North Korean Economy Watch

According to the Choson Ilbo:

A panel of experts says the Unification Ministry has a cavalier attitude to South Korean companies doing business with North Korea. The panel, led by Kim Young-yoon of the Korea Institute for National Unification, tried to find out how many firms there are and what they do.

The experts say that according to ministry figures, 1,017 South Korean companies are doing business in the joint Korean Kaesong Industrial Complex, Mt. Kumgang, Pyongyang, as well as Nampo, Haeju, Rajin and Sinuiju. But the ministry does not even have contact numbers for 188 of those companies, and the phone numbers of 259 are wrong, meaning it only has accurate numbers for 570.

That begs the question whether the tally is even remotely accurate. “Even if businesses have an office in North Korea, most of them are headquartered here,” said one of the experts. “So it shouldn’t be very difficult to assess the status of these businesses, and inaccurate statistics show that the ministry has not done its job properly.”

The probe was prompted by a request from some firms doing business with North Korea to the National Assembly’s Foreign Affairs and Unification Committee to review business in the North and give them a clear picture after the government halted all trade with the North except the Kaesong complex on May 24 last year.

The panel had planned to publish a white paper on May 24 this year, but apparently scrapped the idea due to the lack of basic information.

A response from a Unification Ministry official only adds to the confusion. “We gave them a list of 720 companies, including 584 that are involved in trade with North Korea, 122 that are based in the Kaesong Industrial Complex and 20 in Mt. Kumgang,” he said. “I don’t know where they got the 1,017 figure from.”

Read the full story here:
Ministry ‘Confused’ Over Firms Doing Business with N.Korea
Choson Ilbo
2011-5-16

Last Thursday the Committee for Human Rights in North Korea (HRNK) issued a new report on the DPRK’s history of abducting foreign nationals.  Marcus Noland, who is on the HRNK board, has posted a PDF of the report at his blog here.

Some time ago, HRNK approached me to locate some facilities in the DPRK for this report.  I was sent a hand drawn map that was published in Megumi Yao‘s memoirs as well as two maps from Ahn Myong Jin‘s memoirs.  I used these maps to locate the following facilities in the DPRK:

Kim Jong-il Political Military University (39.138379°, 125.749988°)

Housing for abducted Koreans and Japanese (39.161151°, 125.780365°)

Japanese Revolution Town — Old home of the Japanese Red Army (39.078108°, 125.942814°)

You can read more about these places in the HRNK report.

I had thought I was doing (mostly) original work, but we discovered last week that a Japanese researcher named Osamu Eya located these places (and more) several years ago using these maps.  We both, however, independently identified the same locations.

UPDATE 2 (2011-5-12): Zanu-PF has decided to re-erect the Nkomo statue.  According to the Zimdiaspora:

The controversial statue of the late vice president Joshua Mqabuko Nyongolo Nkomo will be re-erected in Bulawayo’s city centre after Zanu PF bigwigs agreed to put up the giant North Korean designed effigy.

Zanu PF officials said President Robert Mugabe appointed Environment Minister Francis Nhema who is Nkomo’s son-in-law to be in charge of the raising of statue along Main Street.

The statue was removed last year following widespread outcry by the Nkomo family but latest details show that the family has backtracked following Nhema’s persuasion. The soft-spoken Nhema is married to Louise Sehlule, one of the late nationalist’s daughters.

In the past two months, sources said Nhema, who chairs the Joshua Nkomo Foundation, has been making frequent visits to Bulawayo where he also met senior politicians to lobby for the re-erection of the statue, which drew anger from the Nkomo and Bulawayo community because it was made in North Korea—a country known for training the notorious 5th Brigade soldiers who killed over 20 000 civilians, raping 60,000 women.

Nhema met vice president John Nkomo, politburo members, Joshua Malinga, Eunice Sandi and Angeline Masuku as he drummed up support for the statue to be re-erected.

After the uprooting of the statue, it was later agreed that it would be put at the Joshua Mqabuko Nkomo airport on the outskirts of Bulawayo but there were reservations that the public would not be able to view it since it will be kilometers away.

“It’s a matter of time before the statue is put back along Main Street. Zanu PF doesn’t want to be seen as failures by conceding to pressure from the Nkomo family and the people of Matabeleland,” said a top Zanu PF official.

