Attack shows North Korea’s unease over China Dependency-analysts

SEOUL, Sept 5: North Korea launched a blistering and extremely rare, attack on a Chinese company that had accused it of corruption and fraud in a major investment in the reclusive state, saying it was the Xiyang Group that had reneged on the deal.
The statement, carried today by the North Korean state news agency KCNA, comes at a sensitive time for the North which is looking to ally China to help it repair its broken economy, with new leader Kim Jong-un seeking a state visit to Beijing to make his case for more investment.
Xiyang Group took to the Internet to describe its investment in an iron-ore powder venture as “a nightmare” and said that the North had violated its own investment laws.
“It (Xiyang) has carried out only 50 per cent of its investment obligations though almost four years have past since the contract took effect,” KCNA quoted a spokesman for its Commission for Joint Venture and Investment as saying.
North Korea almost never criticises its neighbour or any Chinese entities in public. The KCNA article said that the Xiyang comments had been whipped up by “hostile forces” in an orchestrated media campaign to blacken the isolated state’s name.
A Xiyang official told Reuters earlier that it had signed up for a 75 per cent stake valued at 36 million euros ($45 million dollar)in a 10 million tonne a year iron ore processing plant.
It started producing in April 2011 and stopped two months later, after the official said North Korea had prohibited it from selling 30,000 tonnes of ore and had arbitrarily raised land, power, water and labour costs.
The North then expelled Xiyang’s Chinese workers and later sold the iron ore, the Xiyang official said.
North Korea’s special economic zones are governed by a patchwork of laws and have so far failed to attract large amounts of Chinese investment into a country that has been hit with international sanctions after its nuclear tests in 2006 and 2009.


Please enter your comment!
Please enter your name here