Archive for the ‘Hwanggumphyong and Wihwado Economic Zones (Sinuiju)’ Category

China’s Xi promised funding for bridge connections in North Korea, reports say

Tuesday, July 30th, 2019

By Benjamin Katzeff Silberstein

This is quite interesting, and hardly surprising. Overall, I’ve seen very little to suggest that China regards the current sanctions pressure as anything but a temporary measure. That would fit the historical pattern well. (For more on this, feel free to check out my chapter on Trump’s “maximum pressure” strategy and its impacts on the North Korean economy.) This time is very different because of the longevity and extent of the Chinese sanctions pressure, but in nature, I don’t believe China’s medium- to long-term strategy on North Korea and sanctions has changed. Talk of China “abandoning” North Korea, which used to be rife when Chinese trade data on North Korea pointed in a downward direction, has often been and remains much overblown.

The news is that Xi Jinping, during his June visit to North Korea, supposedly promised that China would fund facilities on the North Korean side of the new-ish border bridge between southwestern Dandong, as well as fund work on the Hwanggumpyong SEZ. Asahi Shimbun:

China has promised to foot the bill for the construction of related facilities for an already-completed bridge across the border between China and North Korea, sources said.

Chinese President Xi Jinping made the pledge when he visited North Korea in June, they said.

During the visit, Xi also promised that China will promote construction of an economic development zone on North Korea’s Hwanggumpyong Island in the Yalu River, which forms a natural border between the two countries, the sources added.

Construction of the bridge and the economic development zone were agreed on when former North Korean leader Kim Jong Il was still alive. But the projects were effectively frozen after his son and successor Kim Jong Un became the country’s leader.

Xi’s willingness to pay the costs of building an access road to the bridge on the North Korean side of the border, as well as customs-related facilities, suggest that economic relations between the two neighbors are moving to a firmer footing.

According to sources knowledgeable about trade between the two countries and those with links to North Korean authorities, Xi’s promises were conveyed to high-ranking North Korean government officials during meetings to report on the outcome of a summit meeting between the two countries.

Xi’s largesse was also shared in the North Korean military as it will be involved in the construction of bridge-related facilities as well as the economic development zone.

The New Yalu River Bridge connects Dandong in China with Sinuiju in North Korea. Although the bridge has been completed, it is not yet open to traffic.

China will provide about 2.5 billion yuan (39 billion yen, or $360 million) for the construction costs. Chinese engineers have been conducting field surveys since late June.

Since around that time, the upper parts of the bridge have been lit up at night.

In mid-July, cars carrying Chinese government officials traveled to a border gate in the middle of the bridge.

Construction of the bridge started in 2011 when Kim Jong Il was in power. China spent about 1.8 billion yuan in construction costs. The bridge was completed in 2014 under Kim Jong Un’s regime.

Source:
China to fund costs so bridge to North Korea can open to traffic
YOSHIKAZU HIRAI
Asahi Shimbun
2019-07-29

On the North Korean side, the bridge has been lacking a connection to the broader road network (or to anywhere, really) since construction began in 2011, as these pictures show:

The new Yalu river bridge, October 1st, 2011. Image from Google Earth/Digital Globe.

The new Yalu river bridge, March 2nd, 2019. Image from Google Earth/Digital Globe.

Overall, this emphasizes the reality that China really is the only country that North Korea has close, substantive and sustainable trade links with. It was truly unlikely that Xi’s visit to North Korea would occur without any promises for economic benefits or the like. Kim Jong-un’s visits to China have rendered similar benefits, though perhaps not of the same economic magnitude.

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Renewable energy power plant for Sinuiju modernization project

Friday, June 21st, 2019

Benjamin Katzeff Silberstein

Daily NK reports:

“A massive renewable energy power plant was built to deal with the chronic lack of electricity in North Pyongan Province,” a source in North Pyongan Province told Daily NK. “The power plant now supplies Sinuiju and other areas of the province.”

Meari, a North Korean propaganda outlet, published an article on June 2 entitled “The Construction of a Renewable Energy Power Plant that Produces 1,000 kW by the North Pyongan Province Electricity Department.”

The article states that a “renewable energy power plant was built on around a 300 square meter lot on the lower part of the Yalu River” and that “The Electricity Department built around 3,600 solar panels, electricity transformers, and electric cables to ensure the continued, self-sufficient supply of electricity.”

The source told Daily NK that the Workers’ Party of Korea (WPK) and government officials in North Pyongan Province made the decision to embark on the construction of the new power plant. Officials emphasized the use of renewable energy and new ways to supply electricity to the province.

A separate source in North Pyongan Province said that the decision to move forward with the project led to the construction of an “electricity base” with wind power and solar panels in the Sinuiju area.

“They are now moving forward with expanding the existing infrastructure by four-fold,” he said.

[…]

The Rodong Sinmun published an article on March 20 entitled “Let’s Imitate Them [North Pyongan Province’s Electricity Department] and Widely Develop and Use Renewable Energy.” The article states that the Electricity Department in North Pyongan Province “recently constructed a massive renewable energy power plant that is supplying electricity to important areas in Sinuiju and the local people.”

Source:
Renewable energy power plant built for Sinuiju modernization plans
Mun Dong Hui
Daily NK
2019-06-21

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China Railway Investment Group

Tuesday, August 11th, 2015

According to NK News:

A Chinese-state affiliated and Singaporean investment group, the latter of which is allegedly directly connected to the DPRK, is calling for large-scale investment in 12 projects spanning nearly every major sector in North Korea, from transport to mining to internet and cable television development.

The ambitious plans, outlined in an August 2 press release from China Railway Investments Group, welcome foreign participation in 12 “world class opportunities” in North Korea.

“The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong,” the press release says.

The joint venture, called Heuimang Investments Group Limited, will be capable of providing a “direct and exclusive conduit to the highest levels of decision making in the government of the DPRK,” the release continues. “Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.”

Here is a PDF of the press release posted to the China Railway Investment Group Web Page.

Here is the full text:

韩旺投资集团有限公司
Heuimang Investments Group Ltd (In Chinese pinyin Han Wang Touzi Jituan Youxian Gongsi)
公告 Announcement:
发布时间:2015-8-2

朝鲜民主人民共和国(朝鲜)致力于大力推进其经济发展,并欢迎外国投资参与该国的世界级的机会, 促进经济发展.
The DPRK is committed to progressing its economic development, and welcomes the participation of foreign companies in investing in world class opportunities in the country.

朝鲜欢迎中国的公司投资参与. 朝鲜通过它在新加坡注册的窗口公司Daegian 私人有限公司, 与中铁多经投资集团有限公司合作在香港建立了融投资平台—招商公司.
The Democratic People’s Republic of Korea (DPRK) through its window company Daegian Pte Limited of Singapore in cooperation with China Railway Investments Group Ltd (CRIG) has established a joint venture investment company in Hong Kong.

朝鲜政府已正式批准Daegian 与中铁多经投资集团有限公司(CRIG)合作成立旺投资集团有限公司.
The DPRK Government has formally approved the joint venture between Daegian and CRIG and their joint venture company called Heuimang (or Han Wang in Pinyin Chinese) Investments Group Limited.

Daegian和韩旺是朝鲜”走出去“、”引进来“的直接和专属通道,是朝鲜政府最高等决策层的直属机构. 只有最显著的机遇将可通过这一渠道,而且只能通过韩旺办理.
Daegian provides a discrete, direct and exclusive conduit to the highest levels of decision making in the government of the DPRK. Only the most significant of opportunities will be available through this channel which can only be accessed through Heuimang/Han Wang.

朝鲜决定与中方共同搭建经贸等合作更方便更快捷的工作平台,利用香港的优势宣传推广、项目招商、商务服务,支援朝鲜建设。韩旺将在中朝两国间发挥经贸合作的强大和充满活力的桥梁作用.
Heuimang/Han Wang will concentrate on creating a strong and robust platform for economic and trade co-operation between the countries. It will also take advantage of the flexibility afforded to a commercial entity registered in Hong Kong.

