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2017.06.28
| Won | Pyongyang | Sinuiju | Hyesan |
|---|---|---|---|
| Exchange Rate | 8,070 | 8,050 | 8,095 |
| Rice Price | 5,800 | 6,000 | 5,900 |
North Korea is encouraging traders and the country’s new moneyed classes to cooperate with foreign firms as part of nationwide plans to target Chinese investment. A source informed Daily NK today that a recent directive has been handed down that allows for the establishment of joint venture companies even in areas that have not been designated as special economic zones (SEZs), and that some personnel are being sent to China to seek out fresh sources of capital.
The source spoke to Daily NK on the 19th from Sinuiju in North Pyongan Province, explaining, “In October this order came down in the name of the National Economic Development Committee urging us to attract private foreign investors. It was said that traders or company managers should actively pursue joint factory projects where possible. It’s unrelated to SEZ plans.”
The source continued, “Managers are contacting their relatives or business acquaintances to see about new investments, even if only for small things like eateries. In particular, economic cadres from the Provincial People’s Committee are searching out those ‘donju’ who are rumored to have earned some money through trade to get them to embark on joint ventures with China.”
According to the source, the North Korean authorities envision a scenario similar to that of the country’s SEZs, where Chinese investors provide the equipment, materials and construction costs, while the North oversees the provision of labor and land.
“That the authorities are encouraging individuals to attract investment is a sign that there is keen demand for large amounts of money,” the source said. “Existing factory facilities were built a long time ago and are now useless as they have not been operational for ages. The authorities want to bring in foreign money and construct the factories anew.”
According to the officials from the Provincial People’s Committee, would-be Chinese investors are demanding more transparency in terms of wages and the management of labor. They want to be in sole charge of accounting and management, and demand the right to pay staff in accordance with the profitability of the enterprise.
An ethnic Korean based in Liaoning Province who does business with the North has confirmed the story. He recalled how a North Korean associate recently contacted him to sound him out about investing.
“I told them that I didn't want to speak over the phone, and said let’s meet in person,” he said. “That way we can hash things out in more detail. They said they had an instruction on joint ventures from the Supreme Leader. But Chosun cannot be trusted and there are so many instances where they have gone against the law, so I want to see the document before I make any decisions.”
“China wants normal ‘deals’ with the North rather than economic cooperation,” he emphasized. “We will ask them for sojourn and residency rights. If there is no method to directly give the workers their wages, productivity will not rise, so that is an area in need of improvement.”
The source spoke to Daily NK on the 19th from Sinuiju in North Pyongan Province, explaining, “In October this order came down in the name of the National Economic Development Committee urging us to attract private foreign investors. It was said that traders or company managers should actively pursue joint factory projects where possible. It’s unrelated to SEZ plans.”
The source continued, “Managers are contacting their relatives or business acquaintances to see about new investments, even if only for small things like eateries. In particular, economic cadres from the Provincial People’s Committee are searching out those ‘donju’ who are rumored to have earned some money through trade to get them to embark on joint ventures with China.”
According to the source, the North Korean authorities envision a scenario similar to that of the country’s SEZs, where Chinese investors provide the equipment, materials and construction costs, while the North oversees the provision of labor and land.
“That the authorities are encouraging individuals to attract investment is a sign that there is keen demand for large amounts of money,” the source said. “Existing factory facilities were built a long time ago and are now useless as they have not been operational for ages. The authorities want to bring in foreign money and construct the factories anew.”
According to the officials from the Provincial People’s Committee, would-be Chinese investors are demanding more transparency in terms of wages and the management of labor. They want to be in sole charge of accounting and management, and demand the right to pay staff in accordance with the profitability of the enterprise.
An ethnic Korean based in Liaoning Province who does business with the North has confirmed the story. He recalled how a North Korean associate recently contacted him to sound him out about investing.
“I told them that I didn't want to speak over the phone, and said let’s meet in person,” he said. “That way we can hash things out in more detail. They said they had an instruction on joint ventures from the Supreme Leader. But Chosun cannot be trusted and there are so many instances where they have gone against the law, so I want to see the document before I make any decisions.”
“China wants normal ‘deals’ with the North rather than economic cooperation,” he emphasized. “We will ask them for sojourn and residency rights. If there is no method to directly give the workers their wages, productivity will not rise, so that is an area in need of improvement.”
