China orders shutdown of North Korea entities, joint ventures

By Elizabeth Shim  |  Sept. 28, 2017 at 11:02 AM
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Sept. 28 (UPI) -- China is giving businesses less than 120 days to close down all North Korean joint ventures, and asking North Korean entities to suspend operations in the country by the deadline.

The announcement from Beijing's commerce ministry comes two days after the U.S. Treasury announced sanctions against eight North Korean banks, including at least two that are operating as joint ventures in China.

Target companies need to close 120 days from Sept. 11, when the United Nations Security Council adopted Resolution 2375, the ministry said.

"All China-North Korea joint ventures, other joint ventures, foreign-invested enterprises must be shut down in accordance with sanctions No. 2375 of the United Nations Security Council," the Chinese ordinance read.

"Companies established by Chinese companies abroad with North Korea should also be shut down in the same manner," the ministry added, according to South Korean news agency Yonhap.

The world's second-largest economy has wrestled with its belligerent neighbor's nuclear provocations for years.

Beijing has explicitly called for denuclearization but has avoided releasing statements that directly antagonize North Korea or North Korea activities in the country.

Pyongyang depends heavily on trade with China, and the latest U.N. sanctions could mean North Korea could lose about $800 million annually from sanctions on textile exports and an additional $500 million from restrictions against "guest workers" sent overseas, the South China Morning Post reported Thursday.

Official Chinese data on North Korea investment in the country show a precipitous decline in recent years.

Direct investment totaled $22 million from 2006 to 2015, but it was barely $70,000 in 2015, the lowest level since 1997, according to the Post.

Zhang Huizhi, a North Korea expert at Jilin University, said most joint ventures between North Koreans and Chinese are restaurants, which have declined in number.

Two North Korean banks on the U.S. Treasury list, Jinmyong Joint Bank and Jinsong Joint Bank, are joint ventures with banks in China.

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