[FOUNTAIN]China feels free to invest in North

Home > Opinion > Columns

print dictionary print

[FOUNTAIN]China feels free to invest in North

Authorities of a power plant being built in Wonsan, North Korea, made a strange deal with the police bureau in Liaoning Province of China. In return for electric generation facilities from China, the plant would provide minerals such as zinc and gold. The power plant authorities jumped into mine development because they did not have enough foreign exchange.
North Korean companies have been delving into areas in which they have no expertise to survive after the adoption of partial economic liberalization on July 1, 2002. And in the process, the markets and resources of North Korea have been quietly handed over to Chinese capital.
Yanbian Tianci Industrial and Trade Co. Ltd invested 100 million yuan, about $12 million, in Musan mine in North Korea in 2003, producing 600,000 tons of iron ore in 2004 and 2 million tons in 2005. Chogeum Group in Shandong Province invested 220 million yuan in Jilin Province and the Cheonghyeon copper mine in Hyesan, Yanggang Province.
The investments are not limited to resources. In 2003, Zhongxu Group in Wenzhou, Zhejiang Province, obtained the management rights to Pyongyang First Department Store, the largest in North Korea. The Chinese company wants the “dollars in the closet” in Pyongyang, which is estimated at $300 million to $1.5 billion.
In 2003 and 2004, China’s part in North Korea’s official trade soared from 33 percent to 48 percent, and unofficial trade between Shinuiju and Dandong is brisk. While South Korea is reluctant to trade with North Korea because of the nuclear issue, the “economic Sinofication” has embraced North Korea.
The concerns were raised at the “2005 Korean Peninsula Peace Process Second Network Seminar,” hosted by the Institute of Foreign Affairs and National Security last weekend. One participant said the situation reminded him of the economic exploitation of neighboring powers in the last days of the Joseon Dynasty.
The problem is that there is no clear solution. When the United States is keeping a watchful eye on inter-Korean exchange, Seoul cannot pursue more active trade with the North. Yet, it is frustrating to sit and watch China’s growing influence.

by Ahn Sung-kyoo

The writer is a deputy political news editor at the JoongAng Ilbo.
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)