Chinese RMB to Be Legal Tender in SEZs

A Chinese newspaper alleged today that Chinese Remnimbi (RMB) will become legal tender in North Korea’s Special Economic Zones (SEZs) at Rasun, Hwanggeumpyong and Wihwa Island.

According to the article carried by The Beijing News, the currency information was revealed during a meeting for potential SEZ investors held in Beijing yesterday, alongside plans for a joint venture bank, visa-free transit for foreigners and their vehicles into and out of the zone, and the free movement of capital.

If true, the currency move would represent an important step for Sino-North Korean relations, Sejong Institute researcher Lee Tae Hwan noted, saying, “Obviously, RMB have been in circulation in lots of places for quite some time, but this measure would be an institutional device with the potential to deepen North Korea-China cooperation.”

However, the news was not mentioned in an article released today by People’s Daily, the publication of the Communist Party of China.

What the People’s Daily article did do was make clear how the two sides foresee the function of the SEZ areas. Rasun, it said, “will focus on the development of raw materials, equipment, high tech products, light industry, the service sector and modern agriculture.” Conversely, Hwanggeumpyong and Wihwa Island “will focus on the development of information industries, tourism, modern agriculture and garment manufacturing.”

The Chinese Ministry of Commerce has also moved to back efforts to stimulate interest in the SEZs.

According to the ministry homepage, Vice-Minister Chen Jian was in attendance at the investor meeting in Beijing, where he told the audience, “These two countries have already established joint management committees for the two SEZ zones, and are in the process of negotiating development plans, legal structures, customs and communications.”

He went on to refer to the development projects as akin to crossing a river by feeling the stones, but added, “We actively encourage and will support investment in Hwanggeumpyong-Wihwa Island and Rasun by Chinese domestic enterprises.”

Representatives of more than 160 Chinese enterprises reportedly attended the event, which followed on from a similar one on the September 7th in Changchun, Jilin Province and another in Xiamen, further south in Fujian Province, on the 9th.

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