各方股东及合作公司将依照国际法和国际惯例运作,在透明的基础上配套韩旺发展.
All parties to this joint venture are committed to supporting Heuimang/Han Wang in operating on a transparent basis within international laws and practices.

其主要目标是优势互补、资源共享、利益均沾、合作共赢、商业运作.
The primary objective is commercial engagement through mutual cooperation for shared benefit.

里程碑:
Milestones:

2015年1月29日: 中铁和Daegian 签订了框架合作协议, 其中确定了互惠和显著利于中国和朝鲜,尤其是基础设施发展的若干项目. 通过韩旺, 中铁致力于引领中国企业组成的联合体参加朝鲜民主人民共和国的经济和基础设施发展.
January 29, 2015: CRIG and Daegian executed a framework cooperation agreement which identified certain projects of mutual and significant benefit to China and the DPRK, particularly infrastructure development. CRIG is committed to lead through Heuimang/Han Wang a consortium of investors from China to participate in the economic and infrastructure development of the Democratic People’s Republic of Korea.

2015年3月20日:中铁和Daegian签署公约设立融投资控股公司,以协调和管理投资朝鲜.
March 20, 2015: CRIG and Daegian signed a convention to establish an investment holdings company to coordinate and manage investment in the DPRK.

2015年4月8日: 朝鲜政府的执行委员会正式批准为创建韩旺作为的中铁和Daegian 之间的合作平台公司.
April 8, 2015: The Executive Committee of the DPRK Government granted formal approval for the creation of Heuimang/Han Wang as the joint venture company between CRIG and Daegian.

这是中国- 朝鲜最高领导人讨论2010年5月的巅峰之作, 于经贸合作,成立一个指导委员会,共同开发和管理提名的项目, 包括特别经济贸易区.
These represent the culmination of China-DPRK economic and trade cooperation discussions dating back to May 2010, when the top leaders of both countries established a steering committee to jointly develop and manage nominated projects,including special economic trade zones.

基本的经济发展计划是底层要求支持能力建设,机构规划和物流相关立法的起草工作。此外,为提高海关程序,通信和赞助农业和其他指定项目在朝鲜.
Fundamental to the programme is the underlying requirement to support capacity building, institutional planning and logistics and the drafting of relevant legislation. Also, to improve customs procedures, communications and sponsor agriculture and other specified projects in the DPRK.

中国和朝鲜都致力于取得进展的合作和友谊通过鼓励基于一个企业的市场经济的互利两国人民.
China and the DPRK are committed to progressing their cooperation and friendship by encouraging an enterprise based market economy for the mutual benefit their two peoples.

韩旺利用中国政府鼓励中国企业“走出去”、以及建立境外经济贸易合作区的各种优惠政策,支持朝鲜建设,开发前述项目。
In supporting the DPRK in the development of the nominated projects (see below), China Railway will be taking advantage of the preferential policies of the Chinese Government’s ‘Go Global’ strategy and its model of ‘co-operation between nations’ to create Economic and Trade Cooperation Zones.

提名项目:
Nominated Projects:

下面的项目已被选定为首批发展:
The following have been selected for initial development:
1. 罗先经济贸易区等经济贸易区
Rason Economic Trade Zone and other Special Economic Trade Zones
2. 罗津港, 运输和物流
Rajin Port, Transport and Logistics
3. 东海岸高铁和互连服务
East Coast High-speed Rail and interconnecting services
4. 发电厂和服务
Power Generation
5. 国家石油和天然气战略计划,包括
National Oil and Gas Strategy, including
a. 现有的两个炼油厂和技术升级翻新
Refurbishment of the two existing refineries and technological upgrade
b. 更多的处理能力,存储和仓储设施建设,以满足当地和出口需求
Construction of more processing capacity and storage and warehousing facilities to meet local and export demand
c. 贸易销售和市场营销
Trade sales and marketing
d. 勘探和开采当地资源
Exploration and exploitation of local reserves
6. 黄金开采和加工;以及建立金银行
Gold mining and processing; and establishment of a gold bank
7. 稀土的开采和加工
Rare earth elements mining and processing
8. 金属和矿物开采和加工,包括:
Metals and minerals mining and processing including:
a. 铁钢 Iron and steel
b. 锌Zinc
c. 钨Tungsten
d. 锡Tin
e. 菱镁矿 Magnesite
f. 石墨 Graphite
g. 煤Coal
9. 电信和有线电视
Telecommunications & cable television
10. 互联网服务, 国家经济信息电子中心及电子支付平台
Internet services, a national information centre and electronic payment platforms
11. 金融服务,包括一个完整的商业全服务银行和保险
Financial Services including a full commercial full services bank and insurance
12. 农业包括菌草种植, 牛羊养殖和捕鱼,
Agriculture including bacteria grass, sheep and cattle breeding and fishing
和等项目,招商引资开发.

附加信息:
Additional Information:
罗先经济贸易区和罗津港: 由罗先经济合作局管理,位于朝鲜北东部,毗邻中国吉林省延边地区. 罗先的主要商业机会是罗津港,该港作为主要的物流和交通枢纽为东北亚的潜力. 中国、俄罗斯、蒙古承认其优点,罗津港可提供最北端的全年温水冷冻自由港. 俄罗斯和蒙古已经从罗津港运送大宗商品,通过铁路连结由俄罗斯建造的港区.
The Rason Economic Trade Zone and Rajin Port: is managed by the Rason Economic Cooperation Bureau, located in the North-East of DPRK, adjacent to the Yanbian area, Jilin province, China. The major commercial opportunity in Rason is the potential that Rajin port offers as a major logistics and transport hub for north-east Asia. China, Russia and Mongolia acknowledge the advantages that the northern most all-year round port can provide. Russia and Mongolia are already shipping bulk commodities from Rajin through a railway link built by Russia.

拟议的铁路连接新丝路网络,将为中国东部、俄罗斯、韩国、日本, 进入中亚欧洲及其他新兴经济体. 一个便捷的陆路货物通道,这将减少旅行时间只需15天,而不是原来45天的海上运输,太有吸引力了, 区域商家不能忽视.
A proposed rail connection to the New Silk Road network will provide Eastern China, Russia, South Korea and Japan access to the emerging economies of Central Asia and Europe beyond. A land route for the transport of goods that will reduce travel time to just 15 days as opposed to 45 days by sea will be too attractive for regional manufacturers to ignore.

罗先的潜力作为一个主要的工业和商业中心,是由计划的石油和天然气管道从西伯利亚到韩国釜山而增强. 坐落在通往发展最快、最具活力的世界经济区域上,它是一个可预见的展示,可以肯定的未来,罗先会成为最重要的区域之一。
Rason’s potential as a major industrial and commercial centre is further enhanced by the planned oil and gas pipeline from Siberia down to Pusan in South Korea. Situated as it is at the gateway to the fastest growing and most dynamic economic region in the world, it is a virtual certainty that Rason will become one of the most important cities in the region.

有许多小到中型中外合资企业已经建立在罗先. 这是肯定的, 由于贸易的增加, 这将很快被更大的企业来加盟。
There are many small to medium sized foreign joint ventures already established in Rason, which will soon be joined by larger enterprises that will inevitably follow as trade increases.

中国企业有数十家与朝鲜公司在进行经济和贸易活动,在建材、食品加工、机械、金融、投资、物流等领域谈判合作。交通运输集团,中国铁建集团,中国招商局集团,亚洲集团等大型企业纷纷表示了在罗先经贸等各领域的兴趣.
Dozens of Chinese enterprises are in negotiations with North Korean companies for economic and trade activities in building materials, food processing, machinery, finance, investment, logistics and other fields. Transportation Group, China Railway Construction Group, China Merchants Group, the Asian Group and other large enterprises have expressed interest in the Rason economic and trade areas.

