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NUKEWARS
China helped lower tensions with NKorea: US
by Staff Writers
Aboard A Us Military Aircraft (AFP) Jan 8, 2011


China plans massive investment in N. Korea
Seoul (AFP) Jan 7, 2011 - China has proposed a huge investment deal to revive North Korea's faltering economy, a report said Friday, amid an international drive to coax Pyongyang back to nuclear disarmament talks. China's state-run Shangdi Guanqun Investment plans to invest about $2 billion in a project to build up a North Korean free trade zone into a regional export base, the JoongAng newspaper said. A memorandum of understanding was signed with Pyongyang's Investment and Development Group on December 20, it said. The two sides hope the area in Rason near the North's border with China and Russia will be the biggest industrial zone to be built in Northeast Asia in a decade, the daily said, citing documents related to the deal. Pyongyang issued a decree in January to upgrade the status of Rason, formerly Rajin-Sonbong, which became a special economic zone in 1991 but never fulfilled its proposed role as a transport hub.

Yang Moo-Jin, a professor at the University of North Korean Studies, said Beijing appeared to have arranged the deal as the impoverished North wants economic aid and other incentives before returning to long stalled six-party nuclear talks. "If it is true, the investment represents Chinese incentives to North Korea in return for its commitment to denuclarisation and peace on the peninsula," he said. Tough United Nations sanctions brought by the North's pursuit of ballistic missiles and atomic weapons have hurt its economy, restricting the communist state's access to international credit. But analysts say any massive economic assistance from China may come only after it gets strong commitment from Pyongyang about denuclearisation.

The deal was described as a strategic joint project, the daily said, adding North Korean leader Kim Jong-Il had apparently discussed it with Chinese leaders. "The project demonstrates the start of full economic cooperation," which has been badly sought by Pyongyang to recharge its economy, Yang said. While the project is part of Beijing's economic aid to Pyongyang, Chinese businesses also expect to reap huge benefits, the daily said. The project calls for the construction of coal-fired power plants, roads, piers and an oil refinery in Rason, it said.

It quoted an unnamed Shangdi Guanqun Investment official as saying: "We have a deep interest in North Korea's ample natural resources." Shangdi Guanqun Investment is a state firm specialising in oil processing, natural resources and financial services. Its North Korean partner is in charge of developing free trade zones. The isolated communist country has been cautious in opening its doors to the outside world. But it has strived to revitalise Rason through cooperation with China and Russia. China, Pyongyang's sole major ally, has actively explored investment opportunities in North Korea and secured the rights to much-needed natural resources such as iron ore and coal.

US Defense Secretary Robert Gates on Saturday said China has helped ease a crisis on the Korean peninsula after Pyongyang shelled a South Korean island.

"We recognize that China played a constructive role in lessening tensions on the peninsula in the latter part of last year," Gates told reporters aboard his plane before a visit to Beijing.

During his three days of meetings in China, Gates said he planned to discuss with top officials how to move North Korea towards a less aggressive stance.

"Speaking in broad terms, I think one of our goals is to see if we can get out ahead of these periodic provocations by the North Koreans and bring greater stability to the peninsula," he said.

"We have a mutual interest in that."

US officials have often expressed impatience with China over its approach to its North Korean allies, urging Beijing to use its leverage with Pyongyang.

North Korea on Saturday took fresh steps to mend ties with the South, suggesting talks within weeks and reopening an office to encourage cooperation on the fractured peninsula.

Tensions spiked after the North shelled the South's frontline Yeonpyeong island on November 23, killing four people.

Gates said he expected diplomacy towards North Korea to be a key focus of his talks starting Monday in Beijing, as well for President Hu Jintao's visit to Washington in a week.

The United States wanted to discuss "how we can work together to prevent further provocations, bring greater stability and see if we can move forward with North Korean denuclearization," he said.

Gates heads to Tokyo Wednesday and Seoul on Friday with North Korea expected to dominate his meetings.

earlier related report
S. Korea to relaunch tourism near border with North
Seoul (AFP) Jan 9, 2011 - South Korea said Sunday it would reopen tourist areas near the border with North Korea as tension sparked by the North's deadly shelling of a frontier island in November shows signs of easing.

The defence ministry said all tourist spots and observation posts used by tourists at Imjingak, along the western border with North Korea, would be open to the public as of Monday morning.

