A Chinese company is preparing to begin construction on a 1.5 million square-meter special economic zone in the DPRK border city of Sinuiju, according to a document from the company obtained by NK Pro.

The “Five Continents International Development Corporation” is reportedly set to start work “in the spring of 2019” on the first phase of the project consisting of a 300,000 square-meter patch of land and an initial USD$100 million investment, information posted online by a Chinese businessman attempting to attract investment for the project showed.

According to the user “Powerful Perspectives” on Chinese social media platform WeChat, Five Continents will have exclusive development rights in the zone, which will be known as the Sinuiju “Heyuan” International Logistics and Trade City (SILTC).

SILTC will contain an “International Commodity Wholesale City, International Logistics City, processing park, foreign residence apartments, hotels, Commodity Exhibition Hall, Duty-Free Shop, financial securities, e-commerce, integrated services, entertainment and leisure, etc.,” according to the document.

Sinuiju International Trade City | Photo: NK Pro

It will also have “its own customs and border inspection, where transit goods can directly enter… avoiding the congestion of Dandong-Sinuiju Port… and greatly improving cargo flow.”

The company estimates the annual bilateral trade volume at the SILTC to be “around 5 billion RMB” (USD$744 million).

The location of the SILTC is listed in a presentation slide from Five Continents as falling inside the Sinuiju International Economic Zone, with a source familiar with the project telling NK Pro it will be located at the southern edge of Sinuiju in what is now primarily empty farmland.

The area is slated to be completely revamped soon, according to North Korean state media.

An area highlighted in red to the left of the main road will host the new Chinese-run economic park. The entire highlighted area is currently mostly farmland and residences, but was shown as highly developed in a plan which Kim Jong Un ordered to be redone last November | Photo: KCNA, edited by NK News

Kim Jong Un visited the city last November, where he ordered officials to revamp large-scale plans for transforming the “gateway” city by building new stadiums, tourist facilities, dozens of high-rise buildings, and other facilities, many of which surround the area believed to be chosen for the SILTC.

A review of recent satellite imagery, however, shows no major land clearing or other signs indicating preparations for the SILTC’s construction has begun.

Any new construction by a foreign firm is likely to result in a range of sanctions violations, not only as the export from China of machinery and materials likely needed for the project is prohibited, but also due to restrictions preventing “all joint ventures or cooperative entities” with DPRK companies or individuals.

But Five Continents is also involved in the Wonsan-Kalma tourist zone, according to the presentation slide, in addition to the Rason Special Economic Zone and “Hoeryong International Mutual Market Trade Zone.”

The company is additionally involved in an “aquatic products and timber processing base built near the aquatic and timber resources,” and in Rason, with the Rason International Commercial Bank.

Presentation materials from Five Continents (its logo shown in the top right corner of the slide) describing the Sinuiju project as well as its other business across North Korea | Photo: Powerful Perspectives Weibo account

Five Continents describes themselves in a slide introducing the company’s operations in the DPRK as a “pioneer for foreigners to invest in real estate in North Korea, and has become the only enterprise to open an international trade wholesale city in North Korea so far.”

The last line possibly indicates Five Continents is a new name of an existing company or directly connected to the company which jointly built with North Korean partners a similar “trade city” complex in Rason in 2012, which is detailed further below.

Other presentation materials from Five Continents shows the company is claiming responsibility for that project.

“The company concentrates on the investment and construction of projects in North Korea,” it says, with other areas of business in the country including “commercial banks, financial securities, insurance, real estate development, construction, sales and leasing of international trade logistics, international processing parks, international trade city, mutual trading areas, leisure and entertainment, and product processing bases, etc.”

Sinuiju International Trade City | Photo: NK Pro

A representative for another real estate company with headquarters in both mainland China and Hong Kong using almost the same name in Chinese characters, but which goes by Wuzhou International Holdings Limited, denied a connection to Five Continents, telling NK Pro on Wednesday it had no business in North Korea.

Chinese consulting partnership

While information about the Five Continents International Development Corporation is sparse, the company has made at least one public deal with another Chinese firm in connection with the new trade and logistics zone in Sinuiju.

On December 9 last year in Dandong, Five Continents held a signing ceremony with the Shanghai Jupeng Group over “establishing the ‘Heyuan’ in North Korea,” referring to the nickname of the SILTC, according to a press release published on several Chinese news outlets, including China Development.

Signing ceremony held on December 9, 2018. On the left is Li Ru for the Shanghai Jupeng Group, and on the right is Wang Ruoming representing Five Continents | Photo: China Development

But while North Korean and Chinese flags were displayed at the event, it appears Chinese individuals were signing for both parties.

Representing Shanghai Jupeng in the meeting were the company’s top two leaders Gou Beichen and Li Ru, while Wang Ruoming signed for what the article refers to as the “North Korea Five Continents International Development Association.”

Wang is named in the release as chairman of the company, and, according to sites detailing the progress on a pigeon shelter in a city near Beijing, was previously listed as a real estate developer with the Qinhuangdao Jindi Real Estate Company Ltd.

Also spelled as “Chinhuangdao Jindi,” Wang’s company made an appearance at the Rason International Trade Fair in 2017, appearing to be displaying or selling luxury goods such as jewelry in possible violation of sanctions.

