A remote corner of China wants access

to the sea. The obstacle is North Korea.

CHINAS BACK YARD | This is part of an occasional series examining Chinas
efforts to win friends and clients in Asia and to assert a more dominant role
across the continent.

Parts of Russia, China and North Korea are seen from a tower in Fangchuan, Hunchun,
China, on Aug. 7, 2015. The lake area on the left is in Russia, the land in the middle is in
China and the right side of Tumen River is in North Korea. (Shin Woong-jae/For The
Washington Post)

By Anna Fifield-October 15
FANGCHUAN, CHINA You can almost smell the sea air from here, at the point
where China, Russia and North Korea meet, where slogans pronounce One eye, three

countries and tourists pose for photos against a green landscape in which the borders
are imperceptible.
But for the Chinese, smelling the sea air is all they can do. Their border lies 10 miles
inland, because of the Russian annexation of the area in 1860. That means Chinas
landlocked northern provinces are dependent for sea access on Russia, whose efforts to
develop eastern ports havent amounted to much, and North Korea which has some
reliability issues, to say the least.
Now, China is hoping to triumph over decades of false starts and finally secure access
to the sea, enabling it to ship goods produced here to destinations elsewhere in Asia
and farther afield instead of sending them by train to ports to the south.
Authorities are pumping money into infrastructure projects as part of President Xi Jinpings
plan to build a new Silk Road trading route and to make this area, which incorporates the
Yanbian autonomous prefecture with its large ethnic Korean population, relevant again.
South Korea wants a part of the action, too. It is eyeing the area as a kind of off-site Korean
unification project, with businesses preparing for when North Korea opens up or for when it
fails, although they are careful not to talk in such a pointed way.
There are lots of companies just perched here, just waiting for North Korea to
collapse, said one foreign resident in the area, speaking on the condition of anonymity
so as not to jeopardize his work.

China has built a $7 billion, 225-mile-long highspeed railway line from Changchun, the
provincial capital, to Hunchun. The plan is for the
rail line eventually to connect with North Korea.
(Shin Woong-jae/For The Washington Post)

Workers construct a warehouse at Hunchun Posco

Hyundai International Logistics center on Aug. 7,
2015. (Shin Woong-jae/For The Washington Post)

The biggest South Korean presence here although its officials swear theyre here for
the trading hub, not positioning themselves for the demise of North Korea is
Hunchun Posco Hyundai International Logistics. A joint venture between two South
Korean corporate behemoths, it has built a big distribution center on the outskirts of
Hunchun, a Chinese city half an hours drive from the point where the three countries
converge.
Of course we see the potential of this area, Yeon Jei-sung, the companys president,
said in an interview in his office. The three countries meet here, and that in itself can
be a core place for trade.
Such a pronouncement, however, is predicated on one crucial factor: the development
of Rajin port. And Rajin port is in North Korea.
We should have taken it while we had the chance, said a local real estate developer,
referring to the Korean War, when China came to North Koreas rescue. He spoke on
the condition of anonymity to avoid annoying local Koreans.
While North Korea is promoting the area Rajin and the neighboring city of Sonbong
are together known as Rason as a special economic zone, previous efforts at opening
have not gone far.

Over the years, this area has been described as the next Rotterdam. In the early
1990s, the U.N. Development Program spearheaded an ambitious project called the
Greater Tumen Initiative, named after the river that runs through the region. The
project went nowhere.
This is not an obvious place for the worlds next great logistics hub. This is where some
of the most forgotten parts of three countries converge: the Far East of Russia, where
6 million people live in an area the size of Europe; the depopulating northeast of
China, which managed to miss out on the countrys boom of recent decades; and the
northern reaches of North Korea, a difficult place to survive and where the hostile
classes have long been sent to languish.
North Korea established Rason as a free-trade zone in 1991, modeled on zones that had
powered the export-led explosion of growth in China. But nothing much happened
until 2010, when the regulations governing the area were loosened and the regime of
Kim Jong-il began some tentative experimentation for example, allowing residents
to buy apartments and foreigners to enter more easily.