The latest revelation to re-erect the statue comes against a backdrop of efforts by former Zipra commanders to block the move, saying Mugabe, 87, should first return Zipra buildings to its rightful owners. Some of the buildings include Magnet House, which houses the dreaded CIOs in Bulawayo.

Although Nhema was not answering his mobile phone Thursday, a politburo meeting Wednesday vowed that the statue would be erected again.

UPDATE 1 (2011-1-23): The statue was mentioned in this New York Times article

ORIGINAL  POST (2010-9-17): According to MonstersandCritics.com:

Public anger over a decision to allow a North Korean firm to make a statue of a Zimbabwean freedom fighter resulted in government plans to take it down before its unveiling, according to reports Thursday.

The three-metre bronze statue of Joshua Nkomo had been under threat by the family of the deceased leader of the Ndebele ethnic group. They had vowed to tear it down, angered that the Zimbabwean subsidiary of a North Korean company had created it.

In the mid-1980s, North Korean military instructors, invited by President Robert Mugabe, trained a brigade that went on to kill thousands of Ndebele citizens during a low-intensity insurgency.

‘It was highly insensitive of the government to have hired the North Koreans to produce the statue without consulting Nkomo’s family or the people of Matabeleland,’ said political analyst Grace Mutandwa. ‘Let’s just say the North Koreans are not the Ndebele’s favourite people.’

After its completion, the statue remained covered by a black cloth on a plinth until Home Affairs Minister Kembo Mohadi removed the shroud Wednesday, announcing plans to dismantle it ‘with immediate effect.’

Originally, Mugabe had planned to participate in a public unveiling of the statue.

In the 1960s, Nkomo became the first national leader of the fight by blacks against the white minority government of Ian Smith. He led a rival faction to Mugabe’s in the 1970s before independence in 1980 and Mugabe’s election as prime minister.

Shortly after, Mugabe accused Nkomo and his ZAPU party of being behind an insurgency and launched a crackdown in western Zimbabwe, in which thousands of civilians were killed or disappeared. Nkomo died of prostate cancer in 1999, aged 82.

This is not the first time this year the Ndebele have protested over North Korea’s relations with Zimbabwe.

The North Korean national football team had been due to train in Bulawayo before the World Cup in neighbouring South Africa in June and July, but the visit was called off after Ndebele groups vowed to disrupt their training.

And according to Zimeye:

[A] statue of the late Vice President Joshua Nkomo was unveiled on Wednesday, but a minister said it would be immediately pulled down “following objections by his family and the Bulawayo community”.

A family spokesman said the statue, mounted at the intersection of Main Street and 8th Avenue was “small and pitiful”.

Home Affairs Minister Kembo Mohadi met Nkomo’s family for four hours on Tuesday as he unsuccessfully tried to reach an agreement on the three-metre-tall bronze statue which was erected over a month ago, and remained covered in a black cloth until Wednesday.

The meeting in Harare was also attended by Vice President John Nkomo, a relative of the late nationalist leader who died in July, 1999. Mohadi revealed John Nkomo was joined in the objections with the rest of the family.

Mohadi, who attended Wednesday’s unceremonious unveiling, said: “I have come here with bad news … to tell you that we will pull down and dismantle this statue with immediate effect.

“From the day when this statue was erected, the family objected and we have been receiving calls as to when the statue will be dismantled.

“We made extensive consultations and apparently Vice President John Nkomo shares the same sentiments with them, and as such we are complying with the wishes of the Nkomo family to remove the statue.”

Mohadi has refused to say where the statue was made and at what cost, although some reports say it was cast by a North Korean artist. It will be removed to the National Museum.

A senior government source revealed Mohadi had spoken to President Robert Mugabe after the tense meeting with Nkomo’s family.

“The President told Mohadi to ‘leave them (Nkomo’s family)’. He also said he was disappointed with John Nkomo for failing to take a principled stand,” the source said.

Mohadi, whose ministry commissioned two statues – the other designated for Harare – appeared to take the failure to get the statue to stand in Bulawayo personally.

