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(News Focus) N. Korea, China forecast to boost economic ties
By Kim Young-gyo
HONG KONG, May 26 (Yonhap) -- The leaders of North Korea and China appear to have agreed to speed up bilateral economic cooperation in their latest summit, a move likely to deepen the destitute North's reliance on the world's No. 2 economy, experts said Thursday.

   North Korean leader Kim Jong-il had a summit meeting with Chinese President Hu Jintao in Beijing on Wednesday after touring various industrial facilities in eastern China over the past six days.

   On Sunday, Chinese Premier Wen Jiabao told South Korean President Lee Myung-bak in Tokyo that Beijing had invited the North Korean leader in an effort to help Pyongyang learn about Chinese economic development and use that knowledge for reviving the North's near-moribund economy.

   Brian Bridges, a professor and head of the political science department at Hong Kong's Lingnan University, said the two countries may have put much emphasis on economic cooperation during the summit talks.

   "This, of course, will not be the only topic, because certainly the Chinese leaders are talking to Kim about nuclear issues -- and the role of (his son) Kim Jong-un in North Korean policy-making -- as well, but it is likely that economic issues have indeed been prominent in these discussions," the scholar said.

   Shin Sang-jin, a specialist in Chinese international policy at Kwangwoon University, offered a similar view. "Desperateness coming from isolation from the global community is forcing cash-strapped North Korea to seek deeper ties with China," he said.

   North Korea's dependence on its strongest ally and largest benefactor has been growing as its economy slips further into isolation from the international community because of its nuclear ambitions.

   According to a report compiled by the Korea International Trade Association (KITA), trade between the North and China in 2010 jumped 32 percent on-year to slightly over US$3.46 billion.

   The two countries have recently moved toward carrying out joint development projects along the border.

   North Korea and China will jointly develop the North Korean islet of Hwanggumpyong, which sits on the river of Amnok, called the Yalu in Chinese. The islet will turn into a center for tourism, logistics and manufacturing.

   The two sides also plan to build a bridge across the Amnok River, which connects the Chinese city of Hunchun with Rajin, a neighboring port city in North Korea, to facilitate development efforts.

   A ceremony to launch the project is expected to be held on Saturday with government officials from both countries present.

   While the Chinese Foreign Ministry did not confirm the China-North Korea project, it said earlier this month that "economic and trade cooperation between Chinese and North Korean companies benefits the social and economic development of both countries and helps promote regional peace and development."

   Some analysts expected that economic cooperation between the North and China will gain further momentum as North Korea is willing to improve its environment for Chinese investors.

   Cho Bong-hyun, a research fellow at the Seoul-based IBK Economic Research Institute, said some labor-intensive firms in China are keen to move their factories to the Hwanggumpyong island.

   "Labor costs can be halved when Chinese companies employ North Korean workers instead of Chinese workers, while product quality can be much better," he said.

   Dong Yong-seung, a senior researcher of Samsung Economic Research Institute, said China eagerly eyes North Korea's Rajin port, aiming to use the port to develop its own Changchun-Jilin-Tumen triangle in the northern region, which lacks transport infrastructure.

   However, the path to the actual execution of building up economic partnership remains fraught with difficulties.

   Bridges, of Lingnan University, said the objectives of both sides are slightly different.

   "China has become steadily involved more and more in the North Korean economy over the past few years," he said. "In that sense, the discussions will only add to the momentum for closer economic links, but there will remain differences in perceptions between the two sides over what each side wants to get out of this economic relationship."

   China is more concerned about pushing Kim to consider not just limited experiments on the borders, but more fundamental economic reform along the lines of the Chinese reform model, the scholar said.

   "After the problems caused by the 2009 currency 'reform,' the North Korean economy is in need of new ideas, but it is unlikely that Kim is yet ready to embrace the Chinese model to any significant extent," he said, referring to Pyongyang's botched currency reform two years ago that caused massive inflation, worsened food shortages and increased public anger.