Archive for the ‘Special Economic Zones’ Category

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DPRK announces six more economic development zones

Wednesday, July 23rd, 2014

According to KCNA:

Economic Development Zones to Be Set up in Provinces of DPRK

Pyongyang, July 23, 2014 17:50 KST (KCNA) — It was decided in the DPRK to establish economic development zones in some areas of Pyongyang, South Hwanghae Province, Nampho City, South and North Phyongan provinces.

Unjong cutting-edge technological development zone will be set up in some areas of Wisong-dong, Kwahak 1-dong and Kwahak 2-dong, Paesan-dong and Ulmil-dong in Unjong District, Pyongyang.

Kangryong international green model zone will be set up in some areas of Kangryong township in Kangryong County, South Hwanghae Province.

Jindo export processing zone will appear in some areas of Jindo-dong and Hwado-ri, Waudo District, Nampho City.

Chongnam industrial development zone will be set up in some areas of Ryongbuk-ri, Chongnam District, South Phyongan Province. Sukchon agricultural development zone will appear in some areas of Unjong-ri, Sukchon County and Chongsu tourist development zone in some areas of Chongsong Workers’ District and Pangsan-ri, Sakju County, North Phyongan Province.

The sovereignty of the DPRK would be exercised in the economic development zones in provinces.

The relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Wednesday.

By my count, this brings the total number of special economic zones and economic development zones to 25. Little visible progress has been made on the zones announced in 2013, though things seem to be happening in Pyongyang. Also, South Phyongan Province now has Economic Development Zones. It had been omitted from previous lists.

Yonhap also reports:

Jin Qiangyi, a professor of Korean studies at Yanbian University, told the state-run China Daily that the move by North Korea is apparently aimed at breathing new life into its moribund economy.

…

“Many Chinese companies still feel daunted by doing business in the country because there is no clear policy to guarantee investors’ interests,” the newspaper quoted Jin as saying.

However, another Chinese expert, Li Tianguo, a researcher at the National Institute of International Strategy at the Chinese Academy of Social Sciences, was less pessimistic.

Li told the newspaper that the new zones will “have great attraction to Chinese enterprise and bring good opportunities, in particular for businesses with border trade and processing production.”

China’s direct investment into North Korea jumped to US$109.46 million in 2012 from $5.86 million in 2009, the newspaper reported, citing what it called a “2012 Statistical Bulletin of China’s Outward Foreign Direct Investment.”

Here is analysis by the Institute for Far Eastern Studies (IFES):

North Korea Declares Six Additional Economic Development Zones

On July 23, 2014, the (North) Korean Central News Agency (KCNA) announced the designation of six additional economic development zones (EDZs) throughout various provinces in North Korea. The announcement, which states, “It was decided in the DPRK to establish economic development zones in some areas of Pyongyang, South Hwanghae Province, Nampo City, South and North Pyongan Provinces,” and that this decree was promulgated by the Presidium of the Supreme People’s Assembly (SPA).

It was announced that North Korea will push forward with the Unjong Cutting-Edge Technological Development Zone in the areas of Wisong, Kwahak 1 and 2, Paesan and Ulmil, located in the Unjong District of Pyongyang. Furthermore, it appears that the Kangryong International Green Model Zone will be established in Kangryong County in South Hwanghae Province. According to the investment propositions revealed in November 2013, the “International Green Model Zone” will focus on the development of organic farming and greenhouse technology, wind and water power technology, and the development of services such as golf courses and hotels.

The Chongnam Industrial Development Zone will be set up in Chongnam District in South Pyongan Province, Sukchon Agricultural Development Zone will be established in various areas in Unjong in Sukchon County, and the Chongsu Tourist Development Zone will cover the areas of the Chongsong Workers’ District and Pangsan, Sakju County in North Pyongan Province. It has also been reported that North Korea will push forward with the Jindo Export Processing Zone in Jindo and Hwado, located in the Waudo District of Nampo City. Following the announcement of thirteen new economic development zones in November last year, including the Amrok (Yalu) River EDZ, Sinpyeong Tourism Development Zone, the Manpo EDZ and Wiwon Industrial Development Zone, the newly announced six additional zones brings the total number of economic development zones in North Korea to nineteen.