He said: “It is unfair to myself and the ministry because we thought this was a government project that we initiated in honour of Dr Nkomo, but because the family objects to it we find it proper to concede to their plea and have no option but to abandon the project.

“With me, it is the end of the project indefinitely and I do not think we will do anything about it. The budget on it has been wasted.”

Mohadi disclosed contents of an August 31 letter he received from Nkomo’s daughter Thandiwe outlining 11 points of objection.

The family said there was no consultation on the final prototype, characteristics, and proposed locations of the statue.

“The statue itself is very small and pitiful, hardly a street statue at all nor the landmark and monument that it should be,” the family added.

The design of the statue said nothing about Nkomo and his historical legacy, the letter went on, and the size and colour of the 1,2 metre pedestal it was installed on “does not match the lofty stature of the late Father Zimbabwe.”

The family said it was not objecting to the principle of immortalising Nkomo with a statue, but wanted adequate consultations before work on a new one commenced. The family also wants the statue installed at the Joshua Mqabuko Nkomo International Airport in Bulawayo.

The planned erection of a second statue in Harare — already mired in legal troubles — now appears unlikely to go ahead. The owners of the Karigamombe Centre, the proposed site of the statue, have obtained a court order stopping the erection.

This story was eventually picked up by the Associated Press on September 29th:

The two North Korean-made statues were meant to honor a national hero but people were so offended because of Pyongyang’s links to a blood-soaked chapter of Zimbabwe’s history that one was taken down almost immediately and the other has not been erected.

Besides, at least one of them didn’t even resemble Joshua Nkomo, a former guerrilla leader known as “Father Zimbabwe” who died in 1999 at the age of 82.

That the statues were designed and made by North Koreans is an affront to Zimbabweans who blame North Korean-trained troops loyal to President Robert Mugabe for massacring thousands of civilians as the government tried to crush an uprising led by Nkomo in the 1980s. The uprising ended when Nkomo signed a unity pact in 1987 and became a vice president.

No offense was intended by the choice of North Korea to make the statues, Godfrey Mahachi, head of the state National Museums and Monuments, told The Associated Press. He said North Korea was chosen simply because it won the bid for the work, promising favorable prices.

One of the Nkomo statues was erected briefly last month in Bulawayo, Zimbabwe’s second-biggest city, on the site where a statue of British colonial era leader Cecil John Rhodes once stood. Nkomo’s family called his statue artistically “ineffectual.”

While there were no organized protests, criticisms were widespread before the unveiling. Nkomo’s relatives were quoted in newspapers complaining that they had not been consulted. Simon Dube, a Bulawayo businessman, said the Nkomo statue was shrouded under a black cloth under police guard. Dube, who glimpsed it, said the statue’s head was too small for Nkomo’s famously heavy and imposing build.

Organizers kept the police on hand during the unveiling ceremony and took the statue down within hours.

The other statue was to have been placed in the capital, Harare, outside an office tower known as Karigamombe, which in the local Shona language means “taking the bull by the horns and slaying it.” Some saw that as adding insult to injury: the symbol of Nkomo’s Zimbabwe African People’s Union party and his former guerrilla army was a rampaging bull.

Home Affairs Minister Kembo Mohadi said that despite the kerfuffle, the North Koreans have been paid their $600,000 for the two statues, state media reported.

Mahachi said officials are considering where else to put the two 3-meter (10 foot) statues.

“We still have to look at different options. They might go to museums, but that will be discussed to reach a final decision,” he said.

The Bulawayo statue is for the time being kept at the Bulawayo Natural History Museum, where the deposed statue of Rhodes is also kept.

Nkomo spent his adult life fighting colonialism and was also imprisoned for a decade for his political activism against white rule in Rhodesia, as Zimbabwe was previously called. “Father Zimbabwe” spearheaded black nationalist resistance to white rule well before Mugabe came on the scene. Nkomo’s image has appeared on postage stamps and the Bulawayo international airport has been named after him.

According to the Donga Ilbo:

Members of the credit rating agency under the Export-Import Bank of China are known to have visited North Korea around the “Day of the Sun” on April 15, otherwise known as the birthday of the Stalinist country`s founder Kim Il Sung.

