China set to invest in N Korean trade zone

China set to invest in N Korean trade zone

SEOUL-Agence France-Presse
China set to invest in N Korean trade zone

Statues of late North Korean leader Kim Jong-il and the late founder Kim Il-sung are seen. Kim Jong-il had agreed with China on a large trade zone investment. Reuters photo

China has agreed to invest about $3 billion in developing North Korea’s northeastern free trade zone as an export base, a report said yesterday.

The deal was probably reached before or just after the North’s long-time leader Kim Jong-Il died on December 17 of a heart attack, South Korea’s Yonhap news agency said.

China will build an airport, a power plant, a cross-border railway and piers in the North’s Rason economic zone bordering China and Russia by 2020, it said.

In return China has secured the right to use the Rason port for 50 years, the agency said, citing sources in Seoul and Beijing.

The port -- formerly known as Rajin and Sonbong -- would give China’s northeastern provinces direct access to the Sea of Japan.

North Korea is striving to revitalize its economy through foreign investment in Rason, which was declared a special economic zone in 1991 but failed to flourish.

China, Pyongyang’s sole major ally and biggest trade partner, is actively exploring investment opportunities in North Korea as South Korea’s economic influence dwindles amid political tensions.

The North’s dependence on Beijing grew as international sanctions over its missile and nuclear programs restricted access to international credit.

Last June the two countries broke ground for a joint economic zone near the North’s west coast, on an island in the estuary of the Yalu border river.