo on the start screen:

User selection screen is standard. User “root” is the default one, while user “Kim” was created by Mikhail. The picture is that of a popular Korean cartoon character.

Red Star desktop.

Red Star cannot be called modest in terms of system requirements. You will need at least a Pentium III 800 Mhz with 256 Mb RAM and astounding 3Gb hard drive space!

The desktop is pretty much standard, with a My Computer icon, a trash bin and a link to a system tour. The red star in bottom left corner opens the system menu, while icons next to it are the quick launch panel. Notice the clock on the left – the year is 99th of the Juche Idea, the official North Korean ideology.

My Computer launches the file browser. Here is how it looks:

Standard applications for the system are low in number: web-browser “My Country” (which is actually Firefox in disguise), a simple word processor, a picture viewer, a pdf reader, players for audio and video files, a file archiver, a virtual disk manager and stuff like calculator or symbol table. All the applications except the web-browser are named after their functionality.

The OS has its own keyboard layouts for Korean (does not match the Windows version), English, Russian, Chinese and Japanese.

There are also four games: Minesweeper, Klondike solitaire, Jawbreaker and a logic game where the player builds correct chemical formulae.

Applications on the second disk included: service programs for the client version of Red Star, which strictly speaking should have been on the first disk, an office app suite “We”, similar to OpenOffice and another similar software suite, a program for recording CD/DVD, an e-mail client “Pigeon” (after the mail-delivering bird), Janggi board game (Korean chess), a fax communication tool, antivirus “Woodpecker”, notebook “My Comrade”, a graphics editing program, firewall “Pyongyang Fortress”, an engineer’s calculator and a Windows emulator.

The Application Manager shown here is also used for system updates.

Naenara web browser was successfully recognized by Firefox website, which offered downloads of the latest Korean version of the browser for Linux i686. Note that the default search engine is not Google but Naenara BBS. Since Mikhail was tinkering with the system in the embassy, where the Korean national network is not available, he had no opportunity to do some test searches.

Mikhail did test the antivirus, however, which (along with the firewall) was built from scratch by North Korean coders rather than re-written from an open source applications. It did well at finding and killing the viruses offered to it.

The Windows emulator worked well too. Mikhail launched Warcraft 3, and the game worked smoothly. So did the dictionary software and a digital library available on the disk.

What is interesting for a North Korean product is the near-total absence of propaganda – unless you treat the word “red” in its name as an instance.

Read the full story here:
North Korea’s “secret cyber-weapon”: brand new Red Star OS
rt.com
3/1/010

Here is the original Russian source.

According to the AFP:

A South Korean aid group said Tuesday it would send 300 tons of flour and other supplies to needy North Koreans this week amid reports that dire food shortages are worsening.

A ship carrying 60 containers of food, daily supplies and educational needs such as pencils will leave the western port of Incheon Saturday, said the Join Together Society.

“The shipment will benefit some 12,000 marginalised people at 50 orphanages and other institutions across the country,” society spokesman Seo Dong-Woo told AFP.

It includes 300 tons of wheat flour, 360,000 packs of soy milk and other foodstuffs, enough to feed 12,000 people for three months, he said, declining to disclose the cost.

South Korean officials and aid groups say the already severe food shortages are expected to worsen this year after a poor grain harvest in 2009.

A bungled currency revaluation last November has reportedly played havoc with distribution networks, aggravating food shortages and sparking inflation.

North Korea has relied on foreign aid to feed its people since a devastating famine in the 1990s killed hundreds of thousands.

Overseas donations for programmes run by the UN’s World Food Programme and others have fallen sharply because of the standoff over the North’s nuclear and missile programmes. Pyongyang has also rejected some aid.

South Korea’s government has since 2008 suspended annual shipments of fertiliser and food to the North amid rising tensions, but private aid groups continue to send shipments.

Read the full story here:
S.Korean aid group to send food to North
Associated Free Press
4/6/2010

Koryo Tours brings some exciting news for those seeking to visit the DPRK–Hamhung will now be open to tourism–even US tourists. Sign up for the Koryo Tours newsletter on their web page here.