This is the same company which jointly built the previously-mentioned RITC, also referred to as the Rason International Commercial Trade Center, in 2012, according to North Korean state outlet Korean Central News Agency (KCNA).

NK Pro has reviewed presentation materials from Five Continents which claim it was the company which built RITC, indicating it may simply be the new name for the existing Qinhuangdao Jindi company – both headed by Wang Ruoming.

The two pictures on the left show Wang Ruoming in 2010-11 working on the Beidaihe King Island Racing Pigeon Public Shelter in Qinhuangdao, China. The two photos on the right are of Wang at the December 2018 meeting regarding the SILTC | Photo: Multiple sources, edited by NK Pro

The DPRK partner on that project was the Rason Paekho Trading Company, possibly the same Paekho Trading Company which frequently appears in North Korean trade fairs displaying paintings and other art.

The Rason Paekho Trading Company’s president was named as 45-year-old male Song Ryang Dok in the 2012 KCNA article.

Wang was also named in KCNA using the Korean spelling of his Chinese name, Wang Yak Myong, as a visitor to Pyongyang representing the Qinhuangdao Jindi company for events in July 2013 celebrating the 60th anniversary of the end of the Korean War.

The Chinese partner at the signing, Shanghai Jupeng, describes itself on its website as a business consulting agency established in 2001 that has “provided consulting services for many government organizations,” and in recent years has focused on real estate marketing and tourism, among other areas.

The name of the company gearing up to begin construction on the economic zone is displayed in English and Chinese, and its logo matches those depicted in presentation slides above | Photo: China Development

The press release says the partnership “aims to respond to the community of human destiny and the ‘Belt and Road Initiative’,” and is “in line with the continuous development of tourism between China and the DPRK.”

The Chinese fixer

The man behind the “Powerful Perspectives” persona online does not provide his name, but lists his affiliation with the “Changchun Huixin Software Technology Co., Ltd.” and various seafood distributors, including the “BBL North Korea Seafood Supply Chain.”

He asks in his multiple posts across various Chinese media platforms such as Weibo, WeChat, and Zhihu that those “interested in cooperating with individuals, companies and investment institutions” in the SILTC contact him directly.

“We can arrange business matching with the project developer Five Continents… and arrange site visits at any time,” he continued.

Another project he has promoted and in which Five Continents appears actively involved is the “Hoeryong International Processing Trade Zone,” also referred to as the China-DPRK Inter-city or Mutual Market Trade Zone.

Two images of the Hoeryong zone in which Five Continents appears to be involved | Photo: Powerful Perspectives Weibo account

He posted 3D renders of a small complex of warehouse buildings which match the style of the SILTC renders, and writes that the zone will comprise a “processing park, international logistics center, international commodity wholesale city, international transit trade, foreign residential apartments, hotels, merchandise showrooms, duty-free shops, cold storage, fresh seafood holding pool, e-commerce, comprehensive services, etc.”

The zone will facilitate “border trade and automobile cargo transportation” and serve as “the main channel for border residents to visit relatives,” the post to Weibo said.

“Upon completion, it will be an important channel for the rapid entry of various types of seafood on the east coast of Korea,” he added, again requesting interested parties contact him directly.

The Chinese business man (yellow jacket) heavily promoting the Sinuiju zone, a Rason tour for potential Chinese investors, and other opportunities recently. His has not published his real name | Photo: Powerful Perspectives Weibo

Recently, he has been actively promoting a three-day “Business Study Tour” for potential investors and traders to the Rason SEZ, scheduled to depart from the nearby Chinese city of Hunchun on March 2.

The tour will provide opportunities for visitors to visit factories and discuss purchasing shop space or apartments in the Rason International Trade City (RITC) – a building complex housing the Rason International Commercial Bank, a Rajin Market, six-story apartment blocks, hundreds of individual shops, and even casinos, according to one post.

Sanctions risks

While Wang Ruoming’s real estate developer company Qinhuangdao Jindi was able to form a partnership with Rason Paekho Trading Company back in 2011 to construct the RITC, a number of new UN sanctions resolutions would prevent another such large-scale project in Sinuiju this year.

Among these are a ban on joint ventures with North Korea, with UN Security Council Resolution 2375 passed in late 2017 prohibiting “the opening, maintenance, and operation of all joint ventures or cooperative entities, new and existing, with DPRK entities or individuals” unless pre-approved by the 1718 Sanctions Committee.

This would seem to prevent the construction of the SILTC, even if the project was carried out entirely using DPRK materials and labor, as long as Five Continents or other Chinese actors intend to be involved in managing the zone or reap any of its benefits.

If it is built using materials imported from China and indeed, as Five Continents claims, as a project wholly-owned by the Chinese company, then it would appear to be in violation of the joint ventures measure, as well as rules preventing the import of “industrial machinery, transportation vehicles, and iron, steel, and other metals” banned under Resolution 2397 passed in December 2017.

But considering Wang’s prior work building the RITC in Rason, his leading the Five Continents company lends credibility to the seriousness of the project and the company’s intentions to begin construction as soon as possible or even this spring, as it has claimed.

The project, if allowed by the respective governments to go ahead, would serve as another sign of relaxing attitudes towards sanctions enforcement in China and could cast serious doubt on the viability of the present international sanctions regime.

Edited by Oliver Hotham

Featured image: NK Pro