N.Korea's Cross-Border Business with China Picking Up

[candie111]

Cross-border business between North Korea and China is picking up, with construction of a new bridge connecting Sinuiju in North Korea to China's Dandong across the Apnok (or Yalu) River finally about to begin. And a Chinese company apparently obtained use of a dock at North Korea's Rajin-Sonbong port in North Hamgyong Province and began shipping coal out of the communist country.
Diplomatic sources in Beijing say cash-strapped North Korea is stepping up trade with China due to strained ties with South Korea compounded by UN sanctions. But private Chinese companies are on the whole wary of investing in North Korea due to political uncertainties and a lack of infrastructure there.
◆ New Bridge
A source in Dandong said Wednesday that North Korea and China will start construction of the bridge as early as Friday. The two sides agreed to build the bridge during Chinese Premier Wen Jiabao's visit to North Korea in October last year, with work expected to start this October.
China insists on having the bridge connect the newly renovated area of southern Dandong and southern Sinuiju, but North Korea wanted it to cross over Wihwa Island in Apnok River and connect Dandong with the old part of Sinuiju. The North claimed the route preferred by China would necessitate building a long embankment but in fact seems to have been nervous that a direct link to Pyongyang would cause security concerns like making it easier for North Koreans to flee.
But the North seems to have caved in. A source said construction will begin in March but a groundbreaking ceremony will be held before the end of this year.
Meanwhile, transport of goods and products has picked up via the Hunchun- Rajin-Sonbong route as part of an economic cooperation project. Around 500 truckloads of coal from China's Jilin Province were shipped out of Rajin-Sonbong Port on Dec. 7 and are being transported to Shanghai across the East and South seas.
◆ Wooing Chinese Investment
Chinese officials with close ties with North Korea say the North has used to demand hard cash for business deals but is now taking a more flexible approach. The Global Times, a sister publication of the People's Daily, published a series of reports Saturday about the Rajin-Sonbong special economic zone of North Korea. It said street lights and neon signs powered by windmills have appeared in the region, which had earlier been pitch dark at night, while the previously ubiquitous soldiers have vanished.
North Korea allowed 4,000 Chinese residents in the area to rent commercial property and agreed to designate an area in the Rajin-Sonbong special economic zone to be jointly administered by the two countries.
North Korea had offered China to develop one or two islands in the estuary of the Apnok River on a 50-year lease, but when China demurred it apparently offered a 100-year lease and even allowed construction of golf courses and other recreational facilities.
◆ 'Strictly Business'
Many private Chinese companies are reticent about investing in North Korea. Not only is there a lack of business laws to protect their investment, there are also too many political uncertainties. As a result, the Chinese government is not playing a very active role. In the case of the bridge across the Apnok River, North Korea apparently wanted Chinese state-run companies to take part in construction, but Beijing declined.
One source in Beijing said some Chinese companies are showing great interest in developing the Rajin-Sonbong area, but most are biding their time. "Chinese businesses still don't seem to trust the sincerity of North Korea's desire to open up its economy," the source added.
The four-lane bridge linking Langtou in Dandong and Sinuiju in North Pyongan Province will be 20.4 km long and 33 m wide. China will foot the entire bill of around W300 billion (US$1=W1,163). Transport authorities in Liaoning Province selected six finalists from 22 designs for the bridge from eight design companies.
Dandong is the point where 70 percent of trade between China and North Korea passes, but the existing bridge, which was built in 1937, is dilapidated.