It was also reported by the KCNA on the same day that the Sinuiju Special Economic Zone in Sinuiju, North Pyongan Province, will be renamed to the Sinuiju International Economic Zone. Through this renaming, it can be assumed that North Korea is intending to reinitiate development in the stagnating zone, which has been in the development process since first being designated as a special economic zone in 2002.

On the other hand, the Wonsan Kalma Peninsula in North Korea’s Kangwondo Province, renowned for its beautiful scenery, has been garnering attention due to a recent push for the construction of large-scale accommodation, recreation and industrial facilities. Over 1,400 ha plot of land along the Kalma Peninsula is expected to be divided up into several areas, including hotels and accommodations, conference and exhibit fairgrounds, an athletics stadium, economic development area, and a commerce service area.

In order to respond to the increase in tourists visiting the Wonsan area, North Korea is preparing to increase the area’s hotel and lodging capacity by ten times, maxing out at a total capacity of eleven thousand people. Furthermore, plans have been drawn up calling for the construction of a passenger wharf which can transport up to twenty-five thousand people per day to the waterfront. The beach area will also be developed, allowing for up to ten thousand beachgoers at one time.

In the Dunam Mountain area of Kalma Peninsula, theaters, golf courses, an underwater hotel, and tourist accommodations will be built together with industrial complexes for science, industry and agricultural research and development. It is also predicted that North Korea will also develop several of the small islands off the coast of the Kalma Peninsula into tourist attractions.

I have all of the economic Development Zones mapped out on Google Earth.

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Posted in China, Chongnam Industrial Development Zone, Chongsu tourist development zone, Economic Development Zones (2014), Economic reform, Foreign direct investment, Jindo Export Processing Zone, Kangryong International Green Model Zone, Statistics, Sukchon Agricultural Development Zone, Trade Statistics, Uncategorized, Unjong cutting-edge technological development zone | Comments Closed

Sinuiju SEZ renamed

Wednesday, July 23rd, 2014

Sinuiju-SEZ-2014-2

Pictured Above (Google Earth): The approximate borders of the Sinuiju Special Economic Zone.

According to KCNA:

Special Economic Zone in Sinuiju City to Turn into Sinuiju Int’l Economic Zone

Pyongyang, July 23, 2014 17:40 KST (KCNA) — The DPRK decided to rename the Special Economic Zone in some parts of Sinuiju City, North Phyongan Province, Sinuiju International Economic Zone.

The sovereignty of the DPRK will be exercised in the Sinuiju International Economic Zone.

The relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Wednesday.

Previous posts on the Sinuiju SEZ here and here.

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Posted in Sinuiju International Economic Zone | Comments Closed

Rajin (Rason) port 3 open for business

Friday, July 18th, 2014

According to KCNA:

Wharf No. 3 of Rajin Port Goes Operational

Rason, July 18, 2014 20:13 KST (KCNA) — Wharf No. 3 of Rajin Port has been built with success in the DPRK.

The building of the wharf pursuant to the plan for cooperation between the DPRK and Russia provided another foundation for making a positive contribution to boosting the friendly and cooperative relations between the two countries and economic and trade relations among countries of Europe and Northeast Asia.

An inaugural ceremony took place in Rason City Friday.

Present there were Jon Kil Su, minister of Railways, officials concerned and working people in the city.

Also present there were Vladimir Yakunin, president of the Russian Railways Company, Yury Viktorovich Bochkarev, consul general of the Russian Federation in Chongjin, those concerned of railways and other Russian guests and staff members of foreign embassies in the DPRK.

Vladimir Yakunin in a speech said he was pleased with the completion of the wharf.

The wharf is capable of loading and unloading millions of tons of coal, he said, expressing belief that such joint work would not only develop the bilateral cooperation but promote friendship and mutual understanding between the two countries.

Jon Kil Su said in his speech that the successful reconstruction of the Rajin-Khasan railway section and the completion of Wharf No. 3 of Rajin Port are precious products of the vitality of the Moscow Declaration signed by leader Kim Jong Il and President V. V. Putin. He noted that the transport channel newly provided in the spirit of friendship and cooperation between the two peoples would satisfactorily play the role of a friendship bridge linking Europe and Northeast Asia and, through this, the international position of the Rason Economic and Trade Zone would be further enhanced.

