Moves to enhance economic integration between Sino-Korean border

By Yo Tong on December 29, 2010
The Yalu River (Image: Prince Roy, CC)

North Korea and China are seeking to deepen cross-border economic cooperation, various reports evinced.

Chinese media reported that North Korea brought forth the proposal to lease two islands near its border with China to build the “Hong Kong of North Korea.” A separate report shows that the regional government of northeastern China is studying strategies to take in laborers from North Korea.

According to Yazhou Zhoukan, a Chinese language weekly magazine specialized in international news, North Korean leader Kim Jong Il visited China twice this year to make the leasing proposal to Chinese authorities in bid to gain Chinese government support of Kim Jong Un, the designated successor of the North Korean communist regime.

According to the plan, North Korea offered to lease out Wihwa Island (Chinese: Weihua) and Hwanggeumpyeong (Chinese: Huangjinping) as Free Trade Zones in order to reduce trade barriers and bureaucratic requirements between the two countries. Chinese nationals and foreigners would be able to enjoy visa-free status when traveling to the two islands. The duration of the lease would be 50 years and could be extended to as long as 100 years.

Both islands are located in the Yalu River near the border with China. They are inhabited and administered by the North Korean city of Sinuiju.

Beijing authorities have not yet spoken openly about this proposal, but they have assigned the China International Engineering Consulting Corporation (CIECE) to launch preliminary research on the proposition. Chinese reservation about Kim Jong Il’s plan is due to the unpredictability of North Korean diplomacy, said Yazhou Zhoukan.

Moreover, Beijing authorities are unsure about the impact of such an agreement on the overall economic development of northeastern China. Beijing authorities have already included the construction of the new Yalu River Highway Bridge and “Changchun-Jilin-Tumen Development and Opening Pilot Zone” in the “Twelfth Five Year Plan” last October.

In a separate report, the Japanese daily Asahi Shimbun quoted an unnamed source from the provincial government of Jilin, stating that the northeastern province had decided to accept around 100 laborers from North Korea to work in Tumen, while similar moves are observed in Dandong and other cities in Liaoning Province.

Asahi Shimbun quoted an unnamed Tumen municipal official and reported that the first group of North Korean laborers is commissioned to work in the plastic processing plant in the North Korean Industrial Park. In order to prevent their escape, a plan has been devised to deploy buses that will transport the workers from the plant in China to their dormitory on North Korean soil.

However, there is concern among provincial officials that such a move might infringe on the “Rules for the Administration of Employment of Foreigners in China.” Article 6 states, “the post to be filled by the foreigner recruited by the employer shall be the post of special need, a post that cannot be filled by any domestic candidates for the time being but violates no government regulations.” It is thought that the provincial government is studying measures similar to Japan’s “Technical Intern Training Program” as a workaround for this issue, Asahi Shimbun reported.

It is not yet clear whether the plan to utilize North Korean labor is part of the aforementioned Chinese development project of the Tumen River in the “Twelfth Five Year Plan”.

Yazhou Zhoukan reported that the idea of leasing the two islands arose as early as 2009. On January 23rd 2009, when Kim Jong-il received Wang Jiarui, Director of the International Department of the Central Committee of the Communist Party of China, in Pyongyang, Kim spoke of the development of Sinuiju special economic zone and of his idea to lease Wihwa and Hwanggeumpyeong to develop these areas as free trade zones. At the time, Wang did not respond to the proposal.

When Chinese Premier Wen Jiabao visited North Korea in October 2009, Kim Jong Il signaled his intention of leasing the two islands once again. Although China has reached agreement with North Korea over the construction of the new Yalu River Highway Bridge, Chinese authorities have not yet given a clear response to the offer concerning those two islands.

In August, when Kim Jong Il visited China for the second time this year, he agreed to the Chinese proposal of establishing the two ports of Rajin and Chongjin as Special Economic Zones – outlets that will stimulate the development of the area along the Tumen River. During this encounter, he also signaled his willingness to lease Wihwa and Hwanggeumpyeong.