China and North Korea aim to clear legal hurdles to revive border regions with joint economic plans
- Rapprochement on the Korean peninsula an opportunity to boost languishing Chinese region
- Lawyers from the two countries review the legal issues to be addressed before projects can come back to life
China and North Korea are officially examining each others’ legal systems regarding trade and foreign investments – a sign of further accelerating economic cooperation at the border regions.
Lawyers from the two countries have attended seminars designed to improve their understanding of economic, trade and investment laws.
Last week, senior representatives of Beijing law firm Deheng Group were in Pyongyang for a seminar with North Korea’s Foreign Economic Law Consultation – a legal service agency run by the foreign trade ministry. The week before, a similar seminar took place in Beijing’s Jinglun Hotel between Deheng Group and North Korea’s Koryo law firm, “to enhance the legal systems of the two countries”.
A legal professional close to Deheng Group said China and North Korea were preparing to revive stalled cooperative border projects to boost the region’s economies.
“Legal issues must be closely reviewed and examined before any major projects can proceed … It is a sign that China-North Korean economic cooperation will be further strengthened,” the source said.
Executive vice-chairman Hu Ming and partner Li Guangxing, of Deheng Group attended the Pyongyang seminar where lawyers from both sides reviewed their domestic laws on special economic zones, international trade, and international arbitration for foreign investments.
Entrepreneurs from China and officials from the North Korean chamber of commerce also took part, according to a statement from the law firm, which added the two sides signed a “cooperation framework agreement”. It did not elaborate.
In August, China’s northeastern border province of Liaoning proposed the establishment of a special economic zone in Dandong, once the hub for about 70 per cent of cross-border trade with North Korea.
At the same time, the rust-belt province also began a push for a new road between Dandong and Pyongyang through Sinuiju, North Korea’s gateway city.
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Other projects might also now be reanimated, including the special economic zones established by China on Hwanggumpyong and Wihwa islands in the Yalu River.
Plans to develop them were originally announced in 2011, but the project was virtually halted when Kim Jong-un’s uncle, Jang Song-thaek – who led the North Korean side of the programme – was executed for treason in 2013.
Observers said China might be seeking to make the most of the recent mood for rapprochement on the Korean peninsula by reviving these economic projects to boost the fortunes of one of its poorest regions.
Northeast China – the three provinces of Liaoning, Jilin, and Heilongjiang – was once one of the most well-off regions in the country, rich in oil and coal and with a thriving heavy industrial economic base.
Last year, the three provinces together accounted for a mere 6.7 per cent of total GDP, according to the International Monetary Fund, despite Beijing’s efforts over the past decade to boost their economies.
“To boost the regional economy, China must enhance its economic cooperation with North Korea,” Gu Gab-woo, a professor at the University of North Korean Studies in Seoul, said, noting the move would attract extensive foreign investment throughout the border regions.
“Reviving border economic projects, such as development in the bilateral special economic zones, would provide a solution to the Chinese northeast region,” Gu said.
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The Changjitu Project in Jilin province was Beijing’s first borderland development plan, started in 2010. Its goal was to connect Changchun City, Jilin City and the Tumen River, setting up the region as a “development and opening-up pilot zone” in an attempt to transform the area into an international logistics hub for neighbouring countries North Korea, Japan and Russia.
A high-speed 359km (223-mile) rail link connecting the major cities of Jilin started operating in 2015, with prospects of extending the line to the Korean peninsula via the North Korean city of Rajin. But, once again, the plan was not realised, as Beijing backed United Nations sanctions on North Korea which were implemented last year.
As a result, the 1,400km border – with at least 16 security checkpoints throughout Liaoning and Jilin provinces, which have long served as de facto free-trade zones – lost their economic vigour. The number of businesspeople from South Korea and Japan also fell.
Some border town residents in China are hoping for the revival of economic cooperation with North Korea. In Yanji, seat of the Korean autonomous prefecture in Jilin, resident Liu Wei said: “Revival of the bilateral economic projects in the border areas and, ultimately, economic reform in North Korea would enhance the economy of the Chinese northeastern region.”