Chinese and Taiwanese companies have agreed with North Korea that their companies will invest about 6 billion yuan (102 billion yen) in constructing an industrial park on Wihwado, a sandbank in the Yalu River running along the border between China and North Korea, Yomiuri Shimbun learned from multiple sources connected to China-North Korea relations. If realized, the project will become a significant source of foreign currency for North Korea, which suffers from international sanctions against it.
Wihwado is located on the other side of Dangdong City, on China’s Liaoning Province. According to the sources, the parties concerned agreed to construct the industrial park around November last year. A Chinese company introduced a Taiwanese investor to the North Korean government. The Taiwanese company will reportedly put up more than 70% of the total cost. In this project, North Korean workers will make electronic components from raw materials transported from China, and the final products will be exported to Southeast Asian countries. Both China and Taiwan will take advantage of North Korea’s cheap labor.
Prior to constructing factories on Wihwado, about 200 million yuan (3.4 billion yen) will be invested in building two bridges and roads that will connect the sandbank with Sinuiju in North Korea. Construction materials for building the infrastructure have already been transported to the site.
In 2011, North Korea designated both Wihwado and Hwanggumpyong, another sandbank in the river, as a special economic zone to make them bases for processing imported materials so as to attract Chinese capital. Pyongyang effectuated a law to exempt tariffs on raw materials brought into the special zones. Former Vice Chairman Chang Song-taek of North Korea’s National Defense Commission, who used to be a close aide to Workers Party of Korea Chairman Kim Jong-un, played a central role in the project. After Chang was executed at the end of 2013, foreign investment in the project was discontinued.
By putting effort into this project on Wihwado at this time, North Korea apparently intends “to take measures to mitigate the loss in trading revenue on account of international sanctions, according to the sources. Immediately after the UN Security Council adopted a resolution to impose economic sanctions against North Korea at the end of November last year, a senior official of North Korea’s Ministry of External Economic Affairs in charge of acquiring foreign currency visited Dangdong City to confirm that the project will continue.