中国的北大荒集团在朝鲜建立了一个高效的农业科技示范园区500公顷的水稻种植实验.
The Beidahuang Group of China set up a highly efficient agricultural demonstration zone, 500 hectares of rice growing experiments.

该商业机会将只能通过韩旺可用.
The commercial opportunities will only be available through Heuimang.

朝鲜国家石油和天然气战略: 是赖以投资者可以利用朝鲜的优越位置,并推出营销活动成为东北亚地区的重要平台。朝鲜有两个炼油厂,其中只有一个目前正在运作。
DPRK’s National Oil and Gas Strategy: is the platform upon which investors could take advantage of the DPRK’s location and launch a marketing campaign into north-east Asia. The DPRK has two refineries only one of which is currently operational.

在新义州的蓬华炼油厂每年生产的柴油和汽油约150万吨, 这是满足本地区的需求远不够的. 该炼油厂坐落在一个很好的位置,跨过鸭绿江丹东,那里有一个油码头和管道组成的国际网络的支线
The Bungwha [Ponghwa] Refinery in Sinuiju [Note: it is in Phihyon, not Sinuiju] produces about 1.5 million tonnes of diesel and gasoline a year which is well below local demand. It is well situated across the Yalu River from Dandong where there is an oil terminal and a spur line of an international network of pipelines.

韩旺拥有的授权权利,新指定的特殊经济贸易区,位于在鸭绿江河口的新都岛。这里是理想的建立一个油库和新的处理设施之地.
Heuimang holds rights to a newly designated special economic trade zone which is Sindo Island in the Yalu estuary. The site is ideal to create a tank farm and new processing facility.

罗先的胜利炼油厂在东北部,已有20多年经营,现停止,由于缺乏原料和适当保养及维修。它最初被设计为每年生产各种石油化工产品2.0万吨。罗津和罗先潜力将见证燃料和某些石化产品必须满足该地区日益增长的需求.
The Seungri Refinery in Rason in the north-east, has been silent for 20 years for a lack of feedstock and proper maintenance and repairs. It was designed to produce 2.0 million tonnes a year of a variety of petrochemical products. The potential that is Rajin/Rason will see a growing demand for fuel and certain petrochemical products in the region which must be met.

金属和矿物: 矿产开采和加工是朝鲜经济的支柱. 通过韩旺的国家协议的过程中,任期安全是有保证的,因为它的设计满足国际融资需求。有铁矿石,煤,金,菱镁矿,石墨,稀土元素和许多世界级的沉积物。
Metals and Minerals: mining and processing is the backbone of the DPRK economy. There are world class deposits of iron ore, coal, gold, magnesite, graphite, rare earth elements and many more. Through Heuimang’s state agreement process security of tenure is assured as it is designed to satisfy international financing requirements.

详细信息,请联系:
For more information, please contact:

(1) 与中铁投资集团有限公司, 主席, 王先生
Mr. Wang Jing, Chairman of China Railway Investments Group Ltd
电子邮件Email: [email protected]

(2) Daegian 私人有限公司, 主席, Rudi Sirr先生
Rudi Sirr, Executive Chairman of Daegian Pte Ltd
电子邮件Email: [email protected]

(3) 韩旺投资集团有限公司, 首席执行官, 沈思翠小姐
Jyn Sim Baker, Chief Executive Officer of Heuimang Investments Group Limited
电子邮件Email: [email protected]

Here is additional reporting in NK News and by Marcus Noland.

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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.

HGP-master-plan-choson-exchange

Click image for larger version, or visit Choson Exchange here

Here are larger photos of the same billboard:

Choson-exchange-2014-HGP-map-1

Choson-exchange-2014-HGP-map-2

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:

HGP-construction-Google Earth-2014-9-24

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.

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DPRK – China trade: What is happening?

Friday, April 4th, 2014

Previous reports indicated that the execution of Jang Song-thaek has to date had little effect on DPRK-China trade. According to the Institute for Far Eastern Studies (2014-3-12):

Trade between North Korea and China in January has increased roughly 16 percent against the previous year. After the December 2013 purge of Jang Song Thaek it was predicted that trade between the two countries would decrease; however, there is no visible sign of this yet.

According to the Korean Foreign Trade Association’s* data, trade between North Korea and China in February increased from 471 million USD to 546 million USD, up 15.9 percent compared to the previous year.

February also showed an increase in anthracite exports, North Korea’s main export to China, rising 21.3 percent to 102 million USD. Iron ore exports also showed a slight increase of 35 million USD compared to last year.

Chinese exports to North Korea, including leading export commodities such as cellular phones and other wireless radio/communication devices, increased 28 percent compared to January of last year, totaling 14.5 million USD. In February, goods exported through China to North Korea increased by 10.2 million USD, a 38.6 percent increase compared to January of last year.

The trade gains in this report are annual for the most part…comparing 2013 data with 2014 data. This reveals little about the change in trade volume from month to month.

Now a story in Yonhap offers January and February 2014 data, and journalists have reached the opposite conclusion. Jang’s execution has played a role in DPRK-China trade. According to the article:

“In January and February this year, North Korea significantly stepped up checks on its coal exports to China,” a source in Beijing said on the condition of anonymity.

“Such reinforced checks appear to be related to the execution of Jang Song-thaek,” the source said.

According to the latest data by the Korea International Trade Association* in Seoul, North Korea’s exports of coal to China in February fell 26 percent from a month ago to 920,000 tons. The North’s exports of iron ore to China also fell 23 percent in February from a month earlier to 197,000 tons.

The North’s total trade with China in February plunged 46 percent from a month earlier to US$255 million, the data showed.

In Dandong, the Chinese border city with North Korea where about 80 percent of bilateral trade is conducted, the flow of goods in and out of North Korea appears to be affected by the execution of Jang.

“In previous years, the North Korean authorities had usually set their annual targets for exports and imports, and given quotas to trading firms,” said another source in Dandong who is doing businesses with North Korea. “But, no quota has been given yet this year.

“Obviously, the mood is different than previous years,” the source said.

No progress has been made on special economic zones, including Hwanggumphyong and Wihwa, set up by the North on the border with China, according to the source.

“Under the current circumstances, Chinese investors will not invest in the North’s special economic zones,” the source said.

Does this mean anything?  Well, we don’t know enough about these numbers, or the cause for such dramatic change in trade patterns, so we will need to continue to watch the data.  Even before the February numbers came out, Scott Snyder reminded us that DPRK-China trade has taken a dip between January and February for each of the last three years!

Snyder-DPRK-China-Trade-2011-2013

Then there are the caveats: 1. This only counts legitimate trade (no illicit, secret, or military trade) 2. No aid 3. No official or unofficial transfers 4. No capital flows.

*Presumably the Korean Foreign Trade Association and the Korea International Trade Association are the same thing.

Read the full Yonhap story here:
N. Korea’s trade with China shaken after Jang’s execution
Yonhap
2014-4-4

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Choe Hyon Chol on Rason development

Wednesday, March 26th, 2014

According to Naenara, Choe Hyon Chol is the section chief of the State Economic Development Commission (SEDC). He has previously been identified as a director of the Korean Association of Economic Development. In a recent interview with Naenara, he discusses the benefits of investing in the Rason Economic and Trade Zone.

Before getting to the interview, however, it is worth noting that the Rason Economic and Trade Zone was set up before the creation of the State Economic Development Commission and it was “controlled” by Jang Song-thaek. Since Jang’s purge, it appears that Rason (and probably Hwanggumphyong) have been moved to the SEDC’s portfolio–that is, under the control of the cabinet.

Here is the interview:

Reporter: Would you please give me a briefing on the Rason Economic and Trade Zone that is now under development.

Choe: As you know, northeast Asia becomes one of the global development regions with a great potentiality, for the countries in this region have comparative advantages in respect of availability of production factors such as economic conditions, natural resources and economic and trade relations.

