Special Economic Zones (Established before 2013)

Archive for the ‘Special Economic Zones (Established before 2013)’ Category

Recent CRS reports on the DPRK

Tuesday, October 7th, 2014

The Congressional Research Service “recently” published two reports which relate to the DPRK:

The U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implementation
September 16, 2014: 2014-9-16-KORUS-Kaesong
June 2, 2011: Imports-from-North-Korea-2011

(Although this report focuses mostly on US-ROK issues, there is detailed discussion of the complex negotiations around the Kaesong Industrial Complex (KIC).)

Iran-North Korea-Syria Ballistic Missile and Nuclear Cooperation
April 16, 2014: 2014-4-16-Iran-Syria-Missile

You can download most former CRS reports dealing with the DPRK here.

Posted in Arms shipment, Illicit activities, International trade, Iran, Kaesong Industrial Complex (KIC), Syria | Comments Closed

Kaesong Industrial Complex: One year after resuming operations

Friday, September 26th, 2014

Institue for Far Eastern Studies (IFES)

The Kaesong Industrial Complex (KIC) was reactivated on September 16, 2013 after a five-month shutdown due to North Korea’s withdrawal of North Korean workers from the complex. One year has passed without interruption of operations. However, while most of production activities were resumed to pre-shutdown levels, previously discussed agreements between the two Koreas are not meeting expectations in terms of transportation, customs, communications, security for personnel and vehicles, upgrades to meet international standards, and normalization for development of the KIC.

The tentative suspension of the KIC lasted from April 8 to September 16, 2013. During this period, all aspects of both production and export were frozen completely. After restarting operations, gradual progress was made, with production in October 2013 down only 32.7 percent compared to March of the same year (pre-suspension), totaling approximately 30.8 million USD. By May 2014, average monthly production totaled nearly 42.8 million USD, showing a strong recovery to a total of 93.5 percent of pre-suspension production capacity.

After resuming operations, companies at the KIC experienced problems such as loss of capital, cancelled contracts by buyers, order quantity reduction, and other problems which caused uncertainty about the future of the complex. In spite of this, companies at the complex were quickly able to recover due to their own efforts and the support of various related organizations.

However, since the reactivation, not much progress has been made toward achieving the goal of “developmental normalization” of the KIC. This goal is aimed at expanding and improving the complex through cooperation between the two Koreas. Agreements have been made between the North and South to work together to make the complex better than it was before the shutdown by solving several issues related to safe entry and stay of personnel; transportation, customs, and communication in the KIC; and internationalization of the complex.

For some time after restarting operations, the agreements between the North and South were actively being pursued, and the process of developmental normalization progressed steadily. In January 2014, construction of the Customs, Immigration and Quarantine (CIQ) facilities were completed alongside the implementation of a Radio Frequency Identification (RFID) electronic entrance system, and in the following month, progress was made on agreements related to the provision of an Internet service at the KIC.

Furthermore, the joint North-South Commercial Arbitration Committee was created. In March 2014, the committee had its first meeting, which dealt with commercial disputes arising at the complex. Recently, over twenty companies from the United States, Germany, China, Russia and other countries have made inquiries to the South Korean government with regard to investing in the KIC. The Foreign Investor Support Center was also opened to attract and manage investments from abroad.

However, due to the joint ROK-US military exercises, inter-Korean relations have become strained. North Korea also has taken a passive stance toward the Kaesong agreements, leading to a situation where no real progress has since been made. South Korea has been calling out for a subcommittee in order to enforce the RFID card system, continue discussion on the introduction of Internet service, and address the problems of passage, communication and transport at the complex. Seoul has been demanding continuously for North Korean authorities to cooperate on these issues.

Posted in Kaesong Industrial Complex (KIC) | Comments Closed

DPRK holds investor forum in Dalian

Monday, September 22nd, 2014

According to the JoongAng Ilbo:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here is additional coverage in the Choson Ilbo.

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

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

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

Posted in China, Economic Development Zones (2013), Economic reform, Foreign direct investment, Mt. Kumgang Tourist Special Zone, Special Economic Zones, Wonsan-Mt. Kumgang International Tourist Zone | Comments Closed

Rason Port gets competition from Zarubino Port

Thursday, September 11th, 2014

Pictured above (Google Earth) the relative locations of Rason and Zarubino Ports

According to Port Technology International:

China and Russia are to join forces and morph Russia’s Zarubino Port into one of the biggest ports in northeast Asia, according to the Chinese People’s Daily.

Zarubino Port is at the far south-eastern tip of Russia and a stones throw from North Korea, and only 18km from China.

North-east China’s Jilin province and Russia’s Summa Group reportedly signed a joint-agreement concerning the rejuvenation of the port at the fourth Conference on Interaction and Confidence-Building Measures in Asia (CICA), in Shanghai in May, 2014.

It is planned that the Zarubino Port will have the ability to handle 60 million tonnes of cargo once construction is completed.

ECNS, an English-language Chinese news source, reported a Summa deputy president as stating the planned port will be multifunctional, and is intended to “hugely benefit China and Russia”.

The port will be used to serve as a key port in ensuring the security of food provisions.

Choson Exchange on HGP master plan

Saturday, August 30th, 2014

Choson Exchange posted a picture taken of a billboard in China that shows the master plan for the development of Hwanggumphyong (HGP) Economic Zone.

Click image for larger version, or visit Choson Exchange here

Here are larger photos of the same billboard:

As was revealed in Andray Abrahamian’s report “The ABCs of North Korea’s SEZs“, there is a new construction project underway at the Hwanggumphyong SEZ:

It is not known for sure what this building is just yet, but it seems to fall within the “Finance Area” of the master plan.

Posted in China, Construction, Foreign direct investment, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Special Economic Zones (Established before 2013) | 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.

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

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

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

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:

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.

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 »

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

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

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