Monday, March 15, 2010

China gains Sea of Japan trade access

Some see the recent port lease agreement between China and North Korea as part of China's world power ambition (here). Others, as indicated in two leading South Korea news papers, (here) (here) view the deal as commercial in nature by bringing much needed investment into the North.   Lloyd's List (here) considers it a means to boost coal export, not a facility for the navy.

The PLAN is still a minor player in the Sea of Japan and a single coal exporting port will not change the balance of power.
China gains Sea of Japan trade access

* Source: Global Times
* [02:11 March 10 2010]

By Kang Juan

China has finally found a direct trade outlet to the Sea of Japan by making an agreement to lease a pier at North Korea's Rajin Port for at least 10 years. It is the country's first access to the maritime space in its northeast since it was blocked over a century ago.

North Korea's willingness to lease China a pier at the port, as well as ono for Russia, has brought speculation that the country will further open up to the outside world.

According to Li Longxi, head of the Yanbian Korean Autonomous Prefecture in China's northeastern Jilin Province, a private company in China had obtained the right to use Pier No. 1 at Rajin Port for 10 years, and its infrastructure renovation is currently underway.

"We can carry out cross-border transportation through the Rajin Port and ship coal from Yanbian to Southeast China via the Sea of Japan," Li told the China News Agency on Sunday. "It pays in terms of transportation efficiency and cost."

Statistics showed that, Rajin Port, which does not freeze over in winter, includes three wharfs in use, covers 380,000 square meters and has a freight transit capacity of 4 million tons. It became a free trade port when Rajin-Sonbong City was declared a free trade zone in 1991, the first in the North. The zone was later renamed Raseon.

According to a statement on the Yanbian authority's website last month, the Ch-uangli Group, based in Dalian, Liaoning Province, invested 26 million yuan in 2009 to rebuild Pier No. 1 and construct a 40,000-square-meter warehouse at Rajin Port.

The North's opening of the port is significant for China as it will provide direct access to the Pacific, South Korea's Yonhap News Agency reported Tuesday.

China lost access to the Sea of Japan in the 19th century during the Qing Dynasty when it was forced to sign a series of unequal treaties following skirmishes with Russia and Japan in the region. The provinces of Jilin and Heilongjiang have been landlocked ever since.

In fact, the southeast border of Jilin is only 15 kilometers from the mouth of the Tumen River, with access to the Sea of Japan blocked by Russia and North Korea.

"Theoretically, Chinese ships have the right to enter the Sea of Japan through the Tumen River, based on an agreement with Russia, but a railway bridge between Russia and North Korea blocked that entrance to the sea," Lü Chao, a researcher of North Korea at the Liaoning Academy of Social Sciences, said.

Yang Bojiang, an expert on Northeast Asia issues at the China Institutes of Contemporary International Relations, said the lack of ports to the Sea of Japan has restricted the development of the three northeastern provinces, Jilin, Liaoning and Heilongjiang, which are abundant in resources.

"Rajin port will become a logistics hub and a bridgehead of international routes for the area, especially for Jilin, which is at the center of northeast Asia," Yang said.

Freight in Hunchun city in Yanbian is usually transported to Dandong Port or Dalian Port in Liaoning Province before being exported to Japan, which takes three to four days. But if it goes via Rajin Port, which is only 48 kilometers from Hunchun, it will take just over 10 hours to reach Japan's Niigata Port, according to Xia Kejun, a trade manager in Hunchun.

The deal underlines the Chinese government's desire to develop the Northeast as an important trade route into Russia, Korea and Japan, according to, a Hong Kong-based news forum.

Lü, however, warned that a 50-kilometer-road linking the China-North Korea border with the Rajin port in North Korean territory remains in poor condition, which limits the access to and use of the port.

"The designed freight transit capacity is huge, but the actual volume remains low," Lü said, adding that the port could become fully operational only after facilities are improved.

He noted that the port deal is not a strategic plan for national security, but only for regional economy.

North Korea also gave Russia the right to use Rajin Port for 50 years, which will serve as an export path for Siberian crude oil and natural gas to neighboring counties, the Korea Herald reported Tuesday.

The North is also planning to fully open the city of Raseon, upgraded into a "special municipality" recently, to foreign businesses within six months, Japanese newspaper Sankei Shimbun said Monday.

South Korean officials were quoted by Yonhap as saying Tuesday that the South is keeping a close watch over North Korea's efforts, as the move might indicate that Pyongyang is opening up to the outside world and may be a signal that it intends to return to stalled international nuclear talks.

Yang Bojiang believes the cooperation agreement, including transit trade and logistics, will be conducive to overall stability in Northeast Asia.

"Increasing inter-dependence among countries through intensified economic and trade cooperation will help to resolve regional security issues," Yang said.

In another development, the construction of a new bridge linking Dandong of China and Sinuiju of North Korea across the Yalu River is expected to begin in October, a year after Chinese Premier Wen Jiabao agreed to the project during his visit to the North, according to Zhao Liansheng, mayor of Dandong, Liaoning Province.

Dandong is the point where 70 percent of trade between China and North Korea passes, but the existing bridge, which was built in 1937, is dilapidated.

Qiu Wei contributed to this story

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