Then followed congratulatory speeches.

A reception was given on the same day.

According to ITAR-TASS:

A new Russian-North Korean terminal was commissioned on Friday in Rajin, which is the major seaport of the North Korean Rason trade and economic zone located in the northeast of the republic. Thus, the pilot part of the project aimed at the reconstruction of the Trans-Korean railway from Russia’s Hasan to the seaport of Rajinis over. Relevant agreement of the heads of Russian, North and South Korean railway authorities was signed in Russia’s Siberian city of Irkutsk in 2006.

Russian Railways’ (RZD) subsidiary, RZD Trade House, and the Rajin port had established the joint venture Rason Con Trans in order to carry out the modernization process. The cargo traffic capacity of the new high-tech multi-purpose facility is about five million tonnes a year. The initial stage of the terminal operation envisions supplies of coal and other bulky goods towards the port. Alongside with cargo transshipment and storage, the terminal makes it possible to organize coal magnetic cleaning and coal separating.

“Today, we are eyeing the loading of the first ship with Russia-mined coal,” RZD President Vladimir Yakunin told the terminal commissioning ceremony. “We are interested in bigger amounts of cargoes in the terminal and higher number of vessels, which will represent the whole world. The launching of the terminal is expected to be fruitful and beneficial not only for the economy of North Korea, but also business communities of neighbor states.”

Jointly with representatives from Russia and North Korea, businessmen from South Korea were also attending the ceremony.

This Russian source had a good summary of events leading up to the opening (Translated by Google):

The official ceremony is scheduled for July 18 in Rajin, which is considered the main port of the SRE. Investment in the project is mainly carried out by the Russian side.The volume of transshipment terminal at the first stage is planned at 4-5 million tons, according to ITAR-TASS.

Initially, the terminal was planned for container transport, but in agreement with the leadership of North Korea until it will be used for the carriage of the Russian coal. In the future, is expected to increase traffic and expand the range of goods.

Agreement to begin the reconstruction of the railway line from the Russian station to Hassan and the port of Rajin as a pilot project to restore the Trans-Korean Railway was reached in 2006. The project started in October 2008, when an agreement was signed between the “Russian Railways” and the Ministry of Railway Transport of the DPRK to cooperate in its implementation. The project is implemented by the joint venture “RasonKonTrans”, created in the same year, with the share of JSC “RZD Trading House” (70%) and the port of Rajin (30%).

In October 2011, a team of machinists Far Eastern Railways of Russia led a demonstration container train in Rajin, opening cargo traffic between the two countries. To control the movement of trains on the line Hasan – Rajin, a special control center with the participation of specialists “RasonKonTrans” and North Korean shipping company “Donghae”.

34 specialists from the DPRK have been trained in the training centers of the Far Eastern Railway.

In the future, when the message will be set up all over trnskoreyskoy magitrali – from the South Korean port of Pusan ​​through Korea to Russia, will be able to refocus on the Russian Trans-Siberian significant portion of goods that are currently going by sea from South Korea to Europe.

According to experts, these advantages have Rajin – ice-free port on the eastern coast of North Korea with the developed infrastructure, which uses Russian standard gauge with a high degree of security for shippers and benefits for entrepreneurs.

Additional information:

1. The Russia-Rason Railway that services the port was opened in September 2013.

2. South Korea is also interested in the Rajin port.

3. There has been some confusion on the legal status of the various piers at Rajin. I help shed some light on the confusion here.

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Posted in Foreign direct investment, International trade, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Russia, Sea shipping, Transportation | Comments Closed

DPRK tightens entry rules in Kaesong factory park

Friday, July 18th, 2014

Apparently out of fear that the Keasong Industrial Complex might be used to subvert national security, the DPRK is instituting new rules for South Koreans entering the park. According to Yonhap:

“The North notified the management committee for the Kaesong Industrial Complex of its plan to tighten entry rules starting on Friday,” said the ministry, which handles inter-Korean affairs.

Under the stricter rules, South Korean workers are subject to a one-day entry denial if they are found carrying prohibited materials critical of the North Korean regime or automobile black boxes.