The Rason Economic and Trade Zone, situated on the western shore of the lower Tuman River in the northeastern part of Korea, borders on China and Russia, and Japan with the sea on the east. Its geographical location offers immense economic and traffic advantages as a transportation hub as well as a bridgehead of the continent.

Occupying an area of 470 km2, it has Rajin Port with an annual handling capacity of 3 million tons of cargoes, Sonbong Port with a handling capacity of 2 million tons of oil and Ungsang Port with a handling capacity of 600 000 m3 of timbre. The sea off the ports is deep and not frozen even in winter.

Rajin Port, in particular, has favourable conditions for creating cargo handling capacity of over 100 million tons without building a breakwater thanks to the Taecho and Socho islands in front of it.

The zone has also advantageous traffic connections with neighbouring countries.

Rajin-Wonjong class-B road (51 km), Rajin Port-Tumen railway (158 km) and Rajin Port-Khasan railway (51 km) are under construction or nearing completion.

The Rason Economic and Trade Zone is endowed with abundant tourist resources such as beautiful seascape, lake and bathing resorts, and 20-odd islands including Pipha, Taecho, Socho and Al islands.

In view of these favourable geopolitical and economic conditions, the DPRK government declared Rason city as an economic and trade zone on December 28, 1991 and held an international investment seminar with participation of entrepreneurs from 27 countries under the sponsorship of the UNDP and UNIDO in September 1996. It also raised Rason city to the status of special city on January 4, 2010 and agreed with China on the issue of joint development and management of Rason Economic and Trade Zone and Hwanggumphyong-Wihwado Economic Zone in May 2010.

In November 2010 the DPRK and the Chinese governments signed the Agreement on Joint Development and Management of Rason Economic and Trade Zone and Hwanggumphyong-Wihwado Economic Zone and organized the DPRK-China Joint Guidance Committee. The second session of the committee was held in June 2011 in Yanji, Jilin Province, China and its third session in August 2012 in Beijing. Besides, both governments concluded the agreement on establishment and operation of management committee for Rason Economic and Trade Zone, the master plan for DPRK-China joint development of the zone, the framework agreements on investment in ports, industrial districts and power transmission within the zone and investment and cooperation for construction of a new border bridge between Wonjong and Quanhe, the agreements on investment and cooperation for a high-efficiency agricultural model district and investment and cooperation for building-materials industry and the master plans for Sonbong-Paekhak industrial district and Rajin port industrial district.

The development of the zone in which a hundred and scores of businesses from different countries of the world are now active is in its initial stage but the number of potential investors with exceptional interests in the zone is increasing as days go by.

Reporter: How is the present state and prospect of the zone?

Choe: I shall begin with the progress of city construction.

The city is divided into residential quarters, industrial district and traffic junction district. The residential quarters consist of economic and trade area and peripheral area; the economic and trade area is subdivided into Rajin, Sonbong, Ungsang, Kulpho-Uam and Chonghak areas and the peripheral area into Tumangang, Hongui, Wonjong and Huchang areas. The industrial area embraces Changphyong, Yokjon, Chonggye, Sinhung, Tongmyong, Namsan and Andong areas.

The traffic junction district includes Rajin, Sonbong and Ungsang ports, Rajin, Ungra and Sonbong railway stations and Chongjin-Wonjong and Chongjin-Tuman River roads.

The Rajin Port, a transit trade port, is the hub of international cargo transit transportation and transport of exports and imports of entrepreneurs who invested in the zone.

The port has assignments to transport marine products for export from the East Sea of Korea and every kind of cargoes from and to northeast area of China and Far East Region of Russia.

The Rajin Port consists of three wharves; wharf No. 1 is designed to be renovated and operated by China Dalian Chuang Li Co., Ltd. and wharf No.3 by Rason International Container Transport J. V. Company to be set up according to the contract with Russian Rail Trade Co., Ltd.

The project of Rajin-Wonjong road started in April 2011 and completed in October 2012, and the power transmission project is now under way.

Currently, three railways run through Rason.

In the whole section of the Pyongyang-Tumangang line, standard gauge track

(1,435 mm) is laid from Pyongyang to Rajin and combined-gauge track with standard gauge and broad gauge (1 520 mm) from Rajin Railway Station to Tumangang Railway Staion, leading to Khasan Railway Station.

The updating project of Rajin-Namyang railway has been agreed with China in October 2012 and the construction of Sonbong-Paekhak industrial district, building materials industrial district, high-efficiency agricultural model district and Wonjong-Quanhe border bridge is in full swing.

When the construction projects of power line, railways, ports and border bridge are brought to completion, the Rason Economic and Trade Zone will be turned into a promising economic and trade zone of the world standard.

Next, tourism is booming in this zone.

Rason has eight bays and 21 islands, big and small.

There are Pipha, Chujin and Kalum Headland tourist attractions furnished with hotels, restaurants and sea bathing grounds along the coast.

Rason abounds in natural monuments, mineral water, spring water and marine products, and sea birds and coastal scenery strike tourists with admiration.

As mentioned above, the Rason Economic and Trade Zone is a special economic zone equipped with all conditions favourable for preferential trade and investment, transit transportation, tourism and financial and service businesses.

The DPRK government is constantly encouraging foreign investors to invest in intermediate trade, industry, agriculture, construction, transport, communications, science and technology, tourism, service and finance.

Today the development prospect of the zone is optimistic.

We are looking forward to an active investment in development projects of the zone, promising high profit with small investment.

Reporter: Thank you for kind explanation.

State Economic Development Commission of the DPRK

PDF of the interview here.

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Contract signed for Onsong Economic Development Zone

Friday, December 13th, 2013

Onsong-SEZ-2015-9-13-web

Pictured above (Google Earth): The approximate location for the North Hamgyong Provincial Onsong Island Tourist Development Zone

According to China’s Global Times:

A contract has been signed between North Korea and a Chinese border city to develop a special economic zone in North Hamkyung Province, one day after North Korea removed Kim Jong-un’s once all-powerful uncle from his post.

North Korea on Monday signed the contract for Onsong Economic Development Zone with Tumen, a Chinese city under the administration of Yanbian Korean Autonomous Prefecture in Northeast China’s Jilin Province, South Korea’s JoongAng Daily reported Thursday.

On Sunday, North Korea dismissed Jang Song-thaek, widely considered the second-most powerful figure in the country, and expelled him from the Workers’ Party of Korea. Jang was accused of “anti-party, counter-revolutionary factional acts” and womanizing.

Considered an economic reformist, Jang led a delegation to China in August last year to discuss the development of two economic zones in Rason City and the Hwanggumpyong and Wihwa islands near the Chinese border.

An official from Tumen said the city government expressed concerns regarding possible postponement of the contract signing due to Jang’s ouster, but North Korea requested they sign the contract as scheduled, according to the daily.

“Jang’s involvement in economic projects had been diminished significantly this year, so his purge would not have much impact on the speed of economic reform in North Korea,” Kim Kyu-chol, head of non-government Forum for Inter-Korean Relations, a Seoul-based group monitoring inter-Korean business relations, told the Global Times on Thursday. “Actually  economic reform will speed up next year as North Korea will focus on the economy next year, the third of Kim Jong-un’s rule.”

North Korea was in the process of forming the new National Committee for Economic Development earlier this year, which technocrats who had prior experience with the nation’s former economic development bureau, will have joined, Kim Kyu-chol said.

North Korea also reached an agreement with China on Sunday over a 380-kilometer high-speed railway to connect Sinuiju, the city across the border from Dandong in Liaoning Province, through to Pyongyang and Kaesong, South Korean Democratic Party lawmaker Hong Ik-pyo told a seminar at the National Assembly.

Pyongyang’s insistence on inking the contract sends a signal that its economic ties with China will not be affected by Jang’s dismissal and that North Korea wants to strengthen cooperation with China, said Jiang Longfan, a North Korea expert at Yanbian University.

“Kim wants to consolidate his absolute authority through purging Jang, but in the meantime the commitment to economic development has to be maintained to win people’s support,” Jiang said.