[North Korea might be courting Russia, but China still looms larger]
This time, the project might stand more of a chance, said Adam Cathcart, a lecturer in
Chinese history at the University of Leeds in England. Its been 25 years since they
started talking about this, and its gone in fits and starts, but mostly not moving, he
said.There is a certain critical mass now.
The huge amount of money that China is spending on infrastructure in the region
could prove to be a game-changer, Cathcart said.
China has built a $7 billion, 225-mile-long high-speed railway line from Changchun,
the capital of Jilin province, to Hunchun. It is set to open this month. The Russian
news agency Interfax reported in May that provincial authorities had suggested
extending the line to Vladivostok, Russia. The plan is that the rail line will eventually
connect with North Korea.
For now, China is building a bridge across the Tumen River at the Quanhe border
crossing with North Korea it is clearly visible from lookout points in the area and
China also is building a road to Rajin.
This area of northeastern China was a center for heavy industry, particularly mining
and automotive manufacturing, during the first half of the 20th century, especially
during the Japanese occupation. But it suffered under the market-oriented economic
reforms that Chinese leader Deng Xiaoping initiated in 1978 and more recently as large
numbers of the ethnic Korean population have left for better opportunities in South
Korea.
Xi has a plan to stimulate the growth of heavy industry in northeast China, part of his
Belt and Road initiative, through infrastructure such as the rail project, aimed at

making it easier for people to come here.

The area is also crucial for South Korean President Park Geun-hye and her Eurasia
Initiative, which would link South Korea to Europe by rail but for the notinconsiderable physical obstacle that is North Korea.
With that in mind, Posco, a South Korean steelmaker, has teamed with Hyundai to
build the logistics centA Washington Post reporter saw several trucks with Rason
license plates entering China at the Quanhe border crossing near Hunchun. But being
able to ship Chinese products out in the other direction, through Rajin port, would
provide a huge booster in Hunchun, a city of 220,000. It has three storage units acting
as a staging post for goods on their way in and out of the region, including seafood
clams, squid and octopus from North Korea. The logistics center also handles
agricultural goods, timber and auto parts from China, and expansions are planned
depending on demand.
A Washington Post reporter saw several trucks with Rason license plates entering
China at the Quanhe border crossing near Hunchun. But being able to ship Chinese
products out in the other direction, through Rajin port, would provide a huge boost to
the region, proponents say.
Today, sending a container from Hunchun by train through China and then by sea to
South Korea costs about $2,000. Exporting it directly from the port of Rajin would
halve that cost, said Yeon, the Posco president.
Rajin is going to open up maybe in three to five years, he said. Its imminent.
But Yeon has never been to Rajin, partly because of a South Korean government
requirement citizens to get official permission to enter North Korea.

Despite the obstacles to gaining access to North Korea, South Korean companies,
hungry for new markets and eyeing the 26 million potential consumers in the North,
still view the area as a new opportunity.
Recent reports, including one by the Souths Korea Development Institute, have
suggested that South Korean companies could contract Chinese firms to run factories
in border cities including Hunchun and hire North Korean workers. North Koreans
already work in factories run by South Korean companies at a small inter-Korean
industrial park, but sanctions have limited the firms ability to hire additional cheap
labor from the North.
A recent poll from the Souths Korea Chamber of Commerce and Industry found that
87 percent of companies surveyed have or would have an interest in doing business in
the North if unification were to occur.

The Quanhe border crossing near Hunchun. (Shin

Woong-jae/For The Washington Post)

Visitors in China peer into North Korea across the

Tumen River at a souvenir shop near the Quanhe
border crossing. (Shin Woong-jae/For The
Washington Post)

There are many impediments to a breakthrough, not the least of which is North Korea and its
irascibility.
The problem is still Rason and getting to it, said Cathcart, who has written reports

about the region. The relationship between China and North Korea with regards to

the use of Rason is still problematic. Its not unfettered access.

South Koreas Eurasia Initiative and its plans to link up with the Trans-Siberian and
Trans-China railways depend on North Koreas allowing the Souths trains to pass
through the country. But Pyongyang in June blocked South Koreas bid to join the
organization that approves cross-border rail lines, a requirement in building a transAsian railway.
And Chinas plans have been complicated by North Koreas 2013 nuclear test, which
resulted in new international sanctions, and by North Korean leader Kim Jong Uns
decision to execute his uncle, Jang Song Thaek, the main interlocutor in business deals
between North Korea and China.
For its part, Russia has shown little interest in the area. A lonely-looking Russianbuilt storage facility is visible from the Posco center, but locals say it has never been
operational. And Russias Summa Group was supposed to be developing the port at
Zarubino, also near this intersection, but has reportedly run out of money.
China has more reason than ever to develop this area, says Xuan Dongri, director of
the Institute of Northeast Asian Studies at Yanbian University.
China is pretty anxious about this, he said, adding that without North Koreas
cooperation to develop the region, China will be hampered in realizing its dream of
greater prosperity.
No matter what, this brother of ours is still very important, Xuan said. And for
Chinas dealings in northeast Asia, North Korea is the biggest obstacle.
Seo Yoon-jung and Gu Jinglu contributed to this report.
Posted by Thavam