April 19, 2013 09:07
A majority of Chinese businesspeople with investments in North Korea are apparently having problems recovering their money and being forced to leave the country.
Citing a Chinese businessman in the town of Dandong near the border with North Korea, the Chongqing Daily reported on Thursday that close to 100 Chinese investors have been staying indefinitely at hotels in downtown Pyongyang as they wait to recover money. A majority has been unsuccessful so far, and some have even been deported, according to the newspaper.
As the number of overdue payments increases at North Korean trading companies, deals based on credit have declined markedly in Dandong. Merchants now demand cash before handing over goods.
Last August, one incident brought attention to the perils of investing in North Korea. Fertilizer and mineral producer Xiyang Group, based in Liaoning Province, was forced out of North Korea and had to forfeit its 240 million yuan investment in an iron mine.
"The biggest mistake Xiyang Group made was to ignore the dangers of investing in North Korea," said Jiao Qiming, head of a Chinese trading company in Dandong. "Once a dispute occurs, it is impossible to beat the North Korean government."
At present, some 2,000 businesses are operating in Dandong along the North Korea border and about 500 of them trade with the North.
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