Sinuiju Designated As Hong Kong-Type Special Zone: First Market Economy Experience in DPRK

Sinuiju Designated As H.K.-Type Special Zone: First Market Economy Experience in DPRK

Yang Bin (left) and Kim Yong Sul, Chairman of the DPRK Committee for the Promotion of External Economic Cooperation, shake hands with each other after signing the agreement on the Sinuiju Special Administrative Region on September 23.

By staff reporter

As a drastic economic reform measure with a 50-year-long perspective in the new century, the government of the Democratic People’s Republic of Korea has recently introduced a Hong Kong-type special zone in Sinuiju City, located at the estuary of the Amrok (Yalu) River bordering on China across Dandong. The legislative Supreme People’s Assembly Presidium on September 12 issued a decree on setting up a special administrative region in the northwestern port city, which encompasses 132 square kilometers (50 square miles) to be put under the central authority of the government.

Chinese-Hollander Yang Bin, a China-born and China-based entrepreneur, was appointed to be the first governor by the SPA Presidium on September 24. A basic agreement on the development and management of the Sinuiju Special Administrative Region was signed on the previous day between the DPRK Committee for Promotion of External Economic Cooperation and the Holland Euro-Asia International Import and Export Trade Company. It was inked by the committee chairman, Kim Yong Sul, and Yang Bin.

According to the Basic Law on the Sinuiju Special Administrative Region adopted on September 12, the first-ever experimental special zone to link the North Korean economy to the world markets shall be endued with the legislative, executive and judicial power and an independent legal system of the region shall be kept for 50 years, until December 31, 2052.

The law stipulates that the special zone shall have an independent legislative council, regional and district administrations, courts ranging from the supreme court to local ones, the police, prosecution offices of the region and districts, and that it shall use its own emblem and flag plus those of the state. The governor shall represent the special administrative region.

Under the law, no state and government organs shall interfere in the region’s affairs, and the region’s external activities can be developed within the limit of the approval of the state. The special administration shall issue its own passports for its residents.

The land and natural resources in the region belonging to the DPRK can be used to build a hub for international finance, trade, commerce, industry, state-of-the-art science, entertainment and tourism. But marine and airline transport projects will need permission by the central government.

The law says that the state shall provide an investment environment and conditions for economic activities favorable for businesses, and encourage the autonomous organ to pursue a variety of cultural policies deemed necessary for the development of the region and for the cultural and emotional life of the residents.

It also stipulates that the central government shall protect private assets within the zone and guarantee the right to inherit property. The Sinuiju government not only can exercise its own currency and financial policies but also is entitled to implement its own preferential customs system to determine the customs rate and earmark a budget at its own discretion in accordance with approval by the central government.

In the special zone, Chinese yuan, U.S. dollars and Korean won will be used as currency, and Korean, Chinese and English as official languages.

Sinuiju has been long cited as a potential candidate for a special economic and trade zone in addition to Rajin-Sonbong, located northeast of the country bordering on Russia’s Far East and China. In other cases, Nampo, a western coast city, already has a light industrial complex in cooperation with South Korean businesses, which is to be followed by a much larger-scale project to build an industrial complex in Kaesong, four kilometers from the truce village Panmunjom.

The DPRK government has enforced a new economic policy effective from July 1 on wage and pricing systems based on self-accounting management as a whole.

It seems that the North Korean economy will gain greater momentum, once the west coastal corridor of railway and road is reconnected between the North and the South across the Military Demarcation Line, together with the proposed huge projects in the three major cities in the western region. In the eastern region, too, railways and roads are soon to be relinked to reach out to Europe through Trans-Siberian Railways.

As he was awarded in Pyongyang a writ of the SPA Presidium on his appointment as governor of the Sinuiju special administrative region, Yang Bin vowed to do his utmost to “build the region into a modern city of a world standard in a short span of time to meet the requirements for building a powerful nation,” the Korean Central News Agency quoted him as saying.

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