North Korea and China break ground on economic zone

Jun 08, 2011 12:00 AM

North Korea and China broke ground on developing a joint economic zone on a border island, in a sign Pyongyang may undertake Chinese-style reforms of its troubled economy, a report said.
The ceremony drew about 1,000 people including Jang Song-Thaek, the brother-in-law of North Korean leader Kim Jong-Il, and Chinese Commerce Minister Chen Deming. Dozens of giant balloons with messages reading "North Korea-China friendship and joint development" floated in the air as a military brass band played festive songs, with hundreds of doves released, it said.

Pyongyang has drawn up a special law to set up a free trade zone on the island, called Hwanggumpyong in Korean and Huangjinping in Chinese, in the estuary of the Yalu river which runs along the border. North Korea said it would set up an economic zone on two river islands on the border, just days after Kim returned from a trip to study his neighbour's dramatic economic rise.
Beijing, Pyongyang's sole major ally, has called for a Chinese-style opening-up of North Korea's crumbling state-directed economy, and China has actively explored investment opportunities in the country.

But Pyongyang has been cautious in opening its doors to the outside world.
The North's economy is beset by serious shortages of electricity and raw materials and is grappling with persistent serious food shortages. International sanctions brought by the North's pursuit of ballistic missiles and atomic weapons have hurt its economy, restricting the communist state's access to international credit.

Residents in the North's border city of Sinuiju were responding positively as the project could significantly improve their situation. An ethnic Korean in the Chinese border city of Dandong was quoted as saying: "It is a good thing if the development of Hwanggumpyong serves as a momentum to spur the opening-up of North Korea's economy."
But he expressed concern that the project could deepen Pyongyang's heavy reliance on Beijing.

Chinese Premier Wen Jiabao had said Kim was invited to study China's dramatic economic development in the hope he would use the knowledge to revive his own country's economy.
But analysts said Kim's regime fears the loss of political control that such reforms would entail.

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