A Chinese state company plans to inject US$2bn into a project to build up a North Korean free trade zone into a regional export base, according to South Korean daily Joong Ang Ilbo. The capital will be provided by China’s Shangdi Guanqun Investment, which signed a memorandum of understanding with Pongyang’s Investment and Development Group on December 20.
Pyongyang has issued a decree this month to develop Rason, formerly Rajin-Sonbong. Although it became a special economic zone in 1991, it has not fulfilled its proposed role as a transport hub. The new project calls for the construction of coal-fired power plants, roads, piers and an oil refinery in Rason.
North Korea has strived to revitalise Rason through ties with China and Russia. China, its sole major ally, has actively explored investment opportunities in North Korea and secured the rights to much-needed natural resources such as iron ore and coal.