China Invests in North Korea Ports

by Ship & Bunker News Team
Friday September 28, 2012

A port leasing agreement and a $476 million investment deal are bringing Chinese money into North Korea, according to media reports.

Earlier this month, the Chinese state-owned Yanbian Haihua Group formed a $7.83 million joint venture company with Pyongyang for the operation of two wharves at Chongjin port in North Korea for 30 years, Chinese daily Global Times reports.

The deal, the second port leasing agreement between the two countries following one signed in 2010, give the Haihua Group a 60.46 percent of the joint venture, while North Korea owns the minority stake.

The agreement gives China, which mostly uses railways to transport raw materials from its northeastern provinces, access to the Sea of Japan through wharves capable of processing 7 million tons of cargo a year, according to the South Korean Chosun Ilbo newspaper.

"At present, the three northeastern Chinese provinces have about 13 million tons of cargo that need to be transported," Cho Bong-hyun of the IBK Economic Research Institute told Chosun Ilbo.

"As the cargo volume grows, China will get more active in efforts to gain ownership of North Korean ports."

Also this month, Chinese Overseas Investment Federation signed an agreement with North Korea to launch a $477 million fund for investment focused on the North Korean mineral industry, with some of the money going toward port operations, according to the English-language website of the Chinese news organization Sina.

Ship & Bunker News Team
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