According to the newsletter:

1. Democratic People’s Republic of Korea (DPRK) drops restrictions on US tourists.
Until recently, American tourists had only been allowed into North Korea during the Mass Games for a maximum 4-night stay. Fortunately in 2010, everything has changed – we can now welcome US citizens on both group and independent tours all year around (we took US citizens on our group tours in February and March, and can confirm these changes are in effect). Check out our complete list of tours and travel options at and see what’s new!

2. Hamhung city to open to tourists
We at Koryo Tours have long prided ourselves on being the only company allowed to offer original DPRK programming, and 2010 has already proven to be a windfall. After years of continuous efforts, we are thrilled to announce our brand-new tour to Hamhung, a major industrial city on Korea’s east coast. Those on our August 7 – 16/17 Liberation Long Day Tour will be the first Western tourists to ever visit this area (again, US citizens are welcome). Our new itinerary adds a two-night Hamhung stay to the already packed ten-night schedule that includes trips to Mount Paekdu, Pyongyang, Kaesong, and other areas). Details are still in flux, but as with everywhere else, we will maximise interaction with locals and see as much as time allows. Plan on staying one night in Hamhung proper and one night at the brand new Majon beach resort, where again, no Westerners have ever been. We are now taking applications from anyone who wants to be among the first tourists in history to go to this major city and its stunning surrounding areas on either a group or independent tour. As for our returning travellers we offer special discounts, so if you were looking for an excuse to go back, this may be the trip of a lifetime for you.

3. Rajin-Sonbong/Chongjin/Vladivostok Tour
Even among the select travellers who have ventured into North Korea, Rajin-Sonbong  (Rason) remains a mystery…a remote area (even by DPRK standards) that shares a northern border with China and Russia and not possible to enter from North Korea proper.  Rason sees almost no tourists at all (literally not one western tourist in 2009!) but keeping up our tradition of breaking new ground, Koryo is preparing a 3-country, 3-time zone, 3-language tour. We start in Yanji, part of China’s Korean autonomous region, then head down to the North Korean coastal city of Chongjin, and  cross overland to Mt. Chilbo (you will be the first Western tourists to arrive there by land). After that, we head back to the free-trade zone and ride the international rail, bus and boat into Russia. We finish our tour in the jewel of Russia’s Far East, the previously closed city of Vladivostok, where travellers can either return to Beijing, fly on to Tokyo or Seoul, or even hop on the Trans-Siberian and keep going . This tour is slated for July; details are still being hammered out, but if you’re interested in seeing these mysterious, fascinating places that are as different as they are unforgettable, please contact us at info@koryotours.com

4. Centre Forward
Koryo Tours has always been more than a travel company; among other projects, we have a long history of filmmaking in the DPRK. While preparing to shoot our latest feature film, we obtained the rights to a North Korea football (soccer if you like!) movie, made in 1978 and never exported abroad – until now. Featuring DPRK film star Kim Chol, Centre Forward tells the story of a young player who reaches the first team only to see the squad hit with a crisis of confidence. Will they be able to get back to the top of their game? Remastered and subtitled with a DVD extra that interviews Rim Jong Sun the 1966 football hero who was consulted on the film. Check out the trailer at Youtube option or at  Youku option.

(Please pass this link on so we can get some viral action going!) In a World Cup year that features North Korea for the first time since 1966, this is a topical and fascinating glimpse into the sporting culture of an unknown country. For film freaks, sports fans and DPRK watchers everywhere, this is a must-see! The DVD is available for purchase at 200rmb (20EUROs) and ready in June – please contact  info@koryogroup.com for more information.

5. Korea vs. Japan Women’s Football
On May 23rd Korea DPR take on Japan in a qualifying match for the 2011 Women’s World Cup. The DPRK ladies are perennial challengers for football’s highest honours, so this should be a good game against regional (and historical) rivals Japan. Come with Koryo Tours to Pyongyang and cheer the team along with the home crowd! For information, see:
http://www.koryogroup.com/travel_NEWItinerary_0.php

6. Turkmenistan May 2010 Tour
In continuing our tradition of trips to weird and wonderful places, we are in our fifth year of tours to the Republic of Turkmenistan (next tour May 11 – 18), with an especially exciting programme. See stunning sites such as the capital city of Ashgabat (Pyongyang meets Las Vegas!) as well as ancient fortresses, giant bazaars, mega-mosques and horse racing, camp in the desert next to a giant flaming gas crater, visit the Caspian sea port of Turkmenbashi and travel by bus, plane, boat, and even horse and camel to get there. Join us on this memorable trip to a remarkable place. The ininerary is here.
[NKeconWatch: I went on this tour and recommend it!]

