Bloomberg News

China Backs North Korean Economic Zone Amid Nuclear Threat

April 02, 2013

North Korean Leader Kim Jong Un

This picture, taken by North Korea's official Korean Central News Agency on March 7, 2013, shows North Korean leader Kim Jong Un (C) using a pair of binoculars to look south as he inspects Jangjae Islet Defence Detachment near South Korea's Taeyonphyong Island in South Hwanghae province, North Korea. Source: KCNA via KNS/AFP via Getty Images

China expressed support for a shared economic zone on the North Korean border, signaling the ruling Communist Party wants to maintain ties even as Kim Jong Un’s regime steps up threats to attack South Korea and the U.S.

Vice Commerce Minister Chen Jian said at a briefing in Beijing today that work at the zone in Rason is “proceeding smoothly” and he’s “optimistic” about its future. “I haven’t heard anything that it has slowed down,” he told reporters.

Chen’s comments may indicate China’s continued economic backing for North Korea even as leaders support tighter United Nations sanctions after Kim’s regime detonated a nuclear device in February. Editorials in Chinese state-run media criticizing Pyongyang had fueled speculation that new leaders under President Xi Jinping may be scaling back support.

“I believe China won’t abandon North Korea,” Fang Xiuyu, an associate professor at Shanghai-based Fudan University’s Center for Korean Studies, said in a telephone interview. “Some people say that it should, which symbolizes that Chinese scholars are more free than before. It doesn’t symbolize China’s government voice.”

The speculation about a change in China’s position grew after Deng Yuwen, deputy editor of the Study Times, the journal of the Central Party School, wrote an opinion piece published Feb. 27 in the Financial Times saying China should abandon North Korea.

Deng was suspended from his job over the article, the South Korean newspaper JoongAng Ilbo reported yesterday.

Economic Support

North Korea’s economy is about one-fortieth the size of that of its southern neighbor and is reliant on China for diplomatic and economic support. Xi may make new decisions about North Korea soon, according to Gong Keyu, a researcher at the Shanghai Institute of International Studies.

“For China there is a common understanding that policy toward North Korea needs to be adjusted,” Gong said. “Deng Yuwen’s point of view was abandoning North Korea. I think for China this is a little extreme. It would be not a large change but a completely thorough change.”

Kim, North Korea’s leader, said March 31 that nuclear- weapons development was one of the nation’s top priorities. The country has increased tensions by declaring a state of war with South Korea and reiterating threats to attack the U.S.

North Korea restarted work at its Yongbyon nuclear site six years after nuclear activities there were shuttered as part of a disarmament accord. A uranium enrichment plan and 5-megawatt reactor will resume operation, the official Korean Central News Agency said in a statement on its website today.

Nuclear Tests

If North Korea continues to conduct nuclear tests, China may be forced to adjust its policy, Zhu Feng, a professor of international relations at Peking University, wrote in the Global Times on Feb. 2.

China expresses its regret over the restart at Yongbyon, Foreign Ministry spokesman Hong Lei said at a briefing today. Hong said all parties must return to the “track of dialogue and consultation.”

China and North Korea said in 2011 they would develop economic zones in Rason and on the islands of Hwanggumphyong and Wihwa. Wen Jiabao, then China’s premier, said last August that the two countries would offer favorable land and tax policies to encourage companies to invest along their joint economic zones.

A Chinese official last year promoted the Rason area as “North Korea’s Shenzhen,” referring to the southern city that led China’s rise to becoming the world’s biggest exporter.

“It’s a project for people’s livelihoods under the cooperation of China and North Korea,” Chen said of Rason. “It will benefit the economic development of North Korea. It’s a normal project. I am optimistic for its development.”

The briefing was held with Chen Weigen, a vice governor of China’s northeastern Jilin province, which shares a border with North Korea.

To contact Bloomberg News staff for this story: Xin Zhou in Beijing at xzhou68@bloomberg.net; Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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