A media report has grabbed the attention of South Koreans since it said Monday that China's northeastern Jilin Province is seeking to extend its 10-year lease contract on the use of North Korea's Rajin Port by another decade. The original contract was signed in 2008. Seoul officials are trying to confirm the report that quoted the province's official attending China's National People's Congress. The Chinese move came after Russia obtained a 50-year lease on one of the port's piers.
The focal point is whether the lease contracts will lead to North Korea's opening up to the outside world. It is too premature to conclude that the world's last Stalinist country is heading in that direction. But what's clear is that the impoverished state is desperate to bring in much-needed foreign investment to get out of its economic difficulties, especially amid the U.N. sanctions imposed on the North for its second nuclear bomb test last year.
Since the start of this year, the North has stepped up its efforts to expand foreign use of the port located at the delta of the Tumen River where the country shares its border with China and Russia. In the joint New Year editorial, the North vowed to increase its foreign trade to give a boost to its dilapidated economy and improve the living conditions of its people. Early in January the reclusive country designated Rason, a town in Rajin Port, as a ``special city" to expand trade and draw more foreign capital.
The designation came after North Korean leader Kim Jong-il visited the town, which was named the country's first free trade zone, in 1991. But it has done little to attract investment because of its failure to lift restrictions on foreign business activities. But now, the city is basking in the limelight again as the North is trying to open up the port and push for development in cooperation with China and Russia.
In fact, the development project is gaining momentum because the three countries share common ground in the Tumen River estuary: something they can all profit from. In particular, China shows great interest in the project as the port gives its three northeastern provinces easy access to the Pacific. The Chinese side plans to pave a 93-kilometer road linking Hunchun in its Jilin Province to the North Korean port.
It is certain that China can speed up its exploration of North Korean mines to secure the stable supply of minerals with the help of the road and the port. The development of the port is also seen as part of China's effort to make inroads into the North and increase its economic clout there. Last October, Chinese Premier Wen Jiabao promised to sponsor a new bridge project on the Yalu River to connect North Korea to China.
It would be desirable if the opening of the port provides a real opportunity for the North to reform its rigid state-controlled economic system. But the grim reality shows that the North has little sign of initiating free market reform and opening up to the outside world. More worrisome is that the North might deepen its economic dependence on China at the expense of inter-Korean cooperation.