7. Amazing Mass Games Photos Available: Link to the website
Koryo Tours helped photographer Werner Kranwetvogel get unprecedented access to the Mass Games- absolutely sublime images- on his last trip Werner had access to the ground level but on return to Germany found his lens had a fault…and back he came to Pyongyang…but his images are testament to his drive.

Institute for Far Eastern Studies
NK Brief No. 10-04-05-1
4/5/2010

It has recently been verified that following the currency reforms at the end of last year, North Korea passed 11 laws revising and reforming the system of government control over the economy. Among these measures is a law banning the black market sales of grain.

The North’s food administration law, revised last November 3, clearly bans the black market trade and smuggling of grains, and sets the punishment for such activities as the confiscation of the grains in question. In addition, an order was passed down stating that when food supplies are rationed to a labor management office, they are to be distributed in accordance with a worker’s efforts, position, and productivity. On the same day, a new agricultural law was passed that stated if organizations and groups that were granted land for private plots failed to meet state-set harvest quotas, the plots could be confiscated.

In November and December of last year, North Korea also enacted the Real Estate Management Law, Goods Consumption Standard Law, Construction Materials Import Law, Import/Export Country of Origin Law, Waterworks Law, Labor Quantity Law, Farm Law, Sewer System Law, and the Mariner Law. Among these, the Labor Quantity Law sets the number of laborers per hourly production demands, stipulates labor contracts, and determines remuneration in accordance with worker performance. This law is unprecedented in that it allows the responsible organization or business managers or supervisors administrative and even penal authority by giving them power over labor evaluations and payment.

The Farm Law allows each farm to retain some of its harvest, and making it responsible for selling its goods to the state, while on the other hand, forbidding illegal agricultural production. This law, by strengthening state control over agricultural goods, appears to be an effort to restart the Public Distribution System.

The Real Estate Law, a mechanism to collect user fees, stipulates, “Real estate cannot be lent or left to different individuals, groups, organizations or enterprises without the permission of the applicable authority.” Along with this, the law on consumption includes a clause that links consumption of particular goods with those goods’ production in order to prevent waste, as well as a clause designed to reduce or eliminate the use of imported goods.

The law on the import of construction materials gives the government leverage in all aspects of such activity, including planning, processing, transfer, inspection, construction and testing. In addition, if someone from an enterprise or organization imports construction goods without government authorization, changes an import plan, distributes, transports, or wastes construction wares, he or she is subject to administrative punishment.

Ultimately, economic legislation enacted or revised after the currency reform appears to be aimed at strengthening the planned economic system while increasing government control over public revenue and encouraging efforts to recover without outside assistance.

Scott Snyder wrote a good piece on recent developents in Rason fo rthe Jamestown Foundation’s China Brief:

The Rajin-Sonbong region in North Korea (also known as Rason following a 2004 administrative reorganization by central authorities) is an underdeveloped backwater near the far northeastern tip of the Korean peninsula bordering Jilin province of China and Primorsky Krai of Russia. Although the area is far from the nerve center of the North Korean regime, Pyongyang, Rajin-Sonbong has strategic significance as the northern-most year-round ice free port in Northeast Asia and therefore is an attractive geostrategic transit point for the shipment of goods to landlocked Northeastern China and the Russian Far East. For this reason, recent reports of new Russian and Chinese investment deals following a rare personal visit by North Korea’s supreme leader, Kim Jong Il, to Rajin-Sonbong in December of last year merit closer scrutiny.

Rajin-Sonbong has been the focal point of periodic efforts by Pyongyang to experiment with economic reforms since it named the area a free economic trade zone in late 1991. At that time, the Rajin port was an essential piece of a UN-sponsored regional development effort known as the Tumen River Area Development Project (TRADP)—which encompasses areas within China, Mongolia, Russia and South Korea—but the project never attracted sufficient international investment to take off. The spotlight returned to Rajin-Sonbong briefly in 1996 when North Korea sponsored an investor forum there in an attempt to stir up interest in a revamped set of investment laws for the region, but few investors came and North Korea’s famine later that year diverted attention away from the effort. 

