New DPRK economic zones to benefit investors

Six new economic zones designated by the Democratic People's Republic of Korea mean opportunities for Chinese investors, but it is unclear whether entrepreneurs will be deterred by policies and poor infrastructure, experts said on Thursday.

The new zones will "have great attraction to Chinese enterprise and bring good opportunities, in particular, for businesses with border trade and processing production", said Li Tianguo, a researcher from the National Institute of International Strategy at the Chinese Academy of Social Sciences.

The DPRK decided on Wednesday to set up six more economic development zones, the Korean Central News Agency said in an English-language release.

Pyongyang, the capital, will host the Unjong cutting-edge technological development zone, while export, industrial, agricultural, tourism and green model zones will be set up in other areas, the agency said.

The move follows the announcement in November that the country will designate 13 special economic zones in areas including the Amnok River.

Jin Qiangyi, a Korean studies professor at Yanbian University in Jilin province, said that the new zones are "obviously an attempt to boost the economy".

"The country needs to build a lot of infrastructure if it plans to further open up and attract foreign investment," Jin said.

He added that the DPRK's decision to set up more economic development zones partly aims to ease regional tension and international pressure placed on the country.

"Many Chinese companies still feel daunted by doing business in the country because there is no clear policy to guarantee investors' interests," Jin said.

Li said that Chinese businesses face risks of policy changes in the energy and mineral industries while investment in "catering and aquatic product processing may be much easier".

China and the DPRK are discussing two special economic zones — one in the DPRK port of Rason near China's Jilin province, and the other on Hwanggumpyong and Wihwa islands near the Chinese city of Dandong, Liaoning province — that are the subject of an agreement struck in 2010.

"There has been no big progress in the two zones between the countries," Li said.