As Trump-Xi summit looms, evidence of strained ties on China-North Korea border

[April 04, 2017]  By Sue-Lin Wong and Joseph Campbell

NANPING/DANDONG, China (Reuters) - In the Northeast Asia Special Region straddling China's border with North Korea, the area around Nanping village is dotted with half-finished buildings, cranes on empty lots, piles of concrete pipes and a few construction workers.

What was planned in 2011 as a 30 billion yuan ($4.36 billion) development intended to showcase economic engagement between the two countries has stalled in recent months. No reasons have been given and no announcements have been made in official media.

About 700 km (430 miles) to the south, near the city of Dandong, the New Yalu River Bridge connecting the two countries lies unfinished. It was planned in 2010 at a cost of 2.2 billion yuan, but stands now as a monument to the slowdown in economic ties. (Map - China-North Korea border region http://tmsnrt.rs/2nCRNSX)

A Reuters team visiting the area saw some signs of trade - trucks coming across another bridge over the Yalu and boats being loaded with goods on the North Korean side of the river.

Beijing appears sensitive about the North Korea issue - a Reuters journalist who visited the Northeast Asia Special Region near China's city of Helong last week was escorted out by police.

"Right now tensions are so high between China and North Korea that even this economic zone is a sensitive topic," local official Wang Fusheng said.

The Helong local government declined further comment.

China's relations with North Korea are expected to be high on the agenda when Chinese President Xi Jinping and U.S. President Donald Trump hold their first summit meeting this week. Washington wants China to do more to rein in the unpredictable North's nuclear and missile programs, while Beijing has said it does not have that kind of influence.

Trump raised the pressure on Sunday, holding out the possibility of using trade as a lever to secure Chinese cooperation.

China has taken steps to increase economic pressure on Pyongyang but has long been unwilling to do anything that may destabilize the North and send millions of refugees across their border.

The slowdown in the economic relationship between the two countries became marked after North Korea's fourth nuclear test in January 2016 and a series of missile launches since then.

GLOBAL TRADE HUB

The development plan for the Northeast Asia Special Region was to link Helong with North Korea's Maofeng International Tourism Zone and its port city of Chongjin in an area that would feature golf courses, blueberry fields, horse riding, logistics hubs and trade in everything from timber to textiles.

The region is intended to connect China and North Korea via air, road and freight train routes, according to information on billboards in China's Nanping village, where North Korea is just across the winding Tumen River.

The ultimate aim is to export products from both countries through Chongjin to Japan, South Korea, the United States and Europe - an aspiration thwarted by tightening global sanctions over North Korea's nuclear and missile programs.

According to the plan, Nanping village itself is to be demolished and turned into the Helong Frontier Economic Cooperation Zone - a key part of the Northeast Asia Special Region.

The zone will "take advantage of North Korean labor, land, environment and resources," says one of the signs in Nanping, displaying pictures of seafood processing and light manufacturing of clothes, clocks and car parts.

Tourists pose with Chinese flag on a boat taking them from the Chinese side of the Yalu River for sightseeing close to the the shores of North Korea, near Dandong, China's Liaoning province, April 1, 2017. REUTERS/Damir Sagolj

One thousand North Korean workers were supposed to have started work last year, a number set to increase to 10,000 this year and 20,000 next year.

But the dormitories for the workers are half-completed and the economic zone hasn't opened.

"Those signboards are more a hopeful plan than a schedule we strictly follow. No one has moved in yet," said the manager of one of the construction sites, who gave his family name as Li.

According to signboards in Nanping, there were plans for 900 million yuan worth of infrastructure investment in the area, including a 10-km (6-mile) train track connecting Nanping and nearby Luguo village to North Korea's Musan mine, which has the largest-known iron ore reserves in the country.

RUDIMENTARY PLOWS

Villagers on the Chinese side of the border are wary of North Korea.

In 2014, in two separate incidents, at least seven villagers were killed by North Koreans sneaking across the porous border into Nanping, the latest in several such incidents over the past few years.

China's military presence is heavy, with khaki green four-wheel drive vehicles patrolling the highways and security cameras installed on border fences. Locals say defections by North Koreans are down amid tighter Chinese patrols.

However, recent flooding around Nanping has destroyed alarm systems installed by the local government to protect villagers against North Korean intruders and also much of the fencing separating the village from North Korea.

North Korea is clearly visible from Nanping - farmers using rudimentary plows, soldiers squatting by a simple outpost and antiquated trucks and buses sporadically rumbling by.

Timber and other materials come in by truck from North Korea to Nanping over a concrete bridge, say locals, who added that coal exports have stopped since China's outright ban in February, following the North's nuclear and intermediate-range ballistic missile tests.

Iron ore from Musan has also stopped coming in, said Li Zhonglin, Director of the College of Economics and Management at Yanbian University.

"Right now, all economic projects along the border have stalled because of rising tensions," he said.

(Additional reporting by Damir Sagolj and the Beijing Newsroom; Editing by Raju Gopalakrishnan)

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