Rason Special Economic Zone


The Rason Special Economic Zone, earlier called the Rajin-Sonbong Economic Special Zone,1 was established in 1992 by the North Korean government near Rason to promote economic growth through foreign investment2 It is similar to the Special Economic Zones set up by the People's Republic of China and elsewhere to pilot market economics in a designated controlled area It is near the border with China and Russia and is a warm-water port for both countries342

Chinese and Russian companies have invested in the economic zone Mongolia has joined recently, and the use of foreign currency is permitted5 Bloomberg reported that ground was broken in June 2011 on a further development stage of the zone6 In November 2011, work began on building electricity transmission lines that will provide Chinese electricity supplies in the zone7

Contents

  • 1 Administration
  • 2 Geography
  • 3 Economy
    • 31 Foreign investments
  • 4 History of foreign business legislation
  • 5 Transport
  • 6 See also
  • 7 References
  • 8 External links

Administrationedit

The Rason Special Economic Zone is administered by the Committee of External Economic Cooperation CEEC8 Foreign companies must be invited by the CPEEC to participate in the special zone8

The first joint North-South company, called Chilbosanmeri Joint Company, has been formally established in Rason Special Economic Zone9

Sources conflict over the date the zone was founded, either 199110 or 199311 Since its creation, laws governing the zone's status have been amended six times, the most recent revision being approved by the Presidium of the Supreme People's Assembly on 3 December 201111

When Jang Sung-taek was purged in late 2013, the accusations against him included the charge that he had "made no scruple of committing such act of treachery in May last as selling off the land of the Rason economic and trade zone to a foreign country"12

Geographyedit

Administrative map of North Korea

The 746 km2 Rason Special Economic Zone is on the western side of the Tumen River in North Korea It is between 42 08'-42 38'N and 130 07'-130 42'E8 This location is in the easternmost end of the country, bordering Russia and China

According to North Korean Economy Watch, the area is surrounded by a 56-kilometre 35 mi long electrified fence13

Economyedit

In 1996, 51 foreign businesses invested USD $373259 million into the Rason Zone14 The UNIDO estimates the investment will increase to $150 million in the future14

In August 2012, an international trade fair was held, offering foreign investors and journalists a look at the work-in-progress The zone is slated to be a manufacturing, tourism, and transportation hub15 However, some analysts think the special zone is more of a project for North Korea to experiment with the capitalist economy rather than use it as basis of transforming North Korea's economy16

Foreign investmentsedit

  • Pipa Tourist Hotel17
  • Ra-Son Economic Co-operation Company
  • Foreign Economic Co-operation Corporation
  • Korea Joint Venture Group
  • Samgwang Trading Company
  • Korea Machinery Trading Company
  • Korea Daesong B Trading Corporation
  • Opalsam Trading Company
  • Korea Rungra 888 Trading Corporation
  • Korea Ponghwa General Corporation
  • Pyongyang Aluminium Products Factory
  • Korea Osoksan Trading Company
  • Light Industry Products Trading Company
  • Korea Samtaesong General Group
  • Korea Pyongchon Trading Corporation
  • Golden Triangle Bank18
  • Yanbian Tianyu International Trade Company19

History of foreign business legislationedit

From 1993 to 2012, there was one single law titled ‘Law of the Democratic People’s Republic of Korea on the Rason Economic and Trade Zone’, which did not mention specific details of business environment, leaving foreign investors with many questions The first Rason SEZ Law launched in 1993 contained chapters of Fundamentals, Duties and Rights of Operation Committee, Guarantee of Economy Activities, Customs Duties, Currency and Finance, Guarantee and Preferential Treatment and Settlement of Disputes The basic framework was continued until 2011, when it made modifications on Development and Management of the Zone, Establishment of Enterprises, Economic and Trade Activities and Incentives and Preferential Treatment, providing more details of the environment for foreign-invested companies However it still did not cover all basically required details for foreign-invest companies such as regulations of labor, tax, or financial management2

From 2014 on, NK started to acknowledge the necessity of a more complex and comprehensive legal framework North Korea adopted more specific regulations regarding certain legal fields such as Labor Regulations for Foreign-invested Businesses and Regulations of Financial Management of Foreign-invested Businesses Furthermore, bylaws for Taxation and Establishment and Operation of Businesses appeared According to the latest Rason SEZ law published in 2016, there are total 16 regulations included in the collection of laws, with at least 3 additional regulations enacted2

Transportedit

Chinese investors have renovated a road from Rason to China,201 and Russian railway workers have renovated the railway from Rason which is on the Pyongra Line to Russia, from where it continues onto the Trans-Siberian Railway10211

