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Asia-Pacific

Chinese firms to develop DPRK free-trade islets

By Qin Jize (China Daily)
Updated: 2010-02-24 07:49
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Pyongyang announced two islets in Yalu River will be developed by Chinese enterprises in an attempt to strengthen international economic ties and increase foreign investment, reported Yonhap news of the Republic of Korea (ROK).

The agency quoted the sources as saying the two islets adjacent to China's northernmost port city Dandong have been leased for 50 years to Chinese firms for development. It said the planned investment scale is about $300 million and $500 million respectively.

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It said the Democratic People's Republic of Korea (DPRK) has designated the two islets as free-trade areas, allowing foreigners come in and go out visa-free.

Dandong Chinese Business Overseas Investment Company has posted details of the preparation of the islets proposed developments on its website.

The planned projects would include the construction of hotels, a golf course, entertainment facilities and agricultural parks.

Earlier reports showed that the DPRK is planning to open up 12 special zones for foreign investors and Pyongyang would pass a law next month declaring the zones in five or six cities.

The foreign firms would also be offered cheap rents for 50 years, either on their own or jointly with a local partner.

The zones would be in cities including the capital Pyongyang; the southern border city of Kaesong, which already has a Seoul-funded jointly-run industrial estate; Sinuiju on the northwestern border with China; and Rason in the northeast, near the Chinese and Russian border.

Last month, the country announced that it was setting up a state development bank to encourage foreign investment, under instructions from the leader Kim Jong-il.

Another establishment-the Korea Taepung International Investment Group-will help attract foreign funds to the bank. Taepung's deputy head is a prominent Korean-Chinese businessman, who has sparked speculations that the bank will focus on China, the country's main trade partner.

Chris Devonshire-Ellis, working with Dezan Shira China Group earlier gave a speech on foreign investment in the DPRK, saying the country is slowly starting to develop its international trade

"We found the DPRK Government open, pragmatic and serious about attracting foreign investment All this will take time to develop and mature," he said.

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