Chinese companies hesitant to invest in N. Korea: report

By Kim Young-gyo
HONG KONG, June 11 (Yonhap) -- Chinese companies are hesitant to invest in North
Korea after the sinking of a South Korean naval ship in March, according to a
Japanese media outlet Friday.
A team of multinational experts concluded last month that the 1,200-ton Cheonan
patrol ship was sunk in a torpedo attack by a North Korean submarine on March 26.
Pyongyang denies any role in the deadly incident that killed 46 sailors and is
threatening war for any punishment against it.
The incident has not only strained the inter-Korean relationship, but has also
impacted the trade and investment between China and North Korea, said the
Mainichi Shimbun.
"North Korea aims to draw foreign capital to an area near the North Korea-China
border, but many Chinese enterprises, which initially intended to invest, have
started to back off," the report said.
North Korea has long been reported as planning to build a free economic zone near
the bordering Amnok (Yalu) River.
A North Korean foreign ministry delegation visited the Chinese border cities of
Shenyang, Dandong and Fuxin in mid-May for talks on building a new bridge over
the river to connect the two countries.
The report added that South Korea's move to levy additional sanctions on North
Korea has had a negative impact on the investment of Chinese enterprises.
Last week, Seoul sent the case to the U.N. Security Council, with the U.S. and
other allies slamming Pyongyang for the attack.
"If products from my food factory in North Korea are not allowed to get exported
to South Korea, it is meaningless," a Chinese businessman was quoted as saying.
Many Chinese businessmen doubted if their financial losses will be properly
compensated if the situation on the Korean Peninsula becomes worse, as the
Chinese government has yet to fully cooperate on the investment in North Korea,
the report said.
ygkim@yna.co.kr
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