Chinese Merchants from Zhejiang are the Biggest Investors in North Korea

[imText1]It has been said that Chinese merchants from Zhejiang are the biggest investors in North Korea.

According to a report on the 26th by Heilongjiang daily, a Korean newspaper run by Koreans in China, most Chinese investors in North Korea are from Zhejiang, Jilin, Liaoning, Jiangsu, and Guangdongsheng. Among them, those investors from Zhejiang are the largest in scale.

Zhejiang Public Trade Company Limited won the right to manage three floors of the First Department Store in Pyongyang by reaching a partnership pact with the department last May. The Chinese company named the three floors Zhejiang Commodities Market, and has sold household goods and apparel in cooperation with the department. Yiwu City of Zhejiang supplies discount store goods to this market.

Some merchants from Zhejiang prefer to invest in some large-scale businesses such as developing mineral resources.

Ro Woon Roi, the holder of the right to manage the three floors of the First Department Store in Pyongyang, said, “Even though the profit from selling household goods in Pyongyang is 50-100% more than in China, the profit from the entire retail sales is not that much.”

He also said, “Electric appliances such as color TV sets and refrigerators are in huge demand, and their margins are higher than those of household goods.”

“Consumers from suburbs in North Korea buy intermediate grade goods while rural consumers choose low grade goods. Since rural consumers do not come to urban cities to enjoy shopping, producers sell wholesale goods to trade companies, and the trade companies take the goods to rural markets,” he added.

Jin Ryong San, a researcher in Jilin Northeastern Asia Institute, said, “The North Korean open economy policy would provide commercial opportunities valued at some hundreds of million dollars because everything is in huge demand in North Korea.”

“North Korea is especially in need of seeds, chemical fertilizers, and farm equipment because farming is North Koreans’ main industry. Chinese household goods and farm equipment are less expensive, and thus Chinese merchants are advantageous. However, they must be careful not to be reckless in investment. They should choose such cities as Shinuju Special Zone, Gaesung Zone, and Pyongyang, where the open economy policy was established early,” he pointed out.