Hwanggumpyong: Still Serene

Rason is developing steadily, if not swiftly. Kaesong continues to bridge the economies of the two Koreas, recent tax issues notwithstanding. Meanwhile, over at Hwanggumpyong…crickets.

Visitors to Hwanggumpyong in August described it as a dirt depository for displaced earth from construction projects elsewhere in Dandong. This, of course, is not what Pyongyang envisioned when it sent Jang Song Taek to the groundbreaking ceremony in 2011.

So why is so little happening there? Does this reflect tension between China and North Korea? Do suspicions related to 2002’s Yang Bin affair still lurk? Is China withholding HGP development as leverage on other issues? The answer is a resounding ‘probably not”. Why not?

This Yonhap News article from earlier this month offers some hints.

The unnamed source in the article complains that demand from Chinese companies for low-cost, high-productivity North Korean labor is quite high, but when they go to try to make it happen, the red-tape in and other obstacles in China make it impossible.

The fact is that while Rason offers legitimate logistical advantages to landlocked Chinese businesses and has strategic value, Hwanggumpyong still offers nothing but cheap labor. And outsourcing labor from China is not simply a business decision. So while it might make business sense for a Liaoning company to throw up a cheap factory in Hwanggumpyong and have several hundred North Koreans making textiles, it doesn’t make sense for a local government to allow that to easily take place.

At the provincial, sub-provincial and prefectural levels and below, there are employment and GDP targets to hit and even if you’re going to make many of your statistics up, they usually have to reflect something similar to what’s happening on the ground. Officials in Liaoning just don’t want to see thousands of jobs shipped across the border.

At the end of the day, it appears as if securing permission for small-scale importation of labor is not impossible. This article from Reuters illustrates the kind of venture that the Chinese are comfortable with: labor imported on a small scale. Twenty employees is a drop in the labor-pool. (It should be noted, this factory clearly is not ordinary, having received support from Incheon city government and combining South and North Korean staff.  Most companies employing Korean laborers would certainly be far more reticent to have journalists poking around.)

Earlier this month at the China-DPRK trade expo in Dandong didn’t appear to have any great focus on Hwanggumpyong, though leaflets promoting it were handed out. There were plenty of exhibitors at the expo, testament to how the Dandong-Sinuiju bridge across the Yalu continues to be the economic artery through which goods flow to Pyongyang. But until Liaoning gets comfortable with its businesses outsourcing jobs, Hwanggumpyong will be just another island in the river.