There are three ports in the area: the Rajin Port handling capacity of 3 million tons, the Sonbong Port handling capacity of 2-3 million tons, and the Chongjin Port handling capacity of 8 million tons8

Chinese companies operate two piers at the port,which for coal export and for containers A Russian company operates a third pier22

See alsoedit

  • Economy portal
  • North Korea portal
  • Kaesŏng Industrial Region
  • Special economic zone
  • Economy of North Korea

Referencesedit

  1. ^ a b c Ruediger Frank 16 December 2014 "Rason Special Economic Zone: North Korea as It Could Be" 38 North US-Korea Institute, Johns Hopkins University School of Advanced International Studies Retrieved 29 December 2014 
  2. ^ a b c d Yoon, Yeobin; Kopp, Philipp April 5, 2017 "Overview of Legislation Development in Rason SEZ, DPRK" PDF Hanns Seidel Foundation / North Korean Economic Watch Archived PDF from the original on April 16, 2017 Retrieved April 15, 2017 
  3. ^ Khanna, Parag September 17, 2012 "Typhoon tourism: One week in North Korea" CNN Retrieved 8 April 2013 
  4. ^ http://nkfoodwordpresscom/2014/03/27/energy-generation-in-rason/%7C recent report from BDSec Joint Stock Company for HBOil reveals that one of the newcomers to Rason is Mongolia While China and Russia have rented out the piers in the Rajin portion of Rason, HBOil seems more interested in Seonbong and the energy scene
  5. ^ nkchosuncom
  6. ^ "NKorea opens int'l trade fair at economic zone" Bloomberg Businessweek August 22, 2011 Retrieved August 24, 2011 
  7. ^ Andray Abrahamian 24 February 2012 A Convergence of Interests: Prospects for Rason Special Economic Zone PDF Report Korea Economics Institute Retrieved 5 May 2012 
  8. ^ a b c d "Information on Entry & Investment into Rajin-Sonbong District" North Korean government Retrieved 5 November 2012 
  9. ^ Kim, Seong-Jin 2010-01-19 北, 라선특별시에 첫 남북합작 기업 승인 Yonhap News Agency in Korean Retrieved 2010-01-27 
  10. ^ a b John Kim and Andray Abrahamian 22 December 2011 "Why World Should Watch Rason" The Diplomat Retrieved 5 May 2012 
  11. ^ a b Bradley O Babson 2 May 2012 "Will North Korea’s Plans for Foreign Investment Make It a More Prosperous Nation" 38 North, School of Advanced International Studies Johns Hopkins University Retrieved 5 May 2012 
  12. ^ Alastair Gale 12 December 2013, What North Korea Said About Jang Song Thaek The Wall Street Journal
  13. ^ nkeconwatchcom-2008-07-25
  14. ^ a b "Introduction:Pipa Tourist Hotel" North Korean Government Retrieved 5 November 2012 
  15. ^ "NKorea's economic zone remains under construction" Associated Press South Carolina The State August 22, 2012 Retrieved August 23, 2012 
  16. ^ By Scott Snyder, April 25, 2010, Rajin-Sonbong: A Strategic Choice for China in Its Relations with Pyongyang
  17. ^ "Local Companies" North Korean Government Retrieved 5 November 2012 
  18. ^ "Introduction: Tokyo-Rason Tour" North Korean Government 17 December 1979 Retrieved 5 November 2012 
  19. ^ WONG, EDWARD; Jonathan Ansfield; Jonathan Ansfield October 12, 2011 "Tending a Small Patch of Capitalism in North Korea" The New York times Retrieved 8 December 2012 
  20. ^ http://wwwnkeconwatchcom/2010/04/13/bridge-on-china-north-korea-border-being-renovated/
  21. ^ http://wwwnkeconwatchcom/2008/08/12/russia-inks-deal-connecting-rajin-to-trans-siberian-railroad/
  22. ^ Andray Abrahamian September 2011 "Report on Rason Special Economic Zone, Democratic People’s Republic of Korea" PDF Chosun Exchange CE2011001 Retrieved 5 May 2012 

External linksedit

  • Rason Economic and Trade Zone at Naenara
  • Report on Rason Special Economic Zone, Democratic People’s Republic of Korea, Andray Abrahamian, September 2011, Chosun Exchange
  • Rajin-Sonbong Economic & Trade Zone: Investment & Business Guide, United Nations Industrial Development Organization, 1998
  • Information on Entry & Investment into Rajin-Sonbong District, 1997
  • Rason International Economic Zone

Coordinates: 42°22′00″N 130°25′00″E / 4236667°N 13041667°E / 4236667; 13041667



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