North Korea's decision to turn a frontier town into a "special administrative region" resembles steps taken by China 20 years ago, although the result may eventually be less momentous, analysts say.
The Sinuiju zone near North Korea's border with China could mean an opening into one of the world's last great unexploited markets, the way Shenzhen in south China did two decades ago, they said.
"So many companies have already invested in China, there are lots of opportunities, lots of niches, to be taken in North Korea," said Maxim Kozlov, a Beijing-market analyst for Korea Business Consultants.
"In North Korea, you can't use a mobile phone -- that's just one opportunity," he said. Pyongyang's official Korean Central News Agency said last week that the government would allow Sinuiju "to be turned into an international financial, trade, commercial, industrial, up-to-date science, amusement and tourist center."
Sinuiju, on the western edge of a river flowing between China and North Korea into the Yellow Sea, has been one of the North's main outlets for outside trade and is linked to the Chinese city of Dandong by bridge.
The announcement coincided with the start of de-mining work on the heavily fortified inter-Korean border to restore railway and road links -- one from Seoul to Sinuiju and a second line along the east coast.
The Stalinist state, which has officially banned any private ownership, suggested property and land laws could be eased in the city, with leases extending for the next half-century.
"The state shall give the region the rights to develop, use and manage the land and encourage the businesses in the region to hire manpower from [North Korea]," Pyongyang said.
In particular, this access to North Korean labor is one attraction that many foreign investors will gradually come to appreciate, observers said.
"North Korean workers are much better educated than many people expect, they are very disciplined and eager learners," said Kozlov, whose firm has worked in North Korea since 1998. "Many consider them more diligent than Chinese workers."
The North Korean announcement that Sinuiju would become a special zone immediately triggered comparisons with Shenzhen, which in two decades developed from a tiny fishing village to a modern, high-rise city.
"[Sinuiju] has virtually become North Korea's first special economic zone emulating the Chinese city of Shenzhen," said Suh Jae-Jean, a North Korea expert at the Korea Institute for National Unification in Seoul.
However, there are also differences between the two cities, most importantly in terms of geographic location.
While Shenzhen had the huge good fortune of being the neighbor of Hong Kong -- already a global trade and financial hub -- Sinuiju borders on one of China's most inward-looking areas, the northeastern rustbelt.
The implication is that the Sinuiju special zone is unlikely to become a gateway to the world for the ailing North Korean economy.
RSS