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At Chinese border, North Korean investment opportunities abound (in theory)
September 1, 2017 / 9:37 AM / 24 days ago

At Chinese border, North Korean investment opportunities abound (in theory)

Tourists pose at the border with North Korea in Tumen, China August 30, 2017. Picture taken August 30, 2017. REUTERS/Sue-Lin Wong

TUMEN, China (Reuters) - If you have 800 million yuan ($120 million) to spare, you could invest in slot machines and roulette tables to fill casinos in North Korea’s Namyang International Tourism Village, on the border of China.

If your budget is smaller, how about spending 250 million yuan to build a cable car connecting China and North Korea over the scenic Tumen River?

Otherwise, 200 million yuan would get you in on an investment project to turn the birthplace of the current North Korean leader’s grandmother into a tourist zone.

Just don’t ask about United Nations sanctions.

This week, as the world reacted with outrage to North Korea’s firing of a missile over Japan, local Chinese government officials along the border of North Korea took a different approach: they held a two-day conference highlighting, among other things, the unique investment opportunities in one of the world’s most isolated countries.

Tumen city, which sits just across the river from Namyang in North Korea, has an economy closely intertwined with its unpredictable neighbor.

Thousands of Chinese tourists stop off in Tumen on their way into North Korea where they shop, eat, gawk and gamble – an activity tightly restricted at home.

“INTERNATIONAL SITUATION NOT IDEAL”

While local Chinese government officials vocally support investment into tax-free shopping zones, theme parks and a railway connecting North Korea and Russia, their presentations fail to mention one key thing – the impact of mounting international sanctions against North Korea.

China’s commerce ministry banned new or expanded investment into North Korea by Chinese companies late last month, in line with United Nations Security Council sanctions passed earlier in August.

“We’d like to facilitate investment into North Korea but the current international situation is not ideal,” local tourism official Liu Bo told Reuters on the sidelines of the conference.

“So we’ve shifted our focus towards developing tourism along the border on the Chinese side instead. What else can we do? All we can do is wait and hope that the geopolitical situation improves.”

A view from the border crossing in Tumen, China of new construction and the North Korean Namyang city in the background August 30, 2017. Picture taken August 30, 2017. REUTERS/Sue-Lin Wong

At another event at the associated Northeast Asia trade expo in nearby Changchun, around 30 North Korean companies filled the corner of a pavilion. They were selling products ranging from diet pills to ginseng flavored toothpaste and the latest stamps celebrating the North’s successful test launch of an intercontinental ballistic missile.

Next to a stand hawking bean paste, a few North Korean traders were trying to sell rocks and musical instruments.

“One of our most expensive stones sells for 15,000 yuan, it’s natural formation looks like two students learning from a teacher, it’s very rare,” said one of the vendors who declined to be named. 

UP IN THE AIR

Slideshow (4 Images)

In Tumen, those looking to invest on a larger scale were given prospectuses promoting projects including developing seafood trade and light manufacturing industries in the wider Yanbian autonomous region. Those sectors have been hit by the latest sanctions that ban the sale of North Korean seafood and cap the number of North Korean laborers overseas.

“Local businesses here are very disappointed with the latest UN sanctions because one of the appeals of opening a factory in an economic zone in Yanbian is the ability to use North Korean workers who will work for much lower wages,” said a Korean-Chinese business man at the conference who declined to be named because of the sensitivity of the issue.

He said there were still thousands of North Korean factory workers in Yanbian but some had already been sent home.

Expectations were that visas for those workers remaining would not be renewed and plans to allow North Koreans to work during the day and head back across the border at night didn’t look possible, he added.

“Everything’s so up in the air right now. I don’t think the local government will be able to attract investment into North Korea, or even into the local region.”

But for many, there’s not much else to do except remain hopeful the situation on the Korean Peninsula will improve.

“Sooner or later, North Korea will have to open up,” said Jiang Hua, a local Korean-Chinese businessmen at the conference.

“And when that happens, the tourism industry from China into North Korea will just explode.”

Reporting by Sue-Lin Wong; Editing by Lincoln Feast

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