A source in Beijing said, “Around 10 people from the Export-Import Bank of China made a 10-day trip to North Korea ahead of the Day of the Sun. They not only visited Pyongyang but also other cities.”

The agency provides sovereign credit ratings for countries around the world. Critics say the members visited the North to seek further economic cooperation, adding their trip holds more meaning than attending the holiday event because they also visited other cities.

Another source in Beijing said, “The Chinese government is mulling financial benefits including no-interest loans to Chinese companies investing in the [North’s] city of Rason.”

Beijing seems to be preparing to invest in the Hunchun-Rason area near the Tumen River and Dandong-Sinuiju’s Hwanggeumpyong region near the Yalu River, where Pyongyang-Beijing economic cooperation is vital.

Read the full story here:
China`s Exim Bank delegation visited N. Korea last month
Donga Ilbo
2011-5-9

According to the Joong Ang Daily:

The United States has received 101 North Korean refugees in the past few years under legislation to help improve human rights conditions in the reclusive state, statistics showed Saturday.

The total breaks down to nine for 2006, 22 for 2007, 37 for 2008, 25 for 2009 and eight for 2010, according to figures released Saturday by the Office of Immigration Statistics at the Department of Homeland Security.

Hundreds of thousands of North Korean refugees are also believed to be in China.

Most North Korean refugees, fleeing poverty, aim to make their way to South Korea via neighboring China.

South Korea has received more than 20,000 North Korean defectors since the 1950-1953 Korean War.

China has come under criticism for repatriating North Korean refugees under a secret agreement with North Korea, categorizing defectors as economic immigrants rather than refugees, despite the danger of them being persecuted back home.

The North Korean refugees were admitted into the U.S. under the North Korean Human Rights Act of 2004, which calls for the provision of financial aid to help improve North Korea’s human rights and accept North Korean defectors into the U.S.

In 2008, Congress approved the North Korean Human Rights Reauthorization Act for another four years, calling for “activities to support human rights and democracy and freedom of information in North Korea,” as well as “assistance to North Koreans who are outside North Korea,” and 12-hour daily broadcasting to North Korea.

The 201 Office of Immigration Statistics Annual Flow Report also showed that 73,293 people were admitted to the U.S. as refugees in 2010.

The leading countries of nationality were Iraq (18,016), Burma (16,693) and Bhutan (12,363).


Read the full story here:
U.S. takes 101 North Korean refugees
Joong Ang Daily
2011-5-9

According to Yonhap:

A daily average of more than 600 South Korean workers are currently staying at the Kaesong Industrial Complex in North Korea, up from the 500-level in the past several months, according to a Seoul ministry Sunday.

The increase reflects a reduction in military tensions between the two Koreas, officials at the Unification Ministry that handles inter-Korean affairs said.

The ministry’s data showed that around 650 South Koreans stay at the industrial park, located just north of the inter-Korean border, per day starting last month.

“With regard to the number of production-related manpower, we are granting permission to stay (there) with more flexibility starting in the middle of April,” a ministry official said, requesting anonymity. “The number is expected to gradually increase down the road as well.”

He said the ministry’s flexible stance is attributable to petitions from companies in the Kaesong complex and the alleviation of security concerns of South Korean workers as inter-Korean tensions have eased a bit.

Read the full story here:
Number of S. Koreans at Kaesong rebounds amid letup in tension
Yonhap
2011-5-8

According to Yonhap:

The number of Chinese visitors to North Korea’s border town of Sinuiju has reached 100,000 over the past year after Beijing lifted a four-year ban on Chinese group tours from the Chinese border city of Dandong, a news report said Friday.

Dandong, which borders Sinuiju, is a major trade route between North Korea and China.

The Chinese government resumed the group tours to Sinuiju from Dandong in April last year, a Dandong newspaper said, adding the number of Chinese tourists to Sinuiju is likely to go up in the coming months.

The one-day group tour program allows the Chinese to visit Sinuiju without visas.

China is the North’s last remaining ally and benefactor.

Read the full story here:
Chinese visitors to N. Korean border city top 100,000 in one year
Yonhap
2011-5-6

According to the Bangkok Post:

Thai authorities have rejected South Korea’s proposal to build a coordination centre to deal with North Koreans illegally entering the country over concerns that it might encourage more inflows of migrants from the communist nation.

