[Viewpoint]How the North can avoid being swallowed

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[Viewpoint]How the North can avoid being swallowed

The city of Dandong in China borders North Korea, with the Yalu River in between. The North Korea-China Products Expo held for four days in this city at the end of last month clearly showed the economic gap between the two countries.
China has pursued reform and open markets for 29 years while North Korea has been a closed society. And it showed.
The gap in development was as wide as the difference in the amount of time each country has invested on reform and the opening of markets.
On the North Korean side of the Yalu, in Shinuiju, which seemed asleep, roadside trees were the tallest landmark.
On the other side, in Dandong, riverside apartment buildings sprout up amidst the booming real estate development and look imposingly on North Korea.
The gap between Dandong and Shinuiju is like the difference between an adult and a child.
The North Korea-China Products Expo was held at the Yalu River Hotel in downtown Dandong. China has been suspected of attempting to absorb North Korea as the fourth province of northeastern China by developing underground resources in North Korea and inroads into its market for industrial products. But on this occasion, the Chinese met North Korea’s business people to consult on investments and to sell their products.
The products exhibited by the 22 North Korean companies participating were many and varied, ranging from shoes and clothes to processed precious metal products.
But there was a strange and awkward scene as well, in which a North Korean woman, who had reportedly majored in pharmacy at Pyongyang Medical University and received a master’s degree was selling dried ferns for 30 Chinese yuan ($4) and North Korean-made Viagra for 40 yuan. The scene seemed to show the reality of North Korea’s industrial level.
The industrial products from the Chinese companies participating, not only from Tianjin, Tangsan and Dalian but also from Hainan, a city in the far south, were much more advanced than the products made in North Korea.
On top of that, the Chinese business people were anxious to export their equipment and production facilities to North Korea.
As the trade between North Korea and China has increased, North Korea’s trade deficit has grown to a serious level. Last year, the trade recorded between the two countries was $1,699.60 million while North Korea’s trade deficit exceeded $764.17 million.
Such a trade imbalance can easily be seen by just spending half a day watching the Dandong Customs Office and the Jung-jo Uuigyo, or Sino-Korea Friendship Bridge, where about 80 percent of China’s goods cross into North Korea.
Products from both countries cross the border twice a day. Local traders note, “Trucks heading toward North Korea have a heavier load than those coming into China.” It occurred to me that if things are left as they are, North Korea would be swallowed up by China even if China does not try to do so on purpose.
What breakthrough can North Korea make? The country has no other way out but to make competitive products by using its low-cost labor, its one comparative advantage over China. Given the North Korean regime, a realistic choice would be to induce foreign capital through a limited opening of its market, like establishing a special economic zone.
North Korea chose to turn Shinuiju into a special economic zone in 2002. However, after many twists and turns, the plan came to nothing. Early this year ― and for five years before that ― there had been a rumor that a special economic zone would be constructed at Bidan Island on the estuary of the Yalu River in North Korea.
So I visited the spot across from Bidan Island. This place that China calls “Darudao,” or Continent Island, is situated at the mouth of the Yalu River where it opens into the Yellow Sea.
But Bidan Island is not in fact an island; its western part is closely connected to Dandong, China, due to sedimentation. In Dandong, on Chinese land facing Bidan Island, there was a large-scale digging project going on in earnest to create an industrial complex to induce foreign investment. But on Bidan Island, right next to the site, North Korean farmers in shabby clothes were weeding the fields with their bare hands. The Chinese who guided me to Bidan Island said with a sigh, “If a special economic zone were to go up here, North Korea and China would develop together, but I have a feeling that North Korea is still stuck in an age like China’s Cultural Revolution, when people worshipped their leaders as idols.”
To prevent Bidan Island from being completely attached to China, the accumulated piles of earth and sand from the digging project should be dredged soon. For the same reason, North Korea should not postpone taking a drastic measure, such as establishing a Bidan Island special economic zone, to prevent China from incorporating its economy.
I wonder when North Korea, overwhelmed by hunger, will be able to make a bold decision and create a special economic zone on Bidan Island.

*The writer is the Beijing correspondent of the JoongAng Ilbo.

by Zhang Se-jeong
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