Those who don’t abide by entry rules by failing to cover up their car license plates or deviating from regular entry allowance hours will also be put under entry denial of up to two days, according to the ministry.

The North has also hinted at the possibility of punishing South Korean companies operating in the Kaesong complex, depending on the level of future entry rule violations, the ministry said.

Currently, North Korea fines South Korean workers US$100 for carrying cell phones, while failure to abide by entry hours is subject to a $50 fine.

The toughened rules also came despite Seoul’s pronounced opposition to the unilateral decision.

Seoul has previously expressed its opposition and demanded the changes be discussed bilaterally, but the North has unilaterally issued the notification, officials said.

Read the full story here:
N. Korea tightens entry rules in Kaesong factory park
Yonhap
2014-7-18

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Posted in Kaesong Industrial Complex (KIC), South Korea | Comments Closed

Kumgang Resort operational status (UPDATED)

Monday, July 14th, 2014

Pictured above (Google Earth): April 2010 satellite imagery of the Kumgang tourist resort

The Kumgang resort was receiving 400,000 visitors per year until in July 2008 it became the scene of a terrible tragedy, the shooting of a South Korean tourist. Following the incident, the South Korean government prohibited its citizens from visiting the resort until the DPRK allowed a joint-Korean investigation of the shooting and made a guarantee of future safety.  The DPRK never agreed to these terms so the park fell idle.

The suspension of the project has cost the DPRK government millions of dollars. In response it has moved to pressure the ROK government to change course and allow the tours to resume. Below I have kept a timeline of the course of these events and their outcomes.

___________

2014-7-14: The Hankyoreh marks July 11–the 6th anniversary of the day when tours to Mt. Keumgang in North Korea were suspended. 

“As a result of the suspension of tourism to Mt. Keumgang, we have lost nearly 1 trillion won [US$981 million], including the 300 billion won [US$294.32 million] invested in the facilities and an estimated 530 billion won in lost revenue,” the investors said. They urged the governments of North and South Korea to immediately hold working-level talks to resume tourism to Mt. Keumgang and to hold reunions for divided families.

…

“The position of the government is that the issue of the safety of its citizens must be resolved before it can allow tours to Mt. Keumgang to resume. In addition, given the continuing UN Security Council sanctions in response to North Korea’s nuclear and missile testing, which occurred after tours to Mt. Keumgang were halted, we think that the tours cannot be resumed until the government indicates that doing so would not be in violation of UN sanctions,” said Ministry of Unification spokesperson Kim Ui-do during a regular press briefing on July 11.

2012-11-27: The Hankyoreh reports that North Korea provided a written guarantee for the safety of tourists at Mt. Kumkang during 2010 working level talks with the South Korean government.

2011-9-6: South Korea asks foreigners not to invest in Kumgang saying such investments would violate existing property rights.

2011-9-6: Park Chol-su, head of Daepung International Investment Group, said he wants to discuss with South Korea’s Hyundai Asan how to handle its assets at the North’s Mount Kumgang.

2011-8-31: Chinese tourists arrive in Kumgang on Mangyongbong.

2011-8-30: South Korea calls for international boycott of Kumgangsan resort

2011-8-28: Taephung Investment Group outlines new Kumgang business plan

2011-8-24: Kumgang opened to DPRK and Chinese toursits

2011-8-23: South Korean workers leave Kumgang

2011-8-22: DPRK orders expulsion of remaining South Korean staff, auctioning of assets

2011-8-19: Hyundai officials visit Kumgang amid dispute over fate of company assets

2011-8-6: Steve Parks claims he has signed an MOU with the DPRK government

2011-6-2: “DPRK Law on Special Zone for International Tour of Mt. Kumgang” released. PDF of the statute here.

2011-4-29: SPA designates Kumgang special zone

2011-4-1: DPRK rescinds Hyundai’s Kumgang contract rights

2010-11-15: Kumgang re-fozen

2010-10-31: Family reuniuons were held there in October/November

2010-8-7: DPRK using Kumgagn assets to serve tourists in the North

2010-5-16: Taephung shows Chinese investors Kumgang

2010-5-3: Most South Korean and Chinese employees leave

2010-4-25: The National Defense Commission takes over the properties and puts the Korea Taepung International Investment Group in charge of attracting investors and tourists to the resort.

