A Chinese firm says it wants to invest US$2 billion in North Korea's Rajin-Sonbong region, which the North has been trying to develop as a special economic zone. Shangdi Guanqun, a Beijing-based investment firm, signed a letter of intent with North Korea's Investment and Development Group on Dec. 20 last year, the Wall Street Journal reported Wednesday.
A letter of intent is not binding. "The plan is to develop infrastructure, including docks, a power plant and roads over the next two to three years, followed by various industrial projects, including an oil refinery, over the next five to 10 years," an executive of the Chinese company told the daily. The company is "waiting for a response from the North Korean government before applying for approval from China's Ministry of Commerce."
"The $2 billion figure was what the North Korean side had hoped for, not necessarily what his company could deliver," the daily quoted him as saying. "It's all pending at this stage, and it's really up to the [North] Korean side to make the decision."
Shangdi Guanqun, a subsidiary of state-owned real estate enterprise Shangdi Purchase-Estate Corporation, has a staff of 20 and a capital of 50 million yuan (approximately W8.5 billion). Although it is "under the administration" of the state-owned enterprise, Shangdi Guanqun is "100 percent private," the daily quoted the executive as saying.
Rumors circulate in northeastern China that besides Shangdi Guanqun, Tianyu, a real estate firm in Yanbian Korean Autonomous Prefecture, is also considering investing in Rajin-Sonbong.
A local source said, "According to rumors circulating in the North, the Stalinist country has finished attracting investment amounting to $10 billion in the Rajin-Sonbong region and tangible results will come out in March or April. But it remains to be seen whether actual investment will be made."
Meanwhile, the North is hoping to send 2,000 women workers to Mudanjiang, in the Chinese province of Heilongjiang, to earn hard currency for the regime. A source in northeast China said, "Since last year, the North has been considering sending 2,000 women workers to the Dongning region in Mudanjiang. I understand that a senior official of the North Korean Consulate General in Shenyang recently visited Mudanjiang to discuss this matter."
But a North Korea expert in Beijing said the chances are slim because Chinese regulations on employment of foreign workers are complicated and the North is asking for too much money. "Last October, a Chinese enterprise in Tumen had talks with a North Korean agency over the dispatch of 100 North Korean workers there, but the deal fell through because the North demanded three times the wages that the firm offered," he added.