Chinese tycoon to run Korean SAR

PUBLISHED : Tuesday, 24 September, 2002, 12:00am
UPDATED : Tuesday, 24 September, 2002, 12:00am

Yang Bin, reputedly one of the mainland's richest men, has been chosen to lead North Korea's new Special Administrative Region on its border with China.

Mr Yang yesterday told a news conference in the North Korean capital that he would be chief executive of the SAR, a Hong Kong-style capitalist enclave, and that it would have its own legislature and courts. Furthermore, it would use US dollars as its currency, as it would be cut off from the rest of the country.

He said the SAR would be built on 132 square kilometres of land at Sinuiju on the Yalu River, opposite the Chinese city of Dandong in Liaoning province.

Pyongyang announced last week it wanted to turn the city into an international commercial and tourism hub. At present, however, the contrast could not be more stark. Sinuiju is an impoverished, undeveloped industrial and agricultural city, with poor roads, power supply and other infrastructure.

This did not seem to daunt Mr Yang yesterday, as he said he would seek international capital to build the infrastructure necessary for the zone.

The main businesses of the zone will be industry, finance, and processing. Gambling will be permitted, but its revenues cannot exceed 10 per cent of GDP.

Last night, Cho Chang-dok, North Korea's vice-minister in charge of the economy, met Mr Yang to congratulate him on his appointment and re-affirm his government's support for the project. Mr Yang will be formally inaugurated as chief executive of the zone at a ceremony to be held in Pyongyang today.

Officials said that their SAR would differ from Hong Kong and Macau, in that its chief executive could be a foreigner and that he would be able to over-rule the decisions of its legislature. 'We want to attract as much investment as possible and show that the world should trust us,' one said.

Analysts and foreign businessmen yesterday expressed surprise at Mr Yang's announcement, saying it was hard to believe that a country as xenophobic as North Korea had chosen a foreigner to run part of its territory like his own company.

As chairman of the Hong Kong-listed Euro-Asia Agriculture (Holdings), Mr Yang, a 39-year-old Chinese with Dutch nationality, has been no stranger to controversy.

Over the past few months, Euro-Asia's share price has plunged amid speculation Mr Yang and his company were being investigated by the central government for tax irregularities and that his company was experiencing financial difficulties. He later admitted that his company had been investigated by mainland tax authorities.

In Pyongyang, Mr Yang said he believed the central government would support the zone, but said that Beijing had learned of it only when it was made public by the North Korean government on Friday, as it was a private matter between himself and Pyongyang.

He said he was chosen for the job because he had been active in North Korea for two years, developing agricultural projects and introducing high technology from Holland, which had earned him the trust of the government.

The new SAR is a more ambitious project than a development zone in Rajin-Sonbong, on the northeast coast of North Korea, which opened in 1991 and has failed to attract significant investment. Its biggest venture is a casino owned by the Emperor Group of Hong Kong.

Mr Yang said that the Raijin-Sonbong zone had failed because of poor location and too much interference from the central government. His zone is supposed to be free of such interference.