Sinuiju Special Zone located at the estuary of the Yalu River is expected to see the ground-breaking of a major project in February next year, with backing from Hong Kong. North Korea also signed a contract with investors from Singapore, Hong Kong, and the Chinese mainland to invest in the Kangryong Green Development Zone in South Hwanghae Province in mid-November, Tongil News reported on Tuesday.

The Onsong Economic Development Zone is one of the 14 special economic zones North Korea has designated this year to attract foreign investment.

North Korea planned to develop the zone into a tourism resort that includes a golf course, swimming pool, horse racing, and restaurants to attract foreigners, said Jin Hualin, an expert on North Korea economy at Yanbian University.

“But the exact development agenda hasn’t been set as Tumen will invite investors to make their decisions,” he said.

He is optimistic about the economic prospects for the zone, which, located in mysterious North Korea, will be attractive to foreigners, he said.

Next year, North Korea aims to host 1 million foreign tourists and thus further tourism projects are expected to be announced, Kim Kyu-chol said.

Some 250,000 foreign tourists, more than 90 percent of whom were Chinese, visited North Korea last year, Kim said.

Read the full story here:
N.Korea inks border town economic deal
Global Times
Sun Xiaobo and Park Gayoung
2013-12-13

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Jang’s purge to affect HGP and Rason economic Zones

Friday, December 6th, 2013

The Asahi Shimbun reports on the Hwanggumphyong SEZ (2013-12-19):

The execution last week of Jang Song Thaek, North Korea’s de facto No. 2 leader, has taken its toll on a joint project with China to develop Hwanggumphyong island across the border from this city in Liaoning province.

Jang, uncle of North Korean leader Kim Jong Un, was believed to be in charge of relations with China and overall economic affairs. His purge could continue to have further ramifications on economic cooperation with and investment from China.

Hwanggumphyong island is an 11-square-kilometer swath of North Korean territory in the Yalu river that defines the border with China. A bilateral joint development venture there, kicked off by a ground-breaking ceremony in June 2011, was halted temporarily after North Korea insisted on having its troops stationed on the island.

But both sides agreed to rejuvenate the project and set up a joint steering committee when Jang visited China in August 2012. Beijing committed to investing 80 million yuan (1.4 billion yen, or $13 million) and has since been laying the groundwork on the island.

The North Korean official in charge of the venture, however, was recalled immediately following Jang’s purge, and construction work was also halted around the same time, sources in the steering committee said. A Chinese member of the steering committee reported to the central government in Beijing that quick changes in North Korea made it difficult to achieve the initial goal for attracting firms to Hwanggumphyong island.

The steering committee has touted the advantages of being able to rely on cheap North Korean labor in a bid to attract 30 firms from China, Taiwan and elsewhere before the year is out, but only a handful of companies have come forward with decisions to set up shop on the island amid widespread concern about investments associated with North Korea.

The purge of Jang, who was the main contact for joint China-North Korea ventures, has probably alienated most decent investors, said an embittered Chinese official in the steering committee.

North Korea has also been calling for Chinese investment in the Rason Economic and Trade Zone in the country’s northeast. But Pyongyang sent investors into panic when it accused Jang of an “act of treachery” in “selling off the land of the Rason Economic and Trade Zone to a foreign country” during his trial. He was also accused of attempting “subversion of the state.”

North Korea has sought to rehabilitate its moribund economy by attracting foreign capital to specially designated economic zones. It released an ordinance in late November, for example, to designate “economic development zones” in its various provinces.

It is believed there will be no change to that policy line, which has received Kim Jong Un’s endorsement.

Many observers believe Premier Pak Pong Ju, who has been engaged in practical aspects of economic management under Jang’s supervision, will take charge of overall economic affairs.

“Pyongyang will probably expand the role of Pak, who is believed to be an economic reformist, so as to reassure investors,” said one diplomatic source.

But investor confidence is expected to remain weak in the short term, because Jang’s execution was undoubtedly perceived as an “investment risk” in the eyes of Chinese and other foreign investors.

“It is by no means easy to regain the confidence of private-sector capitalists who were shaken up by the purge,” said one Chinese investment adviser who visits Rason frequently. “It will take time before concerns are quelled.”

The JoongAng Daily reports on the Rason SEZ (2013-12-6):

The Rason Special Economic Zone, which was headed by Jang Song-thaek, the once-powerful uncle of North Korean leader Kim Jong-un, has been left as a ghost town after Jang’s purge, and several North Korean officials who worked in the zone are under questioning, a source in China said.

“On Nov. 3 to 4, I visited the Rason economic district,” the source exclusively told the JoongAng Ilbo, “but I couldn’t meet with the two main officials in charge of the zone’s development because they were both sent to Pyongyang.

“The two officials were in the inner circle of Jang Song-thaek and they were in charge of developing economic zones of North Korea,” the source said.

The Rason Special Economic Zone is one of the most ambitious attempts by North Korea at limited economic reforms. The district has been developed since Jang visited China in August 2012.

In August 2012, North Korea and China’s [Jilin] provincial government launched a DPRK-China Rajin-Sonbong management committee for full-fledged development of the zone, according to the source. The [Jilin] government dispatched about 50 Chinese officials, while Pyongyang sent about 30 to the committee.

With the purge of Jang, most of the Chinese officials have left the zone, and the North Korean officials are scheduled to return to Pyongyang soon. All activities at three piers in Rason’s port have stopped with the downfall of Jang. The first pier, run by a Dalian-based Chinese company, suspended its transportation of coal, and the construction of a second pier has been halted. The construction of a third pier by a Russian builder was also suspended.

“Last year, the development of the Rason district seemed very dynamic,” said another source knowledgeable about North Korea.

“But most Chinese businessmen did not trust North Korea’s polices, and the Chinese government did not offer guarantees on investment in the district so, in fact, there wasn’t much progress.

“Despite the fact that development was slow, Jang’s aides invited some girls to the district and held a big soiree at a floating restaurant, which could be one of the reasons for Jang’s purge,” the source said.

Read the full story here:
Jang’s execution halts China-N. Korea joint venture, alienates investors
Asahi Shimbun
Koichiro Ishida
2013-12-19

With purge, Rason zone is ghost town
JoongAng Daily
Hoi Hyung-Kyu, Kim Hee-jin
2013-12-6

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DPRK’s Minister of Trade releases information on recent foreign economic cooperation at forum in China

Thursday, September 12th, 2013

Institute for Far Eastern Studies (IFES)
2013-9-12

After North Korea’s launch of a long-range rocket in December 2012 and third nuclear test in February 2013, China endorsed UN sanctions against North Korea. Consequently, North Korea appears to be increasing its economic cooperation with Mongolia and Russia.

On September 6, the 7th annual Northeast Asia joint high-level forum was held in Changchun (Jilin Province), China. Ku Bon Tae of the DPRK Ministry of Trade is reported to have been present and to have delivered a presentation on North Korea’s recent economic cooperation activities.

Ku stated, “Currently, cooperation between North Korea and Mongolia is making positive progress,” and “the international freight transport coordination issue and Mongolian corporate investments, telecommunications and other cooperation issues at the Rason Special Economic Zone are at the final stages of agreement.”

He added, “We hope more Northeast Asian nations will actively take part in the Rason Special Economic Zone.”

In May, a Mongolian oil companies HB Oil JSC acquired 20 percent stake in North Korea’s state-run Sungri oil refinery. In July, the two countries signed an agreement on information and communication cooperation and exchanges. In addition, Mongolian experts in the field of livestock are said to be involved in North Korea’s Sepho tableland (Gangwon Province) reclamation project, which seeks to create a large stockbreeding complex.

As for economic cooperation with Russia, the Khassan–Rajin railway — part of an international container rail transport line connecting Russia and North Korea and linking Northeast Asia to Europe — has its opening ceremony scheduled for this month after having received extensive reconstruction. Russia also has a long-term lease on Rajin Port’s pier No. 3. Russia has been renovating the pier, and renovations are expected to be completed by the end of this year.

