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Mar. 9 – China has gained a directly controlled foothold in the Sea of Japan for the first time in over a century as North Korea has agreed to lease its Rajin Port for the next ten years.
The port, which is on North Korea’s east coast next to the city of Rason, gives China easier access to South Korean and Japanese markets, and opens up Jilin Province to easier Northeast Asian exports.
North Korea gave Rason free trade zone status two years ago, and it was the first city to host an economic zone – Rajin-Sonbong. Since then, China has been exporting coal through the port. The new lease agreement, though, means China can choose what facilities it wishes to utilize and where to build them as it sees fit. The port may also be used for tourism, with Chinese tourists holding special visas being permitted to land and board onward cruises to Russia, Japan and South Korea.
China lost control over the Sea of Japan in the 19th century following skirmishes with Russia and Japan in the region. China ended up losing territory to both and, as a result, the provinces of Jilin and Heilongjiang have been landlocked ever since.
The deal underlines the Chinese Government’s desire to develop the Northeast as an important trade route into Russia, Korea, and Japan.
Last year, China’s State Council approved a proposal to turn Jilin’s Tumen River area into an economic development zone.
“It is encouraging to see North Korea taking commercial steps and the Chinese certainly know how to develop port facilities. While it remains an experimental project as is reflected in the short lease period, it could well turn out to be pivotal for the region. Northeast Russia, and ports such as Zarubino also need investment,” says Chris Devonshire-Ellis, publisher of 2point6billion.com and the founding partner of Dezan Shira & Associates. Similar short-term lease arrangements could be just the spark to show the area’s regional governments the way ahead.
“While concerns may remain short term in the region concerning China’s intentions over land claims,” says Mr. Devonshire-Ellis, also an elected member of the Business Advisory Councils to the United Nations Development Program mission for the region, the Greater Tumen Initiative, “if these can be allayed and the Chinese be seen to be playing an even hand in providing these ports with upgraded facilities, and recognizing sovereign territory, then the northeast has great potential for development over the next twenty years.”
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