2010-4-23: Seoul denounces the seizure

2010-4-11: Chinese tourists began arriving at the resort (here and here).

2010-4-11: Employees told to leave/sealed up

2010-4-11:The DPRK “seizes” the Hyundai properties in the Kumgang resort

2010-3-24: Investors worried about losing out

2010-3-18: DPRK threatens to seize Kumgang Resort

2010-3-18: Hyundai-Asan’s chief offers to resign

2010-3-10: DPRK threatens to revoke contracts with South Korean partner, Hyundai-Asan

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Posted in Bureau of Special Zone Development, Economic reform, Foreign direct investment, Korea Taepung International Investment Group (Daepung Investment Group), Mt. Kumgang Tourist Special Zone, South Korea, Special Economic Zones (Established before 2013), State Development Bank, Tourism | Comments Closed

Quanhe-Wonjong Bridge: Renovated and to be replaced (UPDATED)

Saturday, June 28th, 2014

 rason-bridge-2016-3-19

 Pictured Above (Google Earth) the Hunchun-Rason Bridge: (L) 2009-5-28 (R)  2016-3-19

UPDATE 6 (2016-3-19): New satellite imagery shows progress being made on the bridge, but it seems to be moving slowly.

UPDATE 5 (2014-6-28): According to Xinhua, the bridge is to be replaced:

China and the Democratic People’s Republic of Korea (DPRK)agreed on Friday to jointly build, manage, and maintain a new border bridge between thetwo neighbors.

An agreement was signed by Chinese Ambassador to the DPRK Liu Hongcai and DPRKVice Foreign Minister Pak Myong Guk, the official KCNA news agency reported.

The Quanhe-Wonjong bridge over the Tumen River, which was built in the 1930s, hasbeen in a shabby condition.

UPDATE 4 (2012-10-26): Rajin-Wonjong Road Opened to Traffic

 

Pictured Above (KCNA): Photos of the official opening of the renovated road

According to KCNA:

Rajin-Wonjong Road Opened to Traffic

Pyongyang, October 26 (KCNA) — A ceremony took place in Rason City of the DPRK on Friday to open to traffic the Rajin-Wonjong road in the Rason Economic and Trade Zone jointly developed and operated by the DPRK and China.

Attending it from the DPRK side were Jo Jong Ho, chairman of the Rason City People’s Committee, officials concerned and people of the city and from the Chinese side were Zhang Anshun, secretary of the Yanbian Autonomous Region, Jilin Province, Committee of the Communist Party of China, Chen Weigen, vice-governor of the Jilin Provincial People’s Government, Tian Baozhen, consul-general to Chongjin, and other officials concerned.

Congratulatory speeches were made at the ceremony.

Hwang Chol Nam, vice-chairman of the Rason City People’s Committee, said it is very glad that the road has been opened to traffic amid great expectation and interest of the peoples of the two countries at the historic time when the traditional bilateral friendship is growing stronger.

The whole course of the road project served as an occasion in deepening the friendly relations of the DPRK and China and displaying the validity and vitality of their joint development and operation of the Rason Economic and Trade Zone, Hwang added.

The road helps increase the cargo traffic and transport of freight from northeastern China to Rajin Port and promote the development of economic relations between the two regions, including tourism, he said.

Zhang Anshun warmly welcomed the opening of the road on behalf of the Jilin Provincial Party Committee and Government, saying that it is a good start for the progress of the zone to be jointly developed and operated by the two countries.

Zhang hoped that the two countries would develop the economy and their peoples would enjoy happiness under the guidance of the Communist Party of China headed by Hu Jintao and the Workers’ Party of Korea headed by Kim Jong Un.

Members of the platform cut the tape to declare the opening of the road. Then vehicles passed along the road amid display of fireworks.

Here are additional articles that mention the bridge:

1. Recent articles on Rason’s future (2011-5-4)

2. Rason’s Chinese investor tour (2011-4-4)

UPDATE 3 (2011-9-7): A reader send in a photo of the road:

Rajin-China-Road-2011-9-7

Click image to see lager version and source.

