Monday, February 14, 2011

The Rising Sun Over Re-Raised Rasun

At the risk of you starting to think Destination Pyongyang is turning into an economics blog (a niche you might have noticed is being filled quite well by him and them, to name but two), here is my latest contribution to your distant understanding of what is afoot in Rasun, where the Chinese do indeed seem to be making something happen, though I think it a bit early to say quite what that is...

From here, by Kang Cheol Hwan;

No sooner has 2011 arrived than the Chinese are flocking into Rasun. North Korea constructed the Rasun-Sonbong Special Economic Zone in 1991 to attract foreign investment, but constant National Security Agency controls and official regulations left a handful of small traders and the zone was, to all intents and purposes, suspended. The revival of Rasun which suddenly began at the start of this year is down to the appearance of some big changes that could not be seen a few years ago.

According to a diplomatic source, the Chinese government is pressuring North Korea, which has been going down a blind alley since the currency redenomination, and sees in Rasun a golden opportunity to make a model of Chinese-style reform and opening. Chinese investment is flowing rapidly into Rasun for the purpose of using Rasun Port, which the Chinese see as indispensable for the development of 'Chang-Ji-Tu' (the Changchun-Jilin-Tumen triangle).

China is even looking as far as supplying electricity to Rasun. According to one defector, “Right now in Rasun, they are busy replacing the transformers for the purpose of taking Chinese electricity, which will be supplied starting in April.” It seems that China is moving forward with Chang-Ji-Tu development on an unprecedented basis because it has confidence in changes in North Korea.”

The Chinese government has already established an economic mission, which looks a lot like an embassy, in Rasun and is cooperating with North Korea to eliminate sources of friction between Chinese citizens and the North Korean authorities.

Specifically, to solve three major problems (passage, communications and customs) China is putting heavy pressure on the North Korean authorities, and the North Korean authorities are said to have acceded to all the Chinese demands.

According to a Chinese citizen who recently visited Rasun, “It didn't even take five minutes to pass through customs.” Previously, it took more than three hours, and failure to give bribes could lead to being caught up for as long as the North Koreans pleased for any number of reasons.

Chinese cellphones cannot be used yet, but connection with the outside is possible via landline, and it seems that connection with China via cellphone will soon be possible.

Hitherto, even Chinese people couldn't watch foreign films and speak or act freely, but starting this year the actions of Chinese people in Rasun have become practically free. Recently, a drunk member of a task force associated with the National Security Agency is said to have come to Chinese lodgings and demanded bribes, so the North Korean security forces and Chinese mission representatives received their protests, called in the man and punished him. The number of National Security Agency agents in Rasun has been drastically cut, and measures are being put in place to stop them intervening in the business activities of the Chinese.

In the past, Rasun was swarming with so many National Security Agency personnel that it was said to be half traders and half National Security Agency agents, and being hauled in and interrogated for ludicrous reasons was a common occurence. This atmosphere has totally changed.

Recently North Korea has taken another step forward by starting to sell land in Rasun to the Chinese. In the middle of Rasun City it has started to be sold for $50 per 'pyeong', while in surrounding areas it is $30 per 'pyeong'; the Chinese, who still lack trust in the North Korean regime, have not taken to it yet, but the act of selling land to individuals itself is an epochal change.

North Korea set in place the plan to build a large scale industrial area in the form of the Kaesong Industrial Complex and is now consulting with the Chinese side, but China is pushing for a guarantee of complete freedom for Chinese companies, unlike the situation in Kaesong, where personnel management is not free.

One high level defector who recently arrived in South Korea said of this, "North Korea is looking to use Rasun to break through its isolation, which accelerated following the nuclear tests and currency redenomination." It means North Korea, with its extreme financial difficulties, was unable to refuse China's demands for change, and now the enforced changes have actually started. The defector added that hitherto North Korea would not change its system and relied on foreign currency earners, but said that the role the Chinese government will play in as yet unseen North Korean change beyond Rasun remains to be seen.

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