South Korea reportedly asked the government early this year to build the centre in Chiang Rai province, a popular entry point for illegal North Korean immigrants into Thailand.

Most of the immigrants have escaped economic hardship in North Korea and travelled to Thailand for temporary refuge in the hope of being able to resettle in third countries, usually South Korea, a source at the Internal Security Operations Command (Isoc) said.

From October last year until April this year, 899 North Koreans were arrested for illegal entry, said Isoc spokesman Maj Gen Dithaporn Sasamit. The source said South Korea had offered to pay to take care of the illegal migrants. However, the government had turned down the proposal because it had no policy to open a new refugee centre.

The South Korean government has played an important role in helping North Koreans by allowing them to resettle in its country.

Pol Maj Gen Phansak Kasemasanta, deputy chief of the Immigration Bureau, said that North Koreans illegally entering Thailand would be arrested.

After being tried in court, the immigrants would be detained at the Immigration Bureau while awaiting deportation.

The immigrants normally protest at being sent back to North Korea, allowing South Korean officials to step in and help, Pol Maj Gen Phansak said.

He added that instead of building a new centre for the North Korean migrants, South Korea could help improve the present detention centre at the Immigration Bureau.

North Koreans could stay there along with other illegal immigrants from other nations, he said.

According to the Isoc and the Immigration Bureau, North Koreans are normally helped by human trafficking gangs to travel to China.

They are then put on board Chinese cargo boats to Laos before boarding smaller boats or travelling on foot to Chiang Rai’s Chiang Saen and Chiang Khong districts.

“The trips are arranged by gangs made up of North Korean, Chinese and Thai nationals,” said Maj Gen Thawip Bunma, a senior Isoc official.

The Isoc and the Immigration Bureau have been tracking down people involved in the human trafficking gangs.

However, Pol Maj Gen Phansak said police still have no evidence to confirm that Thais were involved.North Korean migrants who have been arrested have told officials that they had to pay at least 100,000 baht to the gangs to help arrange their trips to Thailand.

Most of the migrants were willing to turn themselves in to Thai authorities, seeing it as the first step for them to travel on to the third countries they ultimately wish to settle in.

Read the full story here:
Illegal North Korean migrants on rise
Bangkok Post
2011-5-6

By Michael Rank

The remains of a British pilot who was killed in the Korean war have been handed over to British officials at Panmunjom, after being buried for several years near Pyongyang.

The North Korean news agency KCNA said the body of Desmond Hinton had been disinterred at the request of his family, who in March “asked for bringing his remains back home.”

“Authorized by the DPRK government, the Panmunjom Mission of the Korean People’s Army conducted a series of survey which led to accurately unearthing and ascertaining the remains of Hinton and relics left by him and buried them on the spot with care as requested by his bereaved family and provided the family members with facility so that they might visit his grave,” it added.

Several years ago Desmond Hinton’s brother David, relying on reports of how Desmond was shot down over Pyongyang on January 2, 1952, managed to track down his remains and, with the help of the North Korean army and the British embassy, arranged for them to be buried near where his aircraft came down. He visited the site in 2004 and told me he was content for his brother’s remains to lie buried in North Korea.  I reported on this remarkable story in some detail here.

But the family have apparently had a change of heart recently about leaving Desmond’s remains in North Korea, although none of them was immediately available for comment.

Although Desmond was a flight lieutenant in the Royal Air Force he was one of 41 RAF pilots flying for the United States Air Force when he died.

A British Ministry of Defence spokesman said it could not be confirmed that the remains were those of Desmond Hinton, and that they would be subject to DNA testing.

“We can confirm that the Democratic People’s Republic of Korea has passed remains to the British authorities. We are unable to confirm the nationality or identity of the remains at this time. A detailed forensic analysis will now take place. We are very pleased with the cooperation we have received from the authorities of the Democratic People’s Republic of Korea,” he said in a statement.

The spokesman said that as far as he was aware no family members were present at the handing over of the remains at Panmunjom. He added that it would be usual for the remains to be buried in the United Nations Memorial Cemetery in Busan, South Korea, but it was up to the family to make the final decision once identity had been confirmed. Some 885 British troops lie buried at Busan, more than any other nation.

