Korea

Organized Panel Session

4 - North Korea and Foreign Investment: Following the China Model?

Friday, March 23
10:30 AM - 12:30 PM
Location: Madison A, Mezzanine Level

This paper examines North Korea's openness to foreign investment, and argues that the legal regime its applies today is comparable to that in China before its accession to the World Trade Organization. The demonstration helps fill the glaring void of English-language scholarship on the topic. It matters not just to potential investors, but also to any policy or scholarly inquiry into how North Korea manages to attract foreign investment. It will also inform the debate on whether a China or Cuba-style economic rapprochement is a viable option to defuse the Korean nuclear crisis. The inquiry starts with an analysis of the foreign investment vehicles in North Korea. This consists in comparing North Korean equity joint ventures, contractual joint ventures and wholly foreign-owned enterprises with their Chinese historical equivalents, from which they are visibly inspired. The inquiry then turns to North Korea's focus on special economic zones in its strategy to attract foreign investment. After examining this strategy in the light of China's own use of such zones, it will discuss North Korea's experience with them in Kaesong, Sinuiju and Rason. The third part addresses dispute resolution mechanisms and the enforcement of investor protections in North Korea. It covers the North Korean judicial system and arbitration regime, here too with reference to its Chinese counterparts. The inquiry concludes with observations on the impact of war and sanctions on the development and openness of the North Korean economy, and the potential role of foreign economic engagement in the Korean nuclear crisis.

Henri Feron

Columbia University, New York

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