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