August 5, 2011 / 5:06 AM / 8 years ago

Factbox: North Korea's "special" zones

SEOUL (Reuters) - There are four special zones at the fringes of North Korea, all surrounded by barbed-wire fences, where the isolated state conducts much of its international trade.

Following are some facts about the North’s special zones:


- Just across the South Korean border, west coast.

North and South Korea jointly run a factory park in Kaesong, run by a Hyundai Group affiliate and the South’s Korea Land Corp. Construction began in 2003.

Over 700 South Koreans and 47,000 North Koreans work at the complex. Production increased to nearly $35 million in March, up nearly $6 million from six months ago.

Some 120 South Korean companies make products such as cooking pots, clothes, shoes and watches. The companies receive tax breaks and other incentives from the South to set up there and pay workers a basic monthly salary of about $64.


- Just across the South Korea border, east coast.

The North’s Mt Kumgang resort, run by an affiliate of South Korea’s Hyundai Group, opened in 1998. Seoul suspended tourist visits after a South Korean tourist was shot there by a North Korean soldier in 2008.

North had received fees from each tourist who crossed the border and a cut of money they spent at the Mount Kumgang resort. At its peak, the Mount Kumgang tour programs attracted 300,000 tourists a year.


- On the China border, west coast

Sinuiju has been the site of several North Korean attempts to create a special zone aimed at attracting foreign investment. The Sinuiju Special Administrative Region (SAR) project lost momentum in September 2002 when its first governor-to-be, Chinese-born Dutch businessman Yang Bin, was arrested in China.

North Korea and China broke ground in June on a joint development project on the nearby North Korean islet of Hwanggumpyong. The island will be developed into a tourism, logistics, and manufacturing center. It is near the Chinese city of Dandong, the main conduit for trade into the North.

The North says firm will be given tax breaks and financial transactions can be carried out in the yuan currency.

The two sides plan a 6 km-long (3.7 miles) bridge across the Yalu River which will link Dandong with southern Sinuiju.


- Near the Chinese and Russia borders, east coast.

Rason became a special economic zone under the U.N. Development Program’s Tumen River project in 1991 but never fulfilled its proposed role as a transportation hub, amid tough United Nations sanctions imposed for the North’s pursuit of ballistic missiles and atomic weapons.

By developing the zone, China gains access to the East Sea from its northeastern region and a maritime transport route to the south. Beijing is apparently interested in using the port to ship resources, grain and timber more swiftly and cheaply from north to south.

Reporting by Jeremy Laurence; Editing by Yoko Nishikawa

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