Read the rest of this entry »

Daily NK
Yoo Gwan Hee
4/5/2010

In North Korea, April 1st is commemorated as “Tax Abolition Day.” Ever since the law, “On Completely Abolishing Taxes,” was ratified through the Supreme People’s Assembly on March 21, 1974, North Korea has claimed both within and without to be the only country in the world that does not collect taxes. However, their claim is only for propaganda purposes, for North Koreans labor under a list of state-imposed taxes and duties which grows longer day by day.

Take the example of electricity. Power distribution center members in every city and town visit households in their region alongside the chairperson of the local People’s Unit, whereupon they collect electricity payments according to the number of electric bulbs and electronic equipment therein. This process is done quarterly. In the late 1990s, the quarterly electricity bill per household in Pyongyang was about 20 won. To reduce costs, of course there were people who removed electric bulbs and hid electronic equipment such as irons whenever the power distribution center had workers in their neighborhood.

Since the 2002 economic management reforms were announced on July 1, however, electricity bills have increased greatly. For families living in luxurious apartments in the Jung-district of Pyongyang with televisions, refrigerators and electric fans, households pay as much as 800 or 900 won per quarter.

After the so-called July 1 Reform Measure, troubles between the power distribution center and the people increased. The North Korean people were understandably displeased with the power distribution center, for it was trying to collect money for a utility whose availability was and remains far from regular.

Next, let’s look at reserve food and organizational expenses. North Korea has nine levels of food distribution. From 100g to 900g is supposed to be distributed per day depending on the level, but for the purpose of stocking up reserves, up to 100g is collected from the people instead. Additionally, people are forced to submit approximately two percent of their salary for organizational expenses.

Next, to support for the construction of historical sites. North Korea emphasizes the “voluntary participation” of the North Korean people under the Party apparatus and workers’ organizations. Construction of historical sites for the idolization of Kim Il Sung and Kim Jong Il is frequently organized. Also, officials often collect money from people in order to support those construction projects of which the cabinet is in charge.

Then there is free education. It is officially called “free education,” but school administration expenses are all covered by students and parents. Students have to collect waste paper, waste iron and waste rubber, or raise rabbits and submit the pelts to school. After 2000, there have even been students engaging in business around markets in order to provide supplies for submission to the school.

Onwards, then, to market stands rental fees. After the July 1 Reform Measure, the amount of tax collected at markets suddenly increased. Market stand rental fees already existed before the July 1 Reform Measure but, after 2002, market management centers started collecting market management tax as well, basing it on each product sold. Noodle sellers paid ten won per day, while soybean curd sellers paid three won.

Market stand rental fees became more systematic as well after general markets opened in late 2003. According to the product being sold and daily sales figures, market management centers charged rental fees. In present-day Nammun Market, Hoiryeong, the stand rental fee is said to have been fixed at 100 won per month.

Separate from the stand rental fee, monthly tax is charged on products for sale in the markets. For example, Nammun merchants pay additional taxes of 300 won for industrial goods, 180 won for pork, 150 for cigarettes, alcoholic drinks and fish, 120 won for food and 100 won for general merchandise.

So, while the North Korean media deliver their diet of propaganda promoting North Korea as the world’s only taxless country, be wise to the reality of the North Korean people suffering under an increasing tax burden.

Ugh…I really don’t know what to say at this point.  Depressing.

According to the Associated Press (via Forbes):

“In the early days immediately after the currency change, market prices were not fixed, so markets were closed for some days,” Ri Ki Song, a professor at the Institute of Economy at North Korea’s Academy of Social Sciences, told APTN. “But now all markets are open, and people are buying daily necessities in the markets.”

Ri was provided by the North’s government in response to a request to talk to an official who could explain its economic situation. It is very rare for North Korean officials to discuss such policies with foreign media.

Impoverished yet nuclear-armed North Korea has in recent years allowed some free markets for food and consumer items, while others not sanctioned by the state have also sprung up as the public copes with declining living standards and food shortages.

“Outside Korea, many people have been talking loudly about problems that occurred during the change of currency in our country, but there wasn’t any of the social disorder that they have been talking about,” Ri said. “Now the situation is being stabilized overall, and the economy is functioning well, thanks to some of the measures that have been taken.”

