Kim Jong-un is asking China for investment

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Kim Jong-un is asking China for investment

North Korean leader Kim Jong-un has requested Chinese investment from President Xi Jinping to develop four economic zones in the North, said a source familiar with the May 9 summit in Dalian, northeastern China, between the two leaders on Tuesday.

The four areas are the capital of Pyongyang, the western port city of Nampo, Sinuiju on the northwestern border with China and Chongjin on the eastern coast.

The Chinese provincial governments of Shandong and Liaoning could take the initiative in the investments in collaboration with large corporations and backed by the central government in Beijing. Since Shandong is just across the Yellow Sea from Pyongyang and Nampo and Liaoning borders Sinuiju, the close proximity of the designated Chinese provinces to the North are expected to facilitate investment and logistics.

If momentum builds with a successful Kim-Trump summit scheduled for June 12 in Singapore, such Chinese investment plans for North Korea can be pursued in detail, added the source.

“Most of the Chinese companies that have invested in North Korea so far have been small and middle-sized and therefore faced difficulty in developing necessary infrastructure,” the source said. “The topics of Pyongyang’s infrastructure, investment by large Chinese insurance firms anddevelopment of resource-rich mining centers such as Tanchon in North Korea’s South Hamgyong Province are also under discussion following the second North Korea-China summit.”

The Tokyo Shimbun in Japan cited its own source familiar with the second Kim-Xi summit in May and reported that “Xi expressed willingness to expand economic cooperation with the North in tandem with Pyongyang’s denuclearization process.”

Yun Gyong-woo, a China studies professor at Kookmin University, said Kim’s request for investment from China was similar to investments made by Hyundai Asan, part of South Korea’s Hyundai conglomerate, which spearheaded major projects in North Korea when inter-Korean relations were positive from 2000 to 2008. Under the Sunshine Policy of engagement with North Korea, South Korea’s liberal administrations opened up avenues for Hyundai Asan as well as many other smaller firms to cooperate economically with the North through joint projects like the Kaesong Industrial Complex.

“From the perspective of the Chinese government, economic collaboration would allow it to exert influence over the North while maintaining good relations,” Yun added.

In the meantime, regular flights between Chinese cities and Pyongyang resumed on Wednesday after 200 days of suspension, testifying to improved relations between North Korea and China. Flights between the two countries were indefinitely halted last November after the United States redesignated the North a state sponsor of terrorism. A spokesman for Air China explained that the reopening was due to an increase in consumer demand. Analysts cite the combination of loosening Chinese sanctions on North Korea and a seasonal increase in passengers as contributing to the resumption.

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