Rajin-Sonbong Economic and Trade Zone, DPRK

Rural scenery in Rajin-Sonbong

The Rajin-Sonbong Economic and Trade Zone in the northeastern part of the Democratic People's Republic of Korea (DPRK) was established in December 1991 to stimulate international trade and investment. The Zone, which forms a 746 km² triangular coastal area along the Chinese and Russian borders, provides a key transport link between Northeast China and the East Sea of Korea/Sea of Japan.  The population of the Zone is approximately 150,000.

Over half the area consists of hills and mountains, and forests cover 68%. The climate is temperate, with snow from January to March. Rainfall is relatively high with an annual average of 770 mm, more than half of which falls in summer. Warm sea currents help keep the climate mild. The Tumen River freezes for four months, but the ports of Rajin-Sonbong (Rason for short) are ice-free. The Zone's clean water and sandy beaches make it ideal for recreational tourism in summer.

The Rajin-Sonbong Zone is rich in natural resources, particularly coal, high grade iron ore, magnesite, nickel, crystal and ceramic clay. There are abundant fish and seafood resources, both from the sea and from the area's many lakes. Major products include pollack, sardine, herring, salmon, shrimp, shellfish and seaweed. High value export items include sea urchin, trepang, squid, crab, clam and oyster.

The Rajin-Sonbong Zone is well suited to a range of seasonal crops, livestock and forestry. Agriculture is based on maize and rice; potatoes, beans and fruit are also grown. Large areas of coastal pasture near the Tumen River support cattle, pigs, sheep and mink. There is also poultry and duck farming. Cultivated land accounts for 13% of the Zone's area. The large forests contain mushrooms, ginseng, mountain herbs and other valuable raw materials for production of traditional Korean medicine. There are deer farms on the DPRK-Russia border.

There are several ports, the most important of which is Rajin. Rajin port has a capacity of three million tonnes per annum, with three piers that can accommodate ships of up to 30,000 tonnes. Current throughput is less than 10% of total capacity. Rajin is connected by a single track electrified railway to the Russian border at Tumangang, and to the Chinese border at Tumen City. There are also road connections between the Rajin-Sonbong Zone and China.

The Zone is managed by the Rajin-Sonbong City People's Committee, which has established a number of departments to promote and strengthen new economic activity centred on customs-free international transit trade, transport, bonded warehousing, preferential export processing activities, manufacturing, tourism and services.

Economy

Investment in a number of leading sectors has changed the nature of employment and business opportunities in the Rajin-Sonbong Zone in recent years. Much of the recent foreign direct investment in the Zone has been concentrated in seafood harvesting and processing. Port and shipping infrastructure, tourism, commercial services, telecommunications, education and hospital facilities are leading the development of the Zone. Container shipping and international transport services are also developing.

The manufacturing sector comprises about fifty locally run state owned factories engaged in food processing, basic household consumer products, garments, tanning products and wood processing. All manufacturing enterprises in the Zone have been approved for rehabilitation and expansion under the Zone's new investment programme.

DPRK's largest oil refinery, located at Sonbong, has an annual capacity of two to three million tonnes. Other large state enterprises include Sonbong oil port, Ungsang timber port, Sonbong thermal (heavy fuel oil) power plant, and the Rajin ship building and repair yard (recently specialised in trawler building and repair).

The comparative advantages of the Rajin-Sonbong Zone include low manufacturing costs, its prime location for transport and trade with China and Russia, natural resources, and tourism opportunities. The Zone offers tax incentives and relatively low land lease and labour costs.