North Korea and Russia plan to develop Khassan–Rajin rail line and Rajin Port in order to transport cargo from Asia to Europe: as containers arrive at Rajin Port, they are moved to the Khassan-Rajin railway and then transferred to the Trans-Siberian Railway (TSR), headed for Europe.

Ku further added, “After the projects are completely finished friendly cooperation between Russia and North Korea and international transport pathway will be opened connecting Asia to Europe through the development of economic and trade relations between the two countries.”

In Ku’s speech, the public economic cooperation with regards to China was covered briefly, and exclude the recent progress made. He commented only on the establishment of Joint Management Committees in Rason and Hwanggeumpyeong economic zones and that banks of the two countries are in the process of negotiating the usage of Chinese renminbi as the currency of trade.

Ku emphasized, “As with our past, our Republic hopes to promote independence, peace and friendship between Northeast Asian countries in the future, based on our foreign policy and will make every effort to further develop and expand this friendly cooperative relationship.”

The 9th China–Northeast Asia Expo opening ceremony was also held (in Changchun) on the same day as the forum. Political and business leaders from China, South and North Korea, Russia, Japan, and Mongolia were present at the event.

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DPRK Economic Development Commission

Friday, September 6th, 2013

UPDATE 5 (2013-10-31): North Korea Opens Fourteen Special Economic Zones Nationwide (IFES):

North Korea announced that it has opened fourteen special economic zones (SEZs) in various provinces this year.

The Rodong Sinmun, official newspaper of the Workers’ Party of Korea (WPK) covered the news about the Pyongyang International Conference on Special Economic Trade Zone held from October 16 to 17, 2013. This conference was convened by the Korean Economic Development Commission.

According to the newspaper, a law professor from Kim Il Sung University, Dr. Kang Jong Nam, presented at the conference and said, “There are four well-known special economic zones in our country: the Rason Economic and Trade Zone, Hwanggumpyong and Wiwha Islands Economic Zones, Kaesong Industrial Complex, and Mount Kumgang International Tourism Zone. But from this year, fourteen new economic zones were established.” However, details on where these fourteen new SEZs are located were not disclosed.

Kang added, “To meet the growing demands for development, operation and management of new economic development zones, increasing legal measures are being taken to reinforce the development with establishment of new laws or amendment of existing laws.”

North Korean leader and Chairman of the National Defence Commission Kim Jong Un made a statement at the WPK Central Committee meeting in early March, saying that economic development zones be established in each province, taking into consideration the special characteristics of each region.

Experts confirmed that North Korea has officially announced its plans to develop Wonsan and Chilbosan as tourism zones this year. SEZ development of Kangryong District in Southern Hwanghae Province began from last July.

In addition, the Korean Central News Agency announced on October 17 that ‘Kaesong High-Tech Industrial Park’ will be jointly developed by North Korea and foreign consortium, and this is likely to be one of the new fourteen SEZs built this year.

North Korea is actively hosting international forums targeted to attract foreign investment into the country, with experts from Canada, Malaysia, the United States and other foreign countries attending.

The Rodong Sinmun also quoted Director Choe Hyon Chol of the Korean Association of Economic Development: “It is crucial to educate and train experts to work in the economic zones and this will be the next step for the development of SEZs.” He also said that “We are willing to participate in various functions such as international forums, investment briefings, and exhibitions to encourage more international investment and cooperation.”

Meanwhile, on October 21 the KCNA reported on the extended cabinet plenary meeting. At the meeting, reports were given on the performance of the third quarter of the national economic plan and measures to successfully implement the plans for the fourth quarter. The central agenda for the last quarter is increasing production of coal and steel products and improving agricultural and light industries to resolve the shortage of food and consumer goods for the people. In addition, improvement in education, health services, and sports sectors were named as imperative areas to recover the country’s status as a powerful socialist nation. Specific tasks and strategies of the fourth quarter were presented at the meeting for the implementation of the national budget.

UPDATE 4 (2013-10-31): Rodong Sinmun follows up on the Economic Development Commissions’ conference on Special Economic Zones:

On Oct. 16 KCNA reported that the Pyongyang International Conference on Special Economic Zone (SEZ) development opened. Many foreign sources conveyed the news, each with their own comments.

Economic experts from without were not many in number, but each of the attendants was a specialist who had either been involved in successful development of SEZ in Asia and the rest of the world or rich in relevant research experience.

Among the organizers of the conference was Prof. Kyung Ae Park, director of the Center for Korean Research, University of British Columbia, who played a big role in inviting experienced specialists and scholars to the conference.

The first foreign speaker on the first item on the agenda was professor of the Chinese University of Hong Kong.
Exchanged at the conference were experience on SEZ development in Vietnam, Malaysia, India and many other Asian countries.

Economists and specialists from Canada and the U.S. also spoke at the conference.

Many speakers expressed their unusual feeling of having the opportunity of academic exchange on SEZ development in the city of Pyongyang.

Impressions on Pyongyang were in some points common to all. They said in one voice that Pyongyang, the capital of the DPRK, is beautiful and peaceful, and that Korean economists and specialists were very sincere and enthusiastic in their attitude to the SEZ development.

All the attendants of the conference, both from within and without, expressed thanks to the Korean Economic Development Society, the sponsor, and Kyung Ae Park, organizer, of the conference, which was conducive to seeking a new way of economic development that suits the needs of the 21st century.

UPDATE 3 (2013-10-24): North Korea Launches New Economic Development Organizations (IFES, 2013-10-24)

North Korea announced that it had installed the State Economic Development Commission to oversee the national economic development.

The Korean Central News Agency (KCNA) reported on October 16 that preamble to raise the existing General Bureau for State Economic Development to State Economic Development Commission was adopted at the recent Presidium of the Supreme People’s Assembly. Details for appointment of officials and function of the commissionareyet to be announced.

The bureau was established in 2011 to design and carry out the 10-year plan for the development of the national economy. The elevation of this institution from bureau to commissioncan be interpreted as increasing emphasis on economic development.

In particular, the State Economic Development Commissionis likely to serve as the control tower, overseeing the development of special economic zones and the 10-year economic plan.

The KCNA also reported on the establishment of a non-state organization called the Korean Economic Development Association. As the news explained, this organization was installed for the purpose of “attracting interests of economic, business, and academic communities from abroad in special economic zones (SEZs)” and “to promote SEZs to companies and organizations of other countries to draw investments for development in these areas.”

The association is expected to organize and provide support services to foreign investors and coordinate debates, conferences, exhibitions, economic information exchanges, and provide advisory services, in accordance with government mandates and investment agreements. Essentially, the association’s chief focus is to attract foreign investments into SEZs and provide various services to assist their activities in the economic zones.

The news reported the first project of the association was the organization of the “Pyongyang International Conference on Special Economic Zones (SEZ) Development,” held at the Yanggakdo International Hotel. The conference brought together economic experts from North Korea, the United States, Canada, India, and Malaysia. The association’s contact information (phone and fax numbers;email address)were also released.

The launch of a non-state organization for the promotion of SEZs is a first for North Korea. This is considered as a follow-up measure to the Law on Economic Development Zones, which was enacted in June 2013.

UPDATE 2 (2013-10-23): Rodong Sinmun follows up on the Economic Development Commissions’ conference on Special Economic Zones and reports that there will be 14 Economic Development Zones:

An International Conference on Special Economic Zone (SEZ) Development was held in Pyongyang, the beautiful capital of Juche Korea on Oct. 16 and 17 under the sponsorship of the Korea Economic Development Association. It proceeded in an amicable atmosphere with the participation of competent economic professors and experts of Canada, Malaysia, U.S., Vietnam, India and China, economists and researchers of the Korea Economic Development Association, Kim Il Sung University, University of National Economics, Wonsan Jong Jun Thaek University of Economics and Academy of Social Sciences and officials of various fields who were striving to develop regional economy in Rason City and other areas.

