Markets in a Few Things

NYTimes: “The Rason government will do our best to provide favorable conditions for investment,” said Hwang Chol-nam, the vice mayor in charge of economic development. “Please tell the world.”

A common refrain from a mayor, unremarkable, except for the fact that Rason is in North Korea.

North Korean leaders are slowly opening their isolated nation to foreign investment.

A thrust of their strategy is to develop previously created “free trade and economic zones” on the borders that have languished. Here, about 30 miles from China, the combined towns of Rajin and Sonbong, called Rason, are central to the new push.

…“The policy environment has been improving continuously,” said Zheng Zhexi, 58, the company’s vice president. “It’s moving towards a market economy.”

He pointed to the official tolerance for the bazaar, where merchants rent stalls from the government to sell goods that they buy from Chinese traders. Prices fluctuate and shoppers haggle. The bazaar has proved so successful that it is expanding to six times the current size.

An interesting experiment that one hopes will expand. Don’t expect too much, however, consider this rather amazing survey of Chinese business people and what they say North Korea needs.

The Peterson Institute for International Economics, based in Washington, recently published conclusions from a 2007 survey of 250 Chinese companies doing business in North Korea. The authors found that while nearly 90 percent were profitable, the companies “generally have a negative assessment of the business environment” for reasons like poor infrastructure and lack of rule of law.