Around the time when North Korean leader Kim Jong-il embarked on his seventh trip to China, plans for bilateral economic cooperation started circulating in northeastern China. They include the joint development of an island called Hwanggumpyong in the lower reaches of the Duman (or Tumen) River, and of the Rajin-Sonbong special zone in North Korea. It seems that the North deliberately leaked the document to lure investment from Chinese businesses.
The document purports to be written by a negotiating body of the central governments of North Korea and China for the development of the two zones.
According to the document, the North agreed with China to open up Hwanggumpyong more radically than the Kaesong Industrial Complex to foreign businesses. The two industrial zones will have landline and mobile phone connections as well as Internet access, which is unavailable elsewhere in the North. It will also let both foreign manufacturers and banks in.
The plan envisages a more flexible labor market system, allowing foreign companies to hire and lay off North Korean workers on their own terms, while private ownership is guaranteed by making it possible to transfer companies' assets to other people.
At the Kaesong Industrial Complex, by contrast, South Korean companies cannot freely hire or fire workers, and experience great difficulty in communications, transport and customs.
The document proposes making Rajin-Sonbong the leading manufacturing complex for heavy industry such as petrochemicals, cars, machinery and shipbuilding, and cutting-edge technologies including computers, communications, bio-medicine and logistics.
Hwanggumpyong, meanwhile, will be a hub of light industry including software outsourcing. In order to achieve these goals, an airport, port, highway, and railway are planned in these areas.
The question is how to pay for it. Yoon Seung-hyun, a professor at China's Yanbian University, said, "The projects that have been disclosed alone will cost US$10 billion. The market economy and guarantee of private ownership of wealth in these two zones will clash with the North Korean system and increase uncertainty and instability."