Chi­nese firms eye in­vest­ing in N.Korea, see good prospects

Global Times US Edition - - FRONT PAGE - By Zhang Han

Chi­nese com­pa­nies on Thurs­day ex­pressed op­ti­mism in the North Korean mar­ket as ten­sions ease dra­mat­i­cally on the Korean Penin­sula, say­ing the mar­ket is an ocean of op­por­tu­ni­ties, al­though risks still ex­ist.

Hot Tex Woolen Com­pany, a fab­ric sup­plier from East China’s Jiangsu Prov­ince, has re­ceived or­ders worth 300,000 yuan ($43,282) from a North Korean fab­ric dealer after the Py­ongyang In­ter­na­tional Trade Fair in Septem­ber, Li Guang, the com­pany’s for­eign trade man­ager, told the Global Times on Thurs­day.

This is the first time that Li’s com­pany at­tended the trade fair, which is held in May and Septem­ber an­nu­ally. The com­pany has been in­ter­ested in the North Korean mar­ket for years but “hes­i­tated over po­lit­i­cal un­cer­tainty on the Korean Penin­sula,” Li said.

Ac­cord­ing to Qi Chen­gang, or­ga­nizer of a Chi-

nese del­e­ga­tion to the fair, a del­e­ga­tion of North Korean of­fi­cials plans to visit China in mid-December to seek more co­op­er­a­tion after the Septem­ber fair.

The del­e­ga­tion is ex­pected to brief their po­ten­tial Chi­nese part­ners about the needs of North Korea’s mar­ket and lo­cal reg­u­la­tions to fa­cil­i­tate their busi­ness in the coun­try, Qi told the Global Times on Thurs­day.

“For busi­ness peo­ple un­fa­mil­iar with the coun­try, tight reg­u­la­tions make it dif­fi­cult to en­ter North Korea,” Qi noted.

Some 40 Chi­nese com­pa­nies at­tended the trade fair in Py­ongyang in Septem­ber, al­most triple the av­er­age be­fore 2018. The fair at­tracted more than 320 com­pa­nies from Rus­sia, New Zealand, Italy and Cuba, among oth­ers, Wash­ing­ton Times re­ported in Septem­ber.

The num­ber of Chi­nese at­ten­dees to the fair “is likely to in­crease next year as long as the sit­u­a­tion on the penin­sula im­proves at the cur­rent pace,” Qi said. “Chi­nese and for­eign com­pa­nies are all keen on this mar­ket with few com­peti­tors,” Qi noted.

The bian­nual trade fair is spon­sored by North Korea’s Min­istry of Ex­ter­nal Eco­nomic Re­la­tions and the fair is be­lieved to be the largest in­ter­na­tional ex­hi­bi­tion held in North Korea, ac­cord­ing to the Xin­hua News Agency.

A new trend

For Wang Ge, deputy man­ager of Tian­jin­based Saint Ngong Tat Ma­chin­ery Com­pany (SNT), which spe­cial­izes in food pro­cess­ing equip­ment, pack­ag­ing ma­chines and re­lated prod­ucts, North Korea is a mar­ket with a great po­ten­tial, due to the coun­try’s food short­age and the lack of ad­vanced food pro­cess­ing equip­ment.

Be­cause of the progress in re­la­tions be­tween North Korea and South Korea, Wang said that the mar­ket is not only at­tract­ing Chi­nese in­vestors. Wang said that a Sin­ga­pore com­pany she knew from the fair is al­ready man­u­fac­tur­ing fruit pro­cess­ing ma­chines for North Korea.

North Korean work­ers are of high qual­ity at rel­a­tively low cost, said Wang, not­ing that the com­pany is con­sid­er­ing a joint-ven­ture com­pany in North Korea after learn­ing more about the North Korean mar­ket, the coun­try’s laws and reg­u­la­tions.

In­vest­ing in North Korea will be a new trend as the coun­try has in­tro­duced in­cen­tives and pref­er­en­tial poli­cies to boost for­eign in­vest­ment, Lü Chao, a re­search fel­low at the Liaon­ing Academy of So­cial Sci­ences, told the Global Times.

How­ever, since Py­ongyang con­tin­ues to face sanc­tions from the UN Se­cu­rity Coun­cil and is in the early stages of in­ter­na­tional trade, its le­gal and ad­min­is­tra­tive in­fra­struc­ture may not be ma­ture, Lü said.

Chi­nese in­vestors need to weigh the risks and avoid rash de­ci­sions, he noted.

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