The conference heard first the speeches of Vice-chairman of Korea Economic Development Association Ri Chol Sok and Prof. Kyung Ae Park from University of British Columbia, who was the organizer of the conference. It discussed 6 themes. The matter of primary concern at the conference was the actual situation and prospect of special economic zone development in the DPRK and the legal system related to it. Officials of the Korea Economic Development Association and professors of Kim Il Sung University spoke of this matter.

Thanks to the measures of the DPRK government, Rason Economic Trade Zone, Hwanggumphyong-Wihwado Economic Zone, Kaesong Industrial Zone and Mt. Kumgang International Tourist Special Zone have already been created and this year witnessed the establishment of 14 economic development zones. In conformity with this, legal measures for development, management and operation of the special economic zones were newly taken and the existing laws are being revised and supplemented.

At the session held on the theme “Next Steps for DPRK Economic Zones” held prior to the closing ceremony, Choe Hyon Chol, director of the Korea Economic Development Association, explicated the prospects for development of the special economic zones in our country and hoped for broad and positive international cooperation.

The Pyongyang International Conference on Special Economic Zone Development held under tense situation was an important occasion showing the peace-loving stand and policy of the WPK and DPRK which are concentrating efforts on the development of economy and improvement of people’s living standard.

Here is coverage of this report in Yonhap.

UPDATE 1 (2013-10-17): In September, IFES reported the creation of the DPRK’s Economic Development Commission” (See original post below). It appears that KCNA has finally announced its creation. According to KCNA in two different articles:

General Bureau for State Economic Development Renamed

Pyongyang, October 16 (KCNA) — The DPRK decided to rename the General Bureau for State Economic Development the State Economic Development Commission.

A decree of the Presidium of the DPRK Supreme People’s Assembly was promulgated on Wednesday in this regard.

And…

Economic Development Association Organized in DPRK

Pyongyang, October 16 (KCNA) — The Economic Development Association was organized in the Democratic People’s Republic of Korea.

As a non-governmental organization, it helps foreign businesses and entities to get a better knowledge of special economic zones in the DPRK and to make investments in them.

It is also working to assist business activities of foreign investors in the zones.

As part of its first work, it hosted the Pyongyang International Conference on Special Economic Zone (SEZ) Development in Pyongyang starting from Wednesday, attended by economists from Canada, Malaysia and the United States.

The details to contact with the association are as follows:
Tel: 00850-2-381-5912
Fax: 00850-2-381-5889
E-mail Address: [email protected]

Here is the Korean version of the articles:

국가경제개발총국을 국가경제개발위원회로 하기로 결정

(평양 10월 16일발 조선중앙통신)조선에서 국가경제개발총국을 국가경제개발위원회로 하기로 결정하였다.

이와 관련한 조선민주주의인민공화국 최고인민회의 상임위원회 정령이 16일 발표되였다.(끝)

조선경제개발협회 조직

(평양 10월 16일발 조선중앙통신)조선경제개발협회가 조직되여 자기 활동을 시작하였다.

협회는 다른 나라의 기업들과 단체들이 조선의 특수경제지대들에 대하여 잘 알게 하고 그 진출을 협력해주는 민간급단체이다.

조선의 특수경제지대개발에 도움이 되는 투자토론회, 상담회, 전시회, 경제정보교류, 자문봉사, 정부의 위임에 따르는 투자합의, 투자가들의 기업활동방조 등 다양한 봉사를 제공하고있다.

협회는 앞으로 조선의 특수경제지대개발에 관심을 가지거나 투자에 참가하는 여러 나라 경제계와 기업계, 학계의 광범한 인사들의 리익을 도모하기 위해 자기의 역할을 끊임없이 높여나가게 된다.

조선경제개발협회는 첫 사업으로서 카나다와 말레이시아, 미국을 비롯한 여러 나라의 경제전문가들을 초청하여 16일부터 특수경제지대개발에 관한 평양국제토론회를 주최하고있다.

협회는 전화 00850-2-381-5912와 확스 00850-2-381-5889, 전자우편 [email protected]로 기업, 단체들과 련계하고있다.(끝)

I am unsure of the difference between the “Economic Development Commission” and the “Economic Development Association”, but they appear to be the same organization. The same name difference is apparent in the Korean articles as well: 조선국가경제개발총국, 조선경제개발협회. I also assume this is the same “Economic Development Commission” reported by IFES in September and posted below.

The first high profile event of the Korea Economic Development Association/Commission was an event: The Pyongyang International Conference on Special Economic Zone (특수경제지대, SEZ) Development. Below are articles on the event:

KCNA (2013-10-16):

International Conference on SEZ Development Opens in DPRK

The International Conference on Special Economic Zone (SEZ) Development opened at the Yanggakdo International Hotel in Pyongyang on Wednesday, with economists from the Democratic People’s Republic of Korea, Canada and other countries in attendance.

In this regard, KCNA met Ri Chol Sok, vice-president of the Korea Economic Development Association.
Ri said:

The conference takes place at a time when the DPRK is paying deep attention to developing special economic zones in local areas, as the Rason Economic and Trade Zone.

The conference deals with present-day situation and prospect of the special economic zones in the DPRK and its laws for SEZs, characteristics of special economic and exports processing zones in China and Vietnam as well as the experiences gained in developing them.

It also introduces the roles the zones play in the economic development in each country.

The DPRK has constituted a series of laws for ensuring free business activities in the zones.

Meanwhile, the country is making efforts to improve economic management methods, while consolidating the socialist economic system.

This conference will mark a good occasion in promoting international exchange and cooperation and in developing the economy of the country.

Xinhua:

The Democratic People’s Republic of Korea (DPRK) said Wednesday it would establish special economic zones open to investment from “any country.”

Ri Chol Sik, deputy head of the Korea Economic Development Association (KEDA), told the first international conference on Special Economic Zone (SEZ) development here that the DPRK was preparing to open many SEZs at provincial level, with legal protection and preferential policy already set up.

“Policies and regulatory environment and their implementation are critical to the success of SEZs,” said Bradley Babson, chair of the DPRK Economic Forum at the U.S.-Korea Institute at John Hopkins School of Advanced International Studies.

A DPRK professor with Kim IL Sung University told Xinhua the seminar was “a great opportunity for our people to learn from other countries’ successful experience on SEZs.”

The seminar, sponsored by KEDA and co-hosted by Park Kyung Ae, director of the Canada-DPRK Knowledge Partnership Program (KPP) at the University of British Columbia, Canada, was attended by DPRK scholars and officials and dozens of foreign economic specialists from countries such as the United States, Canada, China, Vietnam, India, and Malaysia.

Park told Xinhua it was a chance to exchange ideas and promote cooperation between DPRK and the outside world. She has been engaging for years in a KPP academic exchange program, which sends DPRK professors to study and do research in Canada.

KEDA, a newly formed non-government organization, aims to support activities by foreign businesses and scholars interested in the country’s special zones, said KCNA, DPRK’s official news agency.

The non-governmental association, the first of its kind in DPRK, arranges meetings, supports business activities and offers information and consulting to prospective investors.

Also on Wednesday, the National Economic Development General Bureau was renamed the National Economic Development Committee, KCNA said.

And from KCNA on 2013-10-17:

Ri Chol Sok, vice-president of the Korean Economic Development Association (KEDA), said in his closing address at the Pyongyang International Conference on Special Economic Zone (SEZ) Development that other countries’ experience would be helpful to the DPRK seeking to create economic development zones in its localities.

The conference was held at the Yanggakdo International Hotel on October 16-17, with the attendance of KEDA officials, professors of Kim Il Sung University, University of National Economy, Academy of Social Sciences and other related institutions and economists of the DPRK and experts of academic and economic circles of different countries, including University of British Columbia in Canada, Chinese University of Hong Kong, University of Delhi in India, Planning & Economic Research in Malaysia and University of Wisconsin in the United States.

It focused on such matters as the features of SEZ planning and the study of its examples, management and investment in SEZ and development course of SEZ.

