South Korea’s state trade agency asked Chinese firms Friday to invest in an inter-Korean industrial complex in North Korea as Seoul and Beijing reached a bilateral free trade agreement last November.
The industrial complex in North Korea’s border city of Kaesong opened in 2004 as a landmark symbol of rapprochement between South and North Korea. About 120 South Korean firms employ some 53,000 North Korean workers there.
Goods produced at the Kaesong complex are covered by the bilateral free trade agreement, which was “effectively” reached by South Korea and China during the Asia-Pacific Economic Cooperation meeting in Beijing.
“The Korea-China FTA will have a good effect on goods produced at the Kaesong Industrial Complex and provide a cost competitiveness in the Chinese market,” the Korea Trade and Investment Promotion Agency said in an investor relations session held at a hotel in Beijing.
South Korea wants Chinese firms to make inroads into the Kaesong Industrial Complex by forming joint ventures with South Korean firms, KOTRA said.
South Korea and China also “have been in negotiations on specific contents to give tariff favors on goods produced at the Kaesong Industrial Complex,” KOTRA said in a statement.
“The investment cooperation between South Korea and China will help promote peace and stability on the Korean Peninsula,” South Korean Trade Minister Yoon Sang-jick said in a written congratulatory message at the investor relations session.
Yoon did not attend the session, which was hosted by Kwon Pyung-oh, deputy minister in charge of trade and investment at South Korea’s Ministry of Trade, Industry and Energy.
South Korean companies are estimated to pay North Korean workers a combined $87 million in wages and social insurance per year.
Experts, however, said that inter-Korean relations still exert great influence over the operations of the joint industrial park, making it an incomplete economic cooperation project between the Koreas.
The two Koreas remain technically in a state of war as the 1950-53 Korean War ended in a ceasefire, not a peace treaty. (Yonhap)