Ri insisted the government’s objective is to phase out markets completely and rely on a state-controlled network of outlets to supply its citizens.

Read the full article here.

There is no shortage of posts on the DPRK government’s growing antagonism towards markets in the last several years. 

The Heritage Foundation reminds us all that the DPRK has languished at the bottom of the international Index of Economic Freedom for years and asks, “how low can you go?”

The Daily NK tells us that times are pretty tough for many in the DPRK right now:

A source from North Hamkyung Province confirmed as much yesterday in a telephone interview with The Daily NK, saying, “Lower class people, who live from hand to mouth through the markets, have been suffering from the most serious difficulties since the redenomination.”

This is because for around two months the markets were shut down completely, and even after the markets reopened market price ceilings were adopted, so small traders and those who lived by relying on the markets were among those hit hardest, according to the source.

“Those running street-stands, alley market traders, porters and others who live by clinging to the markets mostly lost their money in the redenomination. Although markets have started to get animated again, these people are still facing difficulties due to a lack of seed money.”

The source added, “The food situation is actually dire. Despite the authorities’ program of releasing relief rice to poor households, in reality real distribution for them is not that helpful.” This is because any such state relief program is temporary, and cannot address the poorer classes’ fundamental problems.

He emphasized, “Now, people have started worrying about spring poverty, which comes every year in around May or June. In Onsung, Hoiryeong and Musan in North Hamkyung Province, the rice price has dropped to around 400 won per kilogram, but there are still so many people who cannot even afford to eat corn.”

The source gave the example of one of his acquaintances, whom he called Mr. Lee. He used to live by trading secondhand products in Musan.

Pre-redenomination, Mr. Lee managed around 200,000~300,000 won (in old value) of assets, dealing parts and used bicycle tires with his wife. However, following the currency redenomination of November 30, 2009, he was left with 1,900 won of new currency.

To make matters worse, he had only 100 kilograms of corn, which he had obtained in October. His family has been eking out that corn over the last few months.

Since February, the Musan Market resumed operations, but since prices have been unstable, not many people have wanted to buy. Recently Mr. Lee was forced to sell his one-room house to realize some capital.

As the source concluded, “The most terrible victims of the currency redenomination, market closures and inflation are lower class people in the cities. Nowadays, city residents feel lucky when they have just coarse corn.”

“In May or June, when the spring poverty period begins, the situation of the urban poor class will become even more terrible.”

Here is a satellite image of the Musan Market.

According to the Economic Times of India:

Pramod Mittal, the younger sibling of steel tycoon LN Mittal and head of Global Steel Holdings, is negotiating with the North Korean government for a stake in the country’s Musan Iron Ore mines, estimated to hold reserves of more than seven billion tonnes. The move by Global Steel is aimed more at accessing the mineral resource, as the ore is in sharp demand with steelmakers expanding capacity and iron ore miners moving to a quarterly price regime to meet growing markets in Asia and Africa.

Mr Mittal, who is chairman of Global Steel, a closely-held company of the Mohan Lal Mittal family, had visited Pyongyang last week to talk to senior government officials to work out the modalities of a share of Musan’s reserves. The ML Mittal family consists of elder son LN Mittal, Pramod Mittal and younger brother Vinod Mittal, who looks after the Mumbai-based Ispat Industries. When contacted, Pramod Mittal declined to comment. “Our visit to North Korea is to further business interests. We are not looking for any stake in Musan,” he told ET .

According to people familiar with the development, Global Steel could likely be negotiating with Pyongyang for development rights to Musan for a fixed peiod, where Global Steel would do the mining and get to buy an agreed portion of the reserves. Typically, in the mining industry, such development rights are for a long term period of 20 to 50 years.

Global Steel, which is registered in the tax haven Isle of Man, has steelmaking operations in Bulgaria and Nigeria and a 20-year management contract to operate Zimbabwe Iron & Steel. Although Global Steel has a small steelmaking capacity of just more than 2 million tonnes, iron ore from Musan would not be used for Global Steel’s operations. Global Steel also owns two coal blocks in Mozambique where ArcelorMittal, controlled by elder brother LN Mittal, also has coal mines. While the Mittal family has maintained that Global Steel has no link to ArcelorMittal, the world’s largest steel company has been reportedly keen on Global Steel’s assets.

