Hundreds of firms plan to open in Kaesong

Hundreds of companies are lining up to operate in North Korea’s Kaesong Industrial Complex, but an economist said in a seminar yesterday that the current economic cooperation with South Korea won’t bring any significant changes to the communist country.
More than 200 companies have signed a contract with the Korea Land Corp. to join the 33 domestic companies currently operating in the industrial park, according to Kim Du-bok, an employee at the state-owned company.
Korea Land Corp. is responsible for assigning space in the industrial complex.
Among the new companies are a couple of firms with foreign connections that hope to open next year.
A Korean subsidiary of Tianjin JCI Cosmetic Corp., a Chinese producer of synthetic nail tips and other cosmetic goods, agreed Monday to lease space in the section allotted for foreign companies.
“Tianjin JCI Cosmetic Corp. and its Korean subsidiary, Dashing Diva, signed a contract to lease a piece of land,” Kim said yesterday.
To operate at the inter-Korean park, which uses North Korean labor and South Korean technology, a foreign company needs to have a South Korean subsidiary.
Yuhan-Kimberly, a joint venture between U.S.-based Kimberly-Clark and Korea-based Yuhan, has expressed a desire to set up a manufacturing base in Kaesong, but has not yet applied for space.
However, Cho Dong-ho, a professor at Ewha Womans University, said during a seminar in Seoul yesterday sponsored by the Korea Rural Economic Institute, that the government needs a more practical approach to stimulate reform and the opening of North Korea.
As an example of the failure, he said there are neither goods nor people to transport on the reconnected railroad between Seoul and Sinuiju.
He also said only 9.2 percent of the companies that tried to manufacture goods in Kaesong had done so for more than five years, as of January 2007. Many companies, he said, halted their operations after one or two years.
“The purpose of the economic policy toward North Korea is to support North Korea’s economic development and encourage reform and the opening of the North, but despite the fact that the cooperation is an economic issue, non-economic considerations were made a priority.”

By Limb Jae-un Staff Writer [jbiz91@joongang.co.kr]