The area, about 54 kilometres (33 miles) northwest of Seoul and popular among tourists, was closed on November 23 when Pyongyang shelled Yeonpyeong island, killing four South Koreans including two civilians and sending regional tensions soaring.

Pyongyang has recently lowered its military alert status, prompting Seoul and US forces to reduce their own alert status to a normal level, Yonhap news agency reported.

Special observations points used by tourists to peer into Northern territory were reopened last month, but Dora Observatory, which has the most extensive view, along with several other spots, remained closed due to its exposure to potential attacks.

"We now believe fully reopening the area will not be a problem for the safety of tourists," the ministry spokesman told AFP.

Tensions have been acute since the shelling, which was the first attack on a civilian area since the 1950-53 Korean War and prompted a series of military exercises by the South in a show of force against the North.

Pyongyang angrily responded by pledging retaliation but did not follow through on its threats.

The North also said last week it was open for dialogue with Seoul, after South Korean President Lee Myung-Bak reached out and offered closer economic ties if the communist nation shows a sincere effort to mend ties.

earlier related report
Korea, US troops lower alert status: report
Seoul (AFP) Jan 7, 2011 - North Korea has lowered its military alert status, prompting similar moves by Seoul and US forces as tensions on the Korean peninsula showed signs of easing, a report said Friday.

The apparent moves came as South Korea held its latest war games to simulate an infiltration by North Korean troops across the disputed Yellow Sea border, officials said.

Tensions have been high since the North shelled South Korea's frontline Yeonpyeong island on November 23.

Yonhap news agency quoted unidentified South Korean government sources as saying that the North recently lifted a special alert it issued on November 21 for its military forces on the coast near the tense sea border.

"The North Korean military recently withdrew an order for special military readiness it had issued in connection with our Hoguk military drills (in November)," a source was quoted as saying.

The South Korean military and US forces in South Korea had consequently reduced their own alert status by one notch to a normal level, the source said.

South Korean troops have lowered "the level of their alert status by one notch in some areas due to fatigue", a defence ministry spokesman told AFP, adding the move was not related to any political development.

He also said the computerised military exercise involving the South Korean navy and marines "began as planned", declining to give details.

Navy officials said Friday's manoeuvres were designed to enhance the South's capability to repel a surprise landing on islands.

Command posts were involved in the simulated war games but it was unclear whether troops were involved in any physical manoeuvres.

Besides the shelling in November, the North also raised security fears that month by disclosing a uranium enrichment plant to visiting US experts.

But after a difficult year on the Korean peninsula, 2011 started on a more peaceful note.

The North began the year calling for improved relations with Seoul, while South Korean President Lee Myung-Bak Monday also reached out, saying he was open to talks and offering closer economic ties.

Efforts to resume long-stalled nuclear disarmament talks with the North also gained momentum as Beijing urged dialogue and Pyongyang signalled it was willing to return to the negotiating table.

In an unusually cordial statement, carried by its KCNA agency, North Korea said Wednesday the communist nation "courteously proposes having wide-ranging dialogue and negotiations".

But South Korean officials were dismissive of the comments.

Vice Unification Minister Um Jong-Sik said on KBS radio that the North should show seriousness of purpose by acting on its obligations under a 2005 agreement on denuclearisation and apologising for the November shelling and the sinking of a South Korean warship last year.

Amid the more positive tone, Japan's foreign minister called for renewed dialogue on the divided Korean peninsula in Washington on Thursday, but said the North should first take "concrete actions" to lower tensions.

The US special envoy on North Korea, Stephen Bosworth, meanwhile wrapped up a three-nation tour to discuss easing tensions in the region, after stops in Seoul, Beijing and Tokyo to discuss the situation on the peninsula.

And a South Korean newspaper reported that China has proposed a huge investment deal to revive North Korea's faltering economy, amid efforts to get Pyongyang to return to nuclear disarmament talks.

China's state-run Shangdi Guanqun Investment planned to invest about $2 billion in a project to build up a North Korean free trade zone into a regional export base, the JoongAng newspaper said.

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NUKEWARS
China plans massive investment in N. Korea
Seoul (AFP) Jan 7, 2011
China has proposed a huge investment deal to revive North Korea's faltering economy, a report said Friday, amid an international drive to coax Pyongyang back to nuclear disarmament talks. China's state-run Shangdi Guanqun Investment plans to invest about $2 billion in a project to build up a North Korean free trade zone into a regional export base, the JoongAng newspaper said. A memorand ... read more


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