KCNA said this was the second set of British remains to be sent across the DMZ. It said that “The remains of J. Edmuns, a second class private of the British Army, were handed to the British side on October 30, 1995” but gave no details. The British Defence Ministry spokesman said he also had no details of this, although a British diplomat said he was aware of such an event in the 1990s.

KCNA said in an unusually conciliatory report, “Expressing deep gratitude to the government of the DPRK for having made every sincere effort for this humanitarian undertaking, the British side predicted that such cooperation would mark a good occasion in developing the relations between the two countries.

“The Panmunjom Mission of the KPA clarified the stand to render positive cooperation in the future, too in unearthing and sending back remains, the humanitarian work for healing the wounds caused by the past Korean War. ”

Additional information:
This story was covered in The Guardian, Daily Mail, and Yonhap.

Mr. Hinton’s remains were buried in Kuso-ri near the Sunan Airport. You can see a satellite image of the village here: 39°14’26.55″N, 125°42’58.17″E

According to the Hankyoreh:

China is stepping out into the Pacific through the gates of North Korea’s Rason Special District. North Korea, which has been declaring its aim of creating a “strong and prosperous nation by 2012,” is actively welcoming the move from China.

A number of sources, including officials with the Jilin Province government in China, reported that a groundbreaking ceremony is to be held on May 30 for a highway linking the North Korea cities of Wonjong and Rason, bordering directly on Quanhe in Hunchun, Jilin Province. A number of leaders from both countries are scheduled to attend the ceremony, which is to take place in Rason (Rajin-Sonbong), North Korea.

A Chinese official working on preparations for the project said in a recent interview with the Hankyoreh that the event would be “an occasion for declaring North Korea-China economic cooperation and North Korean openness to the world.” The official added that dozens of officials from the Chinese central government would be attending, including a number of leaders.

The construction effort is a signal announcing the opening of Rason and large-scale economic cooperation between North Korea and China. In addition to the groundbreaking ceremony for the highway, which is to be a major channel tying North Korea and China together economically, efforts to develop China’s Rajin Harbor and transport large amounts of coal through it are beginning in earnest.

The Rason development effort is taking place according to China’s “blueprints” in everything from the planning to investment and management. Local sources said that China and North Korea have already formed a special joint steering committee for the district, and that it has been decided that the chairman will be from China.

The Rason urban development plan jointly drafted by China and North Korea includes the development of international freight brokerage, export processing, and financial regions. According to a North Korean video, models for the plan include Dalian and Tianjin, which Kim Jong-il inspected in 2010 during a visit to China.

An official with the Yanji city government said, “North Korea is also aware that keeping its doors closed will only lead to death, but it is concerned that the regime will be destabilized if it opens up all at once, so it plans to first open up Rajin and develop it as a ‘test region.’”

“They are adopting the Chinese model, learning from China about legislation, taxes, and benefits to lure businesses,” the official added.

The effort is being pursued promptly, in contrast with previous North Korea-China economic efforts, which tended to amount to little more than words. The reason for this is that the central governments in Beijing and Pyonyang are directly taking care of economic cooperation through the medium of Rason’s development.

A Chinese government official reported that Chinese Minister of Commerce Chen Deming traveled to North Korea to sign a memorandum of understanding, and that China and North agreed on a plan for joint investment in and administration of Rason’s highway, port, and industrial park construction. The official added the Chinese Prime Minister Wen Jiabao personally signed policy documents upgrading Hunchun to a special economic district in line with the Rason development plans.

Meanwhile, North Korea formed an office in its central government to directly administer Rason Special City, replaced old officials who failed to make progress with Rason’s development over the years, and sent in young officials from the central government, including Rason Special City secretary Im Kyong-man, sources reported.

China needs the Rason development to ensure the success of its current national development plan for Changchun, Jilin, and the Tumen River basin, while North Korea decided to cooperate with China to address its economic problems and stabilize its succession framework. Analysts say North Korea hopes to tout successful development of Rason as an achievement of Kim Jong-un.

The development project is proceeding in a very specific and far-reaching way. “This is Korean land, but the industrial complex is being operated as Chinese and will hire North Korea workers to earn foreign currency” for North Korea, said an official with a Chinese company in charge of a large-scale construction effort in Rason.

