China economy

Open for business: North Korean economists tell finance forum attracting foreign capital is priority

  • China’s reform and opening up ‘serve as model for North Korea’
  • Economists take broad approach to increasing foreign investment
PUBLISHED : Monday, 26 November, 2018, 2:33pm
UPDATED : Tuesday, 27 November, 2018, 10:45am

The presence of four government officials from North Korea at an economic conference in Guangzhou last week was the latest sign the isolated nation is beginning to open up as it shifts its policy focus to improving its economy.

The delegation went to the southern Chinese city to take part in the 15th annual conference of the International Finance Forum (IFF), and delivered speeches at a Sunday afternoon panel on their hopes for economic cooperation between China and the Democratic People’s Republic of Korea (DPRK), as North Korea is formally known.

The officials explained the creation of North Korea’s economic development zones, the opportunities in the country, its appetite for overseas investment, and its desire to emulate other nations’ “advanced” financial systems.

The tour was the beginning of Pyongyang’s efforts to participate in this type of international economic dialogue. With the easing of the military tensions on the Korean peninsula this year, the authoritarian state is now trying to engage with the outside world to improve its economy.

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In a surprise announcement in April, North Korean leader Kim Jong-un said Pyongyang would shift policy to focus on developing its economy rather than on producing nuclear arms, as it had reached its weapons goals. The announcement was part of the easing of tensions that took place in advance of Kim’s meeting with US President Donald Trump in Singapore in June.

“We will look for more opportunities to cooperate with the international community in the future, including the IFF, so we will be able to introduce to the world more about the economic development and investment opportunities in the DPRK,” said Ri Chol-suk, general director of Economic Development Bureau of the Ministry of External Economic Affairs, at the panel on Sunday.

Ri led the team, whose members are in charge of the economic development zones as well as international economic and financial cooperation, to Guangzhou.

During the panel, the North Korea officials told the gathering that attracting more foreign capital to the country’s development zones was their top priority.

North Korea passed laws setting up development zones in 2013 and there were 22 across the country as of the end of last year. Each has one or several special functions – such as agriculture, tourism, industry or trade – and has regulations aimed at attracting foreign investment.

“Since the third meeting of the seventh congress of the Workers’ Party of Korea in April this year, we decided to concentrate on promoting economic development. This is the new strategic plan of North Korea,” said So Jong-chan, general director of department of treaty and law at the Ministry of External Economic Affairs.

“We need to grasp this opportunity to promote our opening to the outside world, especially economic cooperation and exchange with China,” So said. “We are promoting a series of tourism and advanced technology development zones to attract foreign investment.”

North Korea is also working on new financial policy rules to attract foreign investors, he said.

Hwang Chung-gwon, senior officer of Department 18 of the Presidium of the Supreme People’s Assembly, said the command economy was open to learning from countries with advanced financial systems.

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“Finance is not just an issue for one country, but a field involving global cooperation,” Hwang said. “We will promote communications and cooperation with other countries in the financial sector.”

He also said that the success of China’s reform and opening up initiative would serve as a model for North Korea, especially since China plays a significant role on the global economic stage.

As the only ally and largest trading partner of North Korea, China has long said it would support the country’s economic development to improve living conditions, and economic cooperation has been high on the agenda of the three meetings between Kim and Chinese President Xi Jinping this year.

China’s trade with North Korea totalled US$245.34 million in October, up from US$218.53 million a month earlier. Exports rose to US$227.45 million from US$200.33 million in September, according to customs data.

But China’s trade with North Korea was down 54.7 per cent to US$1.95 billion in the first 10 months of this year, compared to the same period last year, customs data showed, due in part to United Nation’s sanctions intended to put pressure on North Korea to abandon its nuclear weapons programme.

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This was the first time the IFF, a think tank, invited Pyongyang representatives to its annual meeting.

Han Seung-Soo, co-chairman of IFF and former South Korean prime minister, initiated the special section of the conference in which the North Koreans took part.