North Korea and China To Open A Border Trade Zone in October

In October, China and North Korea are set to open a border trade zone in order to improve economic relationship amid ongoing tension.

Found in Dandong, in northeastern Liaoning province, the Guomenwan trade zone will be opened as part of the incoming trade and tourism expo. According to Want China Times, the city serves as the center of tourism, investment and trade between the two countries.

The 24,000-m2 border trade zone has been funded with $156 million or 1 billion yuan. However, allotment and breakdown of the fund has not been made clear. On the other hand, opening the zone means citizens living within 20 kilometers from the border can trade with their neighbors while receiving tax breaks for specific purchase amounts.

China has long attempted to entice North Korea into revolutionizing the economic system by trying to establish free trade zones, as reported by Channel NewsAsia. But their efforts have been fruitless because of the lack of interest from investors and apprehension of engaging in business deals with a country sanctioned by the United Nations.

Given North Korea's small and secluded economy, the country has had a few networks in terms of trade apart from China, which has been the country's leading associate in trade for many years. However, economic ties between China and North Korea have been affected when the United Nations sanctioned the latter for their banned nuclear program.

Ever since the tension between the two countries had sparked, China has turned to South Korea, North Korea's rival and Asia's fourth largest economy, for economic relations.