Chinese miners crucial to opening of North Korea’s economy
Over 40% of the 138 Chinese firms doing business in North Korea in 2010 were involved in the country’s mining sector, according to the US Korea Institute at John Hopkins University SAIS in Washington, DC.
North Korea has roughly $6 trillion worth of rare elements and mineral deposits including magnetite, zinc, coal, copper and limestone, and the Chinese have dominated early development of the sector, reports Kristine Kwok for the South China Morning Post.
Chasing relatively cheap labour and operating costs, Chinese miners and other businesses are increasing their activity in North Korea, causing the economy of the Hermit Kingdom to show signs of life. Some economists predict that the country has begun to run small surpluses (though this is difficult to confirm given the lack of reliable statistics).
But serious risks remain. “A cryptic business environment, unstable politics and faulty infrastructure” continue to deter foreign mining investment from places further afield than China.
The the hope of many is that Chinese business relations with Kim Jong-Un will alleviate some of the current risks, creating a virtuous cycle of foreign investment and economic growth, potentially changing North Korea’s engagement with the outside world for the better.