The Greater Tumen Initiative Investment Guide 2009
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The Greater Tumen Initiative Investment Guide 2009 CHINA DPRK MONGOLIA ROK RUSSIA ASIA BRIEFING The Greater Tumen Initiative Investment Guide 2009 CONTENTS 1. Introduction to the GTI Programme ..........................................................................5 2. North-East Asian Economic Overview ........................................................................7 3. Country Focus .................................................................................................................9 CHINA ......................................................................9 REPUBLIC OF KOREA ................................ 31 i. Economic Overview xxii. Economic Overview ii. Mineral Resources xxiii. Mineral Resource iii. Infrastructure xxiv. Infrastructure iv. Industries and Agriculture xxv. Industries and Agriculture v. Trade Partners xxvi. Trade Partners vi. Foreign Direct Investment xxvii. Foreign Direct Investment vii. Looking Forward xxviii. Looking Forward viii. Region Focus on Heilongjiang, xxix. Region Focus on Sokcho, Jilin, Liaoning Provinces and Inner Busan and Ulsan Mongolia Autonomous Region DEMOCRATIC PEOPLE’S REPUBLIC RUSSIAN FEDERATION ............................. 40 OF KOREA .......................................................... 19 xxx. Overview ix. Economic Overview xxxi. Mineral Resources x. Mineral Resources xxxii. Infrastructure xi. Infrastructure xxxiii. Industries and Agriculture xii. Industries and Agriculture xxxiv. Trade Partners xiii. Trade Partners xxxv. Foreign Direct Investment xiv. Foreign Direct Investment xxxvi. Looking Forward xxxvii. Region Focus on Primorsky Krai MONGOLIA ....................................................... 24 xv. Economic Overview xvi. Mining and Mineral Resources xvii. Infrastructure xviii. Industries and Agriculture xix. Trade Partners xx. Foreign Direct Investment xxi. Looking Forward Annex 1: Trade Development of North-East Asian Countries ...................................51 4 | Greater Tumen Area Investment Guide 1. Introduction to the Greater Tumen Initiative (GTI) he Greater Tumen Initiative (GTI) People’s of Korea; the Eastern Provinces of (originally known as the Tumen River Mongolia; the Eastern port cities of Republic of Area Development Programme - Korea and the Primosky Territory in the Russian TTRADP), is an intergovernmental cooperation Federation. mechanism in North-East Asia, supported by This region possesses enormous potential for the United Nations Development Programme investment and job opportunities with its skilled, (UNDP), with a membership of five countries: educated and low-cost labor pool. The Tumen People’s Republic of China, Democratic People’s River ties this region together at the crossroads of Republic of Korea, Republic of Korea, Mongolia vital trade, transport and energy routes. Rich in and Russian Federation. gas, oil and minerals, the Greater Tumen Region Since its creation, GTI has remained a unique has easy access to affluent markets in the GTI intergovernmental platform for economic five member countries and Japan, representing cooperation, fostering peace, stability and over 500 million consumers. The huge economic sustainable development