Xinhua, the Chinese state news agency, reported on March 8 that Li Longxi, a Communist Party of China (CPC) representative for the Yanbian Autonomous Prefecture, the part of Jilin Province which borders North Korea, had obtained a ten year lease of part of the port at Rajin on North Korea’s east coast.
As a result of this and other deals, attention is being drawn to developments in the area.
The latest agreement seems to represent the fruits of a series of bilateral meetings between China and North Korea, including the visit of Wang Jiarui, leader of the International Department of the CPC Central Committee, to North Korea, and the visits of Kim Kye Gwan, Vice Foreign Minister of North Korea, and Kim Young Il, the head of the International Department of Chosun Worker’s Party, to China.
Russia also holds a 50-year lease on the No. 3 dock at Rajin, while Japan’s Sankei Shimbun cited “Rescue the North Korean People! Urgent Action Network,” a North Korean Human Rights NGO in Japan, in a recent report claiming that the North Korean leadership has prepared a plan to completely open Rasun Special City to investment.
Jang Sung Taek, Director of the Ministry of Administration of the Chosun Worker’s Party and Kim Jong Il’s brother-in-law, is reported by Sankei to have told officials during an on-site inspection in Rasun, “This location will be completely open in six months.”
In its New Year’s Statement for 2010, North Korea announced that it was aiming to increase its volume of international trade so as to contribute to economic construction and improve the citizens’ quality of life. But that has not happened, indeed quite the opposite, and these look most like strategic attempts to change the international trading environment following the realization that a strong and prosperous nation will not be built by 2012 without external investment.
The failed currency swap has only exacerbated what looks like a perilous economic decline, and is probably a big factor in the expediting of planned measures.
However, experts do not think they will have any marked effect.
In a phone interview with The Daily NK, Lim Eul Chul, Director of International Cooperation for the North Korea Development Center at Kyungnam University, stated, “The right to develop Rasun harbor, which consists mainly of infrastructure projects like roads and harbor improvements, is a far cry from the short-term revenue which the North Korean regime is looking for.” He anticipates that China’s use of Rasun harbor will have a very small impact on the North Korean economy overall.
In addition, a researcher with a national policy institute in Seoul commented that the scale of Chinese investment will only be sufficient to acquire a means to export goods via the East Sea, not full-blooded investment in the area as a whole. At the current stage, even if Rasun pushes forward and opens up, success can’t be guaranteed.
In conclusion, Chinese investment is not going to be sufficient to ease the economic crisis in North Korea, even if both the legal and institutional structures governing investment, and sincere moves towards denuclearization, are made.
At the very least, the anonymous national policy research institute researcher anticipates, “North Korea can’t expect to attract investment unless big improvements are made to the United States-North Korea relationship.”
