North Korea will chart own economic destiny with help of neighboring nations

By Hu Weijia Source:Global Times Published: 2018/6/11 22:08:40

US President Donald Trump may have promised that North Korea will become "very rich" on the back of US economic assistance if the two sides can reach an agreement over denuclearization, said a Reuters report on Monday. It is good to see Washington's desire to participate in North Korea's economic development, but Trump may have to abandon unrealistic ideas that the US can become the main protagonist in North Korea's economic story.

The North Korean economy remains vulnerable following years of sanctions, so aid and investments are needed to rebuild its economy. The US and Europe are likely to be important sources of investment for North Korea if the UN Security Council loosens economic sanctions, but it is North Korea's neighbors in Asia - such as China and South Korea - that will be main external drivers of North Korea's economic rise.

China and South Korea have a relatively high economic complementarity with North Korea compared with other countries. Pyongyang has worked with Beijing and Seoul to develop special economic zones, which are likely to be the catalysts of the industrial transfer from China and South Korea to North Korea. North Korea's demographic dividend will help the country undertake industrial transfers and integrate itself into the Asian industrial chain.

East China's Shandong Province is home to many South Korean companies, which are paying close attention to North Korea's economic situation in search of potential business opportunities. Economic cooperation among the three nations may pick up as soon as the UN begins to loosen economic sanctions.

China is one of the world's largest consumer economies, a status that will help strengthen its role as North Korea's key export destination. If South Korean companies step up investment in North Korea, China will be an important target export market for those enterprises. The Chinese government's efforts to revitalize the economy in the three provinces in Northeast China will also have a broader impact on the North Korean economy, including driving up demand for its exports.

Economic cooperation with China is likely to occupy an important position in the Pyongyang's economic development plan. For instance, the two countries have large potential for cooperation in fields such as infrastructure.

China and South Korea are North Korea's important economic partners. Their roles in North Korea's possible economic transformation cannot be replaced by the US. If Pyongyang adopts a policy to open up its economy, the isolated country will eventually involve itself into global economy by deepening multilateral cooperation. That will be a story to be written by Pyongyang itself rather than Washington.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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