UPDATE 2 (2010-6-23): Hunchon Bridge opens.  According to Kyodo (via Breitbart):

China has repaired a bridge in Hunchun at the Chinese and North Korean border, giving it a safer access to North Korea for use of Rajin port to ship coal to Shanghai, according to Jilin Province officials.

China paid 3.6 million yuan ($528,526) to repair the bridge over the Tumen River, a project jointly pursued with North Korea, the officials said Tuesday.

Work was completed June 14.

The bridge serves as a gateway to Pier No. 1 at Rajin port, which a Chinese company has obtained the right to use for 10 years.

In April, the Chinese government approved a plan to transport coal and other items produced in Jilin to Shanghai via Rajin in northeastern North Korea.

China and North Korea have been in talks about financing of a plan to build a 50-kilometer road leading to the port, the officials said.

UPDATE 1 (2010-6-6): DPRK border bridge to reopen this month, highway to border opens in October
By Michael Rank

A bridge on the Chinese-North Korean border that will take traffic to the North Korean port of Rajin is due to reopen at the end of this month, while a highway from the Jilin provincial capital of Changchun to the border city of Hunchun 珲春 will open in October, according to Chinese reports here and here.

As NKEW reported in April, the 70-year-old bridge over the Tumen river near Hunchun  is being rebuilt as part of a reported $44 million plan to modernise the road from the border to Rajin. Built during the Japanese occupation in 1938, the bridge is 535 metres long and 6.6 metres wide, and joins the Chinese border post of Quanhe 圈河 with the North Korean town of Wonjeong 원정.

The highway will open on October 1, China’s national day, and will cut the journey time from Changchun to Hunchun from eight hours to five, the report said. But it indicated that the 60-km road from the border to Rajin, said to be mostly unpaved and prone to frequent accidents during rain, would not be ready by then.

A Chinese company, Chuangli Group, based in Dalian in Liaoning province,  was reported in March to have signed a 10-year deal to lease a pier at Rajin (also known as Rasŏn or Rajin-Sŏnbong), giving China access to the Sea of Japan for the first time since the 19th century when the Qing imperial government signed treaties under duress from Japan and Russia.

ORIGINAL POST (2010-4-13): Bridge on China-North Korea border being renovated
By Michael Rank

A 70-year-old bridge on the Chinese-North Korean border is being renovated to improve transport to and from the North Korean port of Rajin 라진 (Rason [Raseon]/Rajin-Sonbong) which a Chinese company has taken over on a 10-year-lease, a Chinese website reports.

The bridge over the Tumen river near the city of Hunchun 珲春 in Jilin province will be reopened at the end of June after almost five months of work. Built during the Japanese occupation in 1938, the bridge is 535 metres long and 6.6 metres wide, and joins the Chinese border post of Quanhe 圈河 with the North Korean town of Wonjeong 원정. The report gave no details of costs but said it was being renovated under a deal between the cities of Hunchun and Rason 라선. It said the bridge would help to boost trade in both Hunchun and Rajin and in the region generally.

The refurbishment of the bridge is part of a reported $44 million plan to modernise the road from the border to Rajin.

Ahn Byung-min, an expert on North Korean infrastructure at the Korea Transport Institute, was quoted by the Korea Herald as saying a senior Chinese local government official had told him that the governor of Jilin had signed an agreement to invest 300 million yuan in expanding and paving the road to Rajin.

A Dalian-based company named Chuang Li agreed in 2008 to revamp the road in exchange for leasing a pier at Rajin. “Chuang Li isn’t a company big enough to afford the road construction, so the Jilin government took on the direct investment instead,” Ahn said.

Additional Information:
1. The existing 60-km road is mostly unpaved and prone to frequent accidents during rain.

2. The coordinates of the new bridge are  42°34’4.45″N, 130°31’24.16″E. You can see it on Google Maps here. Thank you for the tip, Mr. Cha.

