N. Korea Permits Foreign Capital Investment for Developing Nampo Port

The Port of Nampo, located in western North Korea, had been under a widespread rumor that the reclusive state may open the port to foreign capital. Finally, the port is forecast to be developed with capital from China. North Korea is reported to authorize the port's development and erecting bonded processing facilities at the Nampo port. It is reportedly the first influx of foreign capital to the port.

North Korea intends to construct an export-processing and free-trade special zone in Nampo following the Gaesong Industrial Complex and Special Economic Zones (SEZ) in the northeast regions of Najin and Sonbong. Roughly 1 million-㎡, one-third of 3.3 million-㎡ of the Gaesong complex, is to be covered by the development project. The actual gross developed area, however, will expand to about 4 million-㎡ upon water surface reclamation.

North Korea has signaled its willingness to opt for an open economy since last year that it delegated exclusive rights to China and Russia to repair and operate the second and third pier at the port of Najin and agreed to build a new bridge at a border with China in the Amnok River, or the Yalu River in Chinese, connecting Sinuiju and Dandung, during the Chinese Premier, Wen Jiabao's visit to North Korea.

North Korean authority on March 22 last year has approved a development project of the port of Nampo jointly operated by North Korean and Chinese corporations, according to the Yonhap News Agency October 19.

The authorization permit issued by North Korea's trade authority is stating foundation of a China-North Korea joint venture in Nampo city with the North and China respectively financing 55 percent and 45 percent of initial investment amounting 8.8 million euro ($13 million).

According to the document, the North is known to supply resources such as land while Chinese corporation finances the actual development expenses, 3.8 million euro. The contract, valid for 50 years until 2058, entails cooperation in the shipping industry, brokerage, bonded processing, repair, maintenance and re-exports of rotary press materials.

[written by Jong-hwoi Jang, Beijing Correspondent, translated by Ye-sol Yi, edited by Jae-yoon Jung]

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]