China mulls to set up US$10-billion fund for North Korea

Posted on : 2007-11-14 00:27 KST Modified on : 2007-11-14 00:27 KST
International financial institution to attract investment via fund for road, rail and port projects

BEIJING - China is pushing for the creation of US$10-billion fund for North Korea. China's state-funded bank has decided to create a fund amounting to US$10 billion to support Chinese companies doing business in North Korea. The bank signed a letter of intent with Daepung Group, a multi-national investment firm which was established under the North's leadership, according to Daepung Group on November 13.

Bae Gyeong-hwan, a high-ranking Daepung official said that the two sides had officially signed an agreement to create the fund. He added that Chinese companies advancing into North Korea would receive assistance from the Chinese government in the form of social overhead capital projects in the North, such as roads, railways and ports.

China has thus far supported the North Korean branches of Chinese businesses that export products to North Korea, but this is the first time that the nation will create an investment fund for the communist country. “Daepung Group is going to establish an international financial institution with the participation of various nations in order to ensure transparency and stability, with the ultimate goal of attracting foreign capital after the normalization of North-U.S. relations,” added Bae.

Daepung Group was an international investment firm established by the North's Second Economic Committee and the Committee for the Promotion of External Economic Cooperation in Hong Kong. Daepung Group and Tangshan Iron & Steel, one of China's three biggest steel companies, reportedly signed a letter of intention on October 20 on the establishment of a 1.5-million-ton iron mill at Kim Chaek industrial district in North Korea.

Please direct questions or comments to [englishhani@hani.co.kr]

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