Two years ago, North Korea had granted development rights on Musan to China’s Tonghua Iron & Steel Group for a period of 50 years. However, Pyongyang recently terminated that agreement without offering any reason. People connected with the issue said Global Steel is negotiating with Musan on the amount of investment needed for developing the mines and also on building infrastructure, which is integral to any mining activity.

While the talks with Pyongyang is at an initial stage, under the previous agreement with Tonghua, the Chinese company had reportedly agreed to put in about 7 billion yuan, and had also planned to produce 10 million tonnes of iron ore each year. Of the total investment, about $240 million was for building roads and railways from Musan to Tonghua in China. The Musan iron ore mines are close to the Chinese border. The secretive North Korean government has recently been sending out feelers to global mining companies for developing its vast mineral deposits, said to contain one of the world’s largest reserves, closely rivalling Brazil.

The Musan Mine is the DPRK’s largest and satellite imagery of it can be seen here.

Here is a story about Tonghua’s Musan deal. 

Read the full story here:
Pramod Mittal eyes stake in North Korea’s Musan mines
The Economic Times
MV Ramsurya
4/5/2010

Jin Hualin, dean of the College of Economics and Management at Yanbian University, talks about Chinese investment in Rason in China’s Global Times.  Here is an excerpt:

GT: If China does continue to rent Rajin harbor for another 10 years, what will the effects be?

Jin: China has reached an agreement to rent a pier at Rajin Port for another decade. A Dalian-based Chinese company has invested 26 million yuan ($3.8 million) in the reconstruction of Rajin Port No.1 Pier. Park also said that China may enjoy more favorable conditions there, such as more berths.

I think Chinese companies’ participation is good for promoting the North Korean economy and building logistical infrastructure in the area, which is beneficial to China, North Korea and the Northeast Asian countries.

When the Sino-Mongolia route is finished, raw materials and natural resources from Mongolia can be shipped to Japan and South Korea via Rajin harbor, and then China’s northeastern regions and North Korea can both benefit.

GT: What should China do to promote Northeast Asian cooperation and devel-opment?

Jin: I suggest Chinese governments at all levels consider the following issues. They should accelerate trade and tourism and build cooperation on logistics, and support Chinese companies going global and investing in North Korea.

Actually, China now has many companies capable of investing abroad. The point is foreign countries’ investment environment.

We should strengthen cooperation on education with North Korean universities and colleges, sending students to study there and exploring research in new areas together.

We can also strengthen regional cooperation. We can designate China’s Hunchun city and North Korea’s Rason city as pilot cities and permit China’s commercial banks to open yuan-based accounts in Rason’s commercial banks.

Relations between Northeast Asian countries are subtle and complicated because of geopolitical contradictions, different political systems, the influence of the Cold War, historical issues, territorial disputes and sentiments caused by historical and territorial issues.

Mutual distrust fundamentally hinders cooperation. China needs to take the responsibility to promote regional cooperation and make it institutionalized and legally guaranteed as soon as possible.

GT: How do you evaluate the political and economic risks for Chinese companies going into North Korea? What advantages do Chinese companies have?

Jin: There are always political and economic risks involved in trade between different countries. The first major solution is to establish a mutual investment guarantee agreement, so that the two countries’ economic cooperation will be protected legally.

We hope that North Korea can keep the stability and consistency of its policies and issue development policies that is in line with international conventions. As long as North Korea adopts consistent policies, Chinese companies won’t encounter great political and economic risks there.

China and North Korea are believed to enjoy good mutual trust. China has experience from its reform and opening-up and plenty of investment capability. North Korea has a good educational foundation, low labor costs, and rich natural resources.

Chinese companies are active participants in investing in North Korea and I believe they’ll do well there.

Read the full interview here. Hat tip to Adam.

The guys at NOKO Jeans did an interview discussing the process of launching a business venture in the DPRK.  Read the interview here.

The group also posted some very nice pictures of their train ride to Pyongayng here.  The whole set is worth checking out, but here is one that I liked:

And who says entrepreneurship is dead in Europe?  One of the guys on the team put his images into a photo album which he is selling on line here.