The electricity shortage issue, which had previously been a major stumbling block to investment, has been resolved by China. A source in Hunchun said, “Plans are being examined to either send surplus power from Hunchun’s thermoelectric power plants to Rason, or for a company in Jilin Province to retrofit an old Soviet crude oil plant in the Sonbong region into a coal-burning power plant.”

Even Chinese officials have been astonished at the active measures from Pyongyang. A Rajin representatives’ office opened in downtown Yanji, the seat of the Yanbian Korean Autonomous Prefecture, is hard at work drawing in investment.

“If Chinese investors want to take a look at Rason, they can drive their cars in for themselves with an invitation from the Rajin representatives,” explained a source in Yanbian.

In the border city of Hunchun, money and people have begun shifting toward the North Korean side. Construction of 500 apartments for Chinese people working in Rason began in late March, according to officials at a construction company commissioned to carry out the project. Capital and labor investment for the Hunchun-Rason highway construction is coming entirely from China, and a number of the roughly 500 Chinese workers needed to begin have already arrived in Rason with six-month passes issued by North Korea. Large Chinese corporations such as Changli, Shangdi Guanquan Investment, and FAW are known to be undertaking investment in Rason.

According to the Korea Herald:

Despite its reputation as one of the most closed nations in the world, North Korea is, at least partly, opening up to market economy conventions, evident in its effort to cultivate its specially designated economic zone.

North Korea designated Raseon the country’s first free trade zone, as a “special city” in January 2010. The city, which borders both China and Russia, was dubbed a free trade zone along with nearby Sonbong in 1991, even though foreign investment never materialized.

In recent years, the North has tried to reinvigorate the trade zone, signing an accord with Russia to restore railways that could help rejuvenate the port there. Russia invested 140 million euro ($202 million) in the Rason project in late 2008.

In recent months, North Korea appears to have initiated a media campaign for Rason, beckoning foreign investors as Pyongyang struggles to resuscitate its moribund economy, according to informed sources and media reports.

According to a source familiar with North Korean affairs, the city has seen both new factories built and upgrades of previous ones.

A couple of large Chinese companies have also reportedly signed deals on either providing construction parts or investments in the region’s resources development.

Chinese commerce officials from the central government and the nearby Jilin Province have also reportedly held talks with their Pyongyang, Rason counterparts regarding such business transactions.

The city is also becoming more urbanized, according to sources. Apartments and road construction repairs are sprouting, while the number of daily logistics traffic across the nearby North Korea-Chinese border has nearly doubled to some 200 trucks in late April, compared to some 100 trucks just three months ago.

The North Korean leader Kim Jong-il recently traveled to the city, a move that analysts see as underlining the regime’s desire to promote the trade city to lure foreign investment.

The KCNA reported on April 22 that Kim visited the city’s Rajin Shipyard where he was briefed on different processes of shipbuilding. There he highlighted the importance of the shipbuilding industry and urged for the introduction of new production technology.

It was the first time that the North’s tightly controlled media reported the name of the shipyard and Kim’s visit there. Known as one of three major shipyards in North Korea, the Rajin Shipyard is believed to have built warships and submarines, according to sources in Seoul.

Increasing media reports from North Korea on Rason also seems to back claims that the country is putting its weight behind the city.

On April 19, the KCNA filed a profile report on Rason’s tourism industry, touting its historic relics, cultural facilities and fantastic seascape “and introducing tourist hot spots in and near the city.

In an earlier, March 30 report, the KCNA said that the city has adopted “a preferential tariff system” for foreign investors and traders.

“Choe Kwang-nam, an official in charge of economic cooperation of the Rason City People’s Committee, told the KCNA that the zone provides favorable business conditions to foreign investors through the preferential tariff system,” it said.

“Foreign investors and businesses are allowed to conduct diverse economic and trade activities and have a free choice of investment forms and business,” it quoted Choe as saying.

Read the full stories here:

N.Korea’s Rason Special District could open country to China
Hankyoreh
Park Min-hee
2011-5-4

Investment, projects seemingly brim in N. Korea border city
Korea Herald
2011-5-4