3. There are a couple of more bridges in the area: here (which looks like it has been unused for some time) and here.

4. Photos of the construction opening ceremony are here.

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Posted in Automobiles, China, Economic reform, Foreign direct investment, Google Earth, Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013), Transportation | 6 Comments »

EDZs in North Hamgyong Province

Saturday, June 28th, 2014

According to the Pyongyang Times (2014-6-28):

North Hamgyong Province, together with Rason City which is the first economic and trade zone in the DPRK, is located in the place linking Northeast China, Russia, Japan and other Pacific nations.

It has rich tourism resources including Mt. Chilbo, a celebrated mountain of Korea, and renowned Kyongsong spa. The long east coastline provides it with favourable conditions for the development of fisheries and ocean development industry.

It also has the Kim Chaek Iron and Steel Complex, the Musan Mining Complex and other large industrial establishments and light industry factories, provincial branch of the academy of agricultural science and universities.

The local authorities intend to develop three economic development zones in the province—Chongjin Economic Development Zone, Orang Agricultural Development Zone and Onsong Island Tourism Development Zone—by making the most of these favourable conditions.

The Chongjin Economic Development Zone will focus on metal processing, machine building, building materials, electronic goods, light industry products and export processing, combined with international freight transit transport through Chongjin Port.

It will be developed into a hub of production of secondary and tertiary processed metal products with iron and steel products of the Kim Chaek Iron and Steel Complex, manufacturing of machinery and electronic goods and equipment and bonded processing of hydraulic and precision machinery, robots and road vehicles with processed metal products made at the machine and chemical factories and other industrial establishments.

At the moment the zone development will be orientated to renovating Chongjin Port to boost freight transit transport with Jilin and Heilongjiang provinces of China and neighbouring nations and bonded processing and trade through it, and increasing the proportion of technology-intensive processing industry by relying on the abundant skilled manpower and scientific and technological personnel in the surroundings.

Professor Gu Chaolin at Qinghua University of China, an SEZ expert, said after touring the area that the zone is favourable for investment as it has a solid industrial foundation and many universities around it.

As a typical unit of the northern agricultural areas on the east coast, the Orang Agricultural Development Zone will be developed into a high-efficiency agricultural base that concentrates on agricultural research and production and to which a modern food production cycle combining stockbreeding and fish farming is applied.

It will be a model base of breeding and seed production and a modern intensive stockbreeding centre based on advanced farming for vegetable and flower production including water-saving and no-soil cultivation in greenhouses and a food production cycle embracing animal husbandry and fruit and fish farming.

Additional efforts will be directed to the development of fruit farming by generalizing experiences gained in the building of the agricultural development zone on the trial stage to the nearby areas. Fresh and seawater fish farms and fish processing bases will be built on the shore of Lake Jangyon.

After touring the area, Arnel Casanova, a Philippine SEZ expert commented that it is beneficial to have selected it as an agricultural development zone.

Onsong Island on the Tuman River on the border between the DPRK and China will be built as a hub of commerce combined with tourism.

Foreign investors toured the zones and expressed their willingness to invest in the economic zones.”

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Posted in Economic Development Zones (2013), North Hamgyong Provincial Chongjin economic development zone, North Hamgyong Provincial Onsong island tourist development zone, North Hamgyong Provincial Orang agricultural development zone, Special Economic Zones | Comments Closed

Data on Kaesong’s cumulative performance

Thursday, June 12th, 2014

According to Yonhap:

Cumulative production of the inter-Korean industrial park has come to US$2.3 billion as the most salient outcome of rapprochement between the Koreas marks its 10th anniversary of operations this week, the unification ministry said Thursday.

The joint factory complex in the North Korean border town of Kaesong opened a decade ago following the first inter-Korean summit meeting in 2000, in which their leaders adopted a joint declaration calling for closer cooperation and exchanges.

On June 14, 2004, a group of 15 South Korean groups signed contracts to operate factories in the then-newly built complex, inaugurating the era of the Kaesong Industrial Complex. In December that year, the joint complex saw its first batch of goods produced in its factories.

In the first full year of operations in 2005, annual output reached $14.9 million before jumping by more than 30-fold to $469.5 million in 2012, according to the unification ministry.

But yearly output nearly halved last year from 2012 after Pyongyang suspended operations of the Kaesong complex for five months from April amid inter-Korean tensions. The figure rose to $168.1 million in the first quarter of this year.

The value of inter-Korean trade through the park came to an accumulated $9.45 billion, according to the ministry.

A total of 940,000 people have visited the inter-Korean economic zone, with 125 South Korean firms currently operating in the complex designed to match deep-pocketed South Korean companies with cheap North Korean labor.

Among the firms, 73, or 58.4 percent, are textile firms, while another 24 firms are machinery or steel makers. The complex is also home to 13 electronics makers and 9 chemicals firms, the ministry noted.

The Kaesong complex also saw the number of North Korean workers grow from around 6,000 in 2005 to 52,000 as of recently, along with monthly salary more than doubling from $50 to more than $130.

Although this story reports salaries of $130, a separate story released just a couple of days ago claims the monthly incomes are just $70. I am not sure why the discrepancy.

Read the full story here:
Cumulative output of Kaesong park reaches US$2.3 bln
Yonhap
2014-6-12

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Posted in International trade, Kaesong Industrial Complex (KIC), South Korea, Statistics, Trade Statistics | Comments Closed

German firm to set up in Kaesong Zone

Tuesday, June 10th, 2014

According to the Wall Street Journal:

A German industrial needle maker will open an office in the joint inter-Korean industrial complex inside North Korea, South Korea said Tuesday.

The move will mark the first non-Korean business entity inside the plant but falls short of Seoul’s goal to bring in manufacturing operations from foreign companies to help ensure North Korea doesn’t unilaterally close the complex again.

The plant was shuttered for five months last year after Pyongyang withdrew its labor force during a sharp escalation in threatening rhetoric. Seoul officials in recent years have mulled over the possibility of attracting foreign companies, which they say would help the factories run without interruption.

Seoul’s Unification Ministry, which handles inter-Korean affairs, said Groz-Beckert, a maker of industrial needles and other tools for textile manufacturers, will open a sales office inside the facility, located a few miles north of the border. The ministry didn’t specify a schedule.

Here is coverage in AFP.

Here is coverage in Voice of America.

Read the full story here:
German Firm to Open Sales Office Inside North Korean Complex
Wall Street Journal
Jeyup S. Kwaak
2014-6-10

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Posted in Economic reform, Foreign direct investment, Germany, Kaesong Industrial Complex (KIC) | Comments Closed

Seoul to raise wages of Kaesong workers (2014)

Monday, June 9th, 2014

The actual headline should read “Seoul increases payments to DPRK goverment by 5% for each Kaesong worker” since it is no secret that “employees” receive little if any of their wages.

According to Yonhap:

South Korea will hike the salary of North Korean workers at an inter-Korean industrial complex by 5 percent from this month, the unification ministry said Monday.

The wage hike came after the two Koreas made the agreement about three months earlier than their usual annual wage talks for July.

The countries had annually agreed to a 5 percent wage increase in July, which starts to take effect from August, but this year’s earlier-than-usual wage hike came after the workers missed their annual hike last year due to a temporary suspension of the complex in the North Korean border town of Kaesong.

Amid worsening inter-Korean tension, Pyongyang had suspended the operations of the Kaesong Industrial Complex for five months from April.

The latest 5 percent hike in the North Korean workers’ minimum wage takes effect from their May salary, to be paid in late June, according to the Unification Ministry.

The two sides “agreed to hike the North Korean workers’ wage at the Kaesong Industrial Complex to US$70.35, an increase of 5 percent from now,” unification ministry spokesman Kim Eyi-do said in a briefing.

“So far, the minimum wage had been raised from August, but (we) decided to bring it forth by three months this year in consideration of (South Korean) companies’ opinions at the complex,” Kim said.

Citing the absence of a wage hike last year, Pyongyang had demanded a 10 percent wage hike this year.

About 52,000 North Korean laborers are employed by more than 100 South Korean companies operating in the joint factory park, a major cash cow for the communist country. Each North Korean worker receives up to $150 in monthly wages, including social benefits and overtime.

Read the full story here:
Seoul to raise salary of N.K. workers at Kaesong complex
Yonhap
2014-6-9

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Posted in Kaesong Industrial Complex (KIC), Labor conditions/wages, Special Economic Zones (Established before 2013) | 1 Comment »

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