By Jung Sung-ki
Staff Reporter
China has decided to invest about $10 billion in North Korea to revive the communist neighbor's faltering economy, a report said Monday.
The move comes as Beijing, the host nation for the six-party denuclearization talks, is making an effort to motivate the impoverished country to rejoin the multinational forum.
The decision was made when Wang Jiarui, chief of the Chinese Communist Party's international department, visited Pyongyang last week, Yonhap reported.
A U.S. congressional report, meanwhile, said China's supportive policy toward North Korea remains unchanged despite the North's continued missile firings and nuclear ambitions.
Beijing will invest the money to build railroads, harbors and houses in the cash-strapped country through North Korea's Taepung International Investment Group, a newly established international cooperation agency, Yonhap said.
Citing an unidentified source privy to Taepung group affairs, Yonhap said two major Chinese banks and some other multinational business organizations have almost concluded a deal with the North Korean investment agency.
A signing ceremony will be held in mid-March, the source said, adding the investment will be more than $10 billion, about 70 percent of North Korea's gross domestic product (GDP) of some $15 billion.
The investment from China would account for about 60 percent of total investments, he said.
North Korea believes attracting direct foreign investment through the Taepung group and a state development bank is not in violation of U.N. financial sanctions imposed after the communist state test fired long-range missiles last spring.
North Korea observers say the investment, if it goes as planned, will help convince Pyongyang to return to the stalled six-party talks to discuss the dismantling of its nuclear weapons program, as the North has called international financial sanctions as a major hurdle in rejoining the denuclearization talks, which involve the two Koreas, the United States, China, Japan and Russia.
Pyongyang withdrew from the six-party talks last April after the United Nations slapped harsher sanctions on the country in response to its missile and nuclear tests.
The North has said it is willing in principle to return to the talks, but has set two conditions - the lifting of sanctions and the United States agreeing to talks on a peace pact on the peninsula.
The United Nations is retaining its position that it could ease sanctions if there is substantial progress on the nuclear talks.
The punitive measures have hit the economy hard in a country that has relied on foreign aid to feed its people since it suffered a devastating famine in the 1990s.
The report released by the U.S. Congressional Research Service said that China believes North Korea's nuclear program doesn't pose a threat to itself but is a challenge to U.S. interests, according to Yonhap.
Against that backdrop, China will focus on intervening in North Korean affairs more than before rather than isolating its communist neighbor, it said.
North Korea reportedly plans to open up 12 special zones for foreign investors in an attempt to shore up its crumbling economy.
The communist state's parliament is scheduled to pass a bill next month declaring the zones in five or six cities, it said.
The newspaper, describing the move as a limited Chinese-style economic reform, said foreign firms will be allowed to rent cheaply for 50 years, either on their own or jointly with a local partner.
Much of the North's heavy industry has been hard hit by shortages of raw material and power. The country also suffers persistent severe food shortages, reportedly worsened by a bungled currency revaluation last November.
gallantjung@koreatimes.co.kr
1 | 30 people purchased 8,000 homes: data |
