Beijing 'Pouring Money into N.Korea's Special Economic Zone'

Rumor has it that China is getting directly involved in the development of North Korea's Rajin-Sonbong Port, once the center of the UN Development Programme's Duman (or Tumen) River project in 1991. A source in Beijing said Wednesday, "As far as I'm aware, North Korea and China's Commerce Ministry recently signed a memorandum of understanding outlining Beijing's investment of US$3.5 billion over five years beginning next year" in the special economic zone there. The source said China is investing in roads, ports and gas facilities in the region.

The Rajin-Sonbong area, at the mouth of the Duman River, is a strategic point of economic cooperation between the two countries, but neither bank is Chinese territory. One side is in North Korea and the other in Russia, so to get to the East Sea China had to borrow a port from either side. China did nothing about the UNDP initiative in the 1990s, but since the mid-2000s, it has set its eyes on the area.

North Korea for some reason rented out the best equipped dock there to Russia in 2008 but since last year it has been seeking investment from China to overcome dried-up aid from South Korea amid international sanctions. North Korean leader Kim Jong-il urged Chinese President Hu Jintao when he visited China in May this year to invest in the region.

But the rumor of direct investment from the Chinese government has not been confirmed. One diplomatic source in Beijing said, "I've heard nothing about the Chinese Commerce Ministry's direct involvement in negotiations. It's just one of many rumors since North Korea became active in developing the Rajin-Sonbong area."