North Korea's development of special economic zones bordering China will likely serve as a chance to elicit Pyongyang's opening over the long term, but the move will also deepen its economic dependence on China, a report indicated Thursday.
New North Korean leader, Kim Jong-un, has been cementing his control in the communist country following the sudden death of his father, Kim Jong-il, in December.
A visit to China by Jang Song-thaek, Kim's powerful uncle and key guardian, is viewed as aimed at securing hefty investment from the major ally to develop special economic zones in Rason, the North's northern tip and on Hwanggumphyong and Wihwa islands, bordering China.
"If production is made in those special economic zones by combining China's capital and the North's labor, the impacts on the North Korean economy are expected to expand," Choi Ji-young, an economist at the Bank of Korea (BOK), said in the report.
The North and China broke ground on Hwanggumphyong last year to develop it into an economic zone, a move that came on the heels of then North Korean leader Kim Jong-il's trip to China to study the closest ally's economic development.
South Korea's relations with the North have been frozen since President Lee Myung-bak took office in 2008, virtually cutting inter-Korean economic cooperation.
In response, the North has deepened its ties with China in an effort to help revive its moribund economy alongside stricter international sanctions following nuclear and rocket tests. In 2011, Pyongyang's trade with China accounted for about 89 percent of its total, according to the BOK.
The report said the potential success of developing such economic zones is likely to serve as a catalyst for the North's opening over the long haul, but will also make it more economically reliant on China.
Choi said North Korea is focused on opening the special economic zones for now, but it is possible economic reform policies would accompany that.
The re-emergence of economic officials in the North's 2012 power reshuffle and its emphasis on the role of cabinet, which deals with economic policies, can be cited as evidence for Pyongyang's possible economic reforms, she added. Choi declined to give further specifics.
Recently, media speculation increased that the North may put its new economic reform policies into action in early October, including the introduction of market prices.
Pyongyang has not officially announced any economic reform measures under the Kim Jong-un regime. In 2002, the North took economic reform steps, but they were largely viewed as having failed.
The North Korean economy grew 0.8 percent on-year in 2011, compared with a 0.5 percent contraction a year earlier, according to an estimate by the BOK. (Yonhap)