Its participants presented papers on experience and lessons of some countries and valuable propositions and exchanged their views on the prospect of SEZ development in the DPRK and international cooperation in this respect.

Professor Pak Kyong Ae of University of British Columbia in Canada recalled that the conference was conducive to establishing and putting into practice the strategy of comprehensive economic development including the creation of SEZs.

The professor hoped that the good ties forged between the participants through the conference would lead to continuous exchange.

And from Xinhua (2013-10-17):

The Democratic People’s Republic of Korea is hosting an international conference to explore ways of developing its economy. Earlier this year, the country announced a new law governing new economic zones.

A sign of new climate in economic development, thirteen foreign academics and experts from countries including the US, Canada, India, China, Malaysia and Vietnam gathered in Pyongyang on Wednesday for an international economic conference.

They joined about 60 economists from the Kim Il Sung University, the Academy of Social Sciences, and other local institutions.

The conference comes as economic zones are starting to be created all over the country. On June 5th, the DPRK’s state news agency KCNA announced a new law governing special economic zones. Foreigners can now invest in the new economic zones with preferential conditions for land-use, employment and tax.

The DPRK has experimented with special economic zones for years. In the early 1990s, the DPRK set-up the Rason Special Economic Zone in the far northeast, but it made little progress until recently being reinvented as a joint project with China.

Another DPRK-China joint economic development project on the border between the two countries at Hwang-gum-pyong is still at a much earlier stage of development.

The joint industrial zone with South Korea at Kaesong has not long reopened after a months-long shutdown earlier this year due to tensions on the peninsula.

The new law on special economic zones is one of a number of signs that the DPRK may be seeking to speed up its economy.

Here is coverage in Yonhap (2013-10-16):

North Korea has established a private organization to develop special economic zones, its media said Wednesday, following toughened business sanctions slapped on the communist country for its nuclear weapons test earlier in the year.

The organization, dubbed the Korean economic development federation, aims to support activities of foreign businesses and scholars interested in the special zones in North Korea, the Korean Central News Agency (KCNA) said.

The regime’s news wire added that the organization will arrange meetings, support business activities and offer consulting and information to prospective investors.

As part of its first official activity, the federation arranged an international conference attended by United States, Canadian and Malay economists that kicked off earlier in the day in Pyongyang, the KCNA said.

North Korea observers said that the creation of a civilian entity to manage a handful of special zones is a first for the communist country and that it follows the revision of related laws in late May aimed at fueling growth and attracting more foreign investors.

“The federation seems to be a copy of similar private sector organizations in capitalist countries and shows the importance placed on pulling off economic growth by the Kim Jong-un government,” said Lim Eul-chul, a research professor at Kyungnam University in South Korea.

Other experts said with the toughened sanctions from the United Nations, the North may be seeking to circumvent the existing business and trade restriction by creating a private body.

Here is coverage in the Daily NK:

According to an October 16th report by Chinese news agency Xinhua’s correspondent in Pyongyang, Yoon Yong Suk, who is in charge of the Chosun Economic Development Committee, recently spoke at the “Pyongyang International Symposium on Special Economic Zone Development,” held at the Yanggakdo Hotel. He said, “We are actively preparing to establish special economic zones in all provinces and introduce foreign capital.” Chosun Economic Development Committee is a “non-state” institution established for the purpose of developing special economic zones.

He explained, “At the Central Committee meeting last March, it was decided that special economic zones should be established in each province, and tourist areas, too, in order to invigorate the tourist industry, and bring about greater diversity in international trade. Currently, each province is moving forward with the establishment of development zones and the task of attracting foreign currency, in accordance with the plan.”

“It is the consistent policy of our country to develop the Rason Special Economic Zone, the Hwangguempyeong and Wihwa Island areas, Mt. Geumgang International Tourist Area, and economic development zones in each province,” he added. “We will find practical and logic means by which to expand economic, trade and scientific exchanges, as well as enhance understanding, exchanges and contacts with governments, private industry, and private groups.”

On October 1st, Daily NK reported that economic officials in provincial areas of North Korea had been ordered to formulate plans for the designation of two candidate cities for development, and that legal and systemic modifications were being investigated, in order to try and ensure interest from foreign capital.

According to Daily NK’s information, the profit derived from joint ventures would be shared 50-50; owever, foreign companies would only have to cover the cost of land use and wages.

Naenara, one of the DPRK’s official web portals, has also posted lots of content on the meeting. See here, here, here, here, here, and here. I have compiled all these articles into this PDF.

Read full story here:
N. Korea sets up civilian body for special economic zones
Yonhap
2013-10-16

ORIGINAL POST (2013-9-6): On May 29, the Presidium of the Supreme People’s Assembly promulgated the “DPRK Law on Economic Development Zones“. Now it appears they have named a body to administer the law. According to the Institute for Far Eastern Studies (IFES):

DPRK Economic Development Committee launched: Special economic and tourism zones to be named (IFES)

In the wake of normalizing the Kaesong Industrial Complex (KIC) agreement, North Korea has announced that it had installed the Economic Development Committee and named special economic and tourism zones, as well as newly appointed officials in charge. In the near future, North Korea has plans to announce specific special economic zones in Sinuiju, Nampo, and Haeju, along with tourism zones in Mount Baekdu, Wonsan, and Chilbosan. The head and director-level executives for the Economic Development Committee are likely to be appointed from the Joint Venture Investment Committee. The head of the Tourism Development is reported to be the former director of Korea Tourism Administration.

Meanwhile, North Korea has released the preamble of the economic development law adopted at the recent Presidium of the Supreme People’s Assembly held on May 29. As inter-Korean relations are progressing with the plans of restarting the Kaesong Industrial Complex and the reunion of separated families moving forward, North Korea’s economic development law is drawing attention once again.

In principle, the selection process for the special economic zones must possess these following elements: Area must 1) be in a favorable location for foreign economic cooperation and exchanges; 2) contribute to the economic and science and technology development; 3) be at a fixed distance from the residential areas; and 4) be at a location that does not intrude in the state protected areas (Article 11). This can be interpreted as the North’s effort to segregate the existing residential areas with the special economic zone similar to the Kaesong Industrial Complex so as to minimize the political and social impact of these zones.

The newly confirmed information for the new Economic Development Law is the list of development activities. “Investors from other countries are permitted to develop economic zones either alone or in collaboration after obtaining state approval (Article 20).” Evidently, North Korean institutions and enterprises may also develop economic zones after receiving approval from the state.

In addition, the law granted comprehensive property rights to the development companies. It states that “Companies have the right to sell, re-lease, bequeath, or transfer the ownership of the buildings and land lease” and “the selling or re-lease price shall be determined by the development company” (Article 29).

As for recruitment of workers, there is a provision that states “our country’s labor force must be given preferential consideration” (Article 41), and “the minimum wage for the employees of the Economic Development Zone shall be determined by central guidance organization of special economic zone” (Article 42). This poses some concern as the employee wage at the Economic Development Zone could be compared to that of the KIC, which could lead to wage disputes after the KIC begins to implement its internationalization process.

Another noteworthy change is the currencies permitted at the zone: “currency for circulation and payment must be Korean Won (KPW) or other specified currency” (Article 46), suggesting that other currencies such as the US dollar and euro will be allowed.

Furthermore, the Act specifies that “Companies in the economic development zone will decide on the commodity and service prices, and all the prices in the Economic Development Zone between institutions, enterprises and organizations shall be determined by the international market price based on agreement of all the parties” (Article 43). This suggests that the products produced in the zone may be traded domestically in North Korea.

In this Act, corporate income tax rate was set at 14 percent of profits and “Economic Development companies that operate for more than 10 years will be considered for a tax cut or exemption from the corporate income tax.” Article 58 grants “communication guarantees” for the usage of mail, telephone, and fax services, but did not include the use of the Internet.

Posts on the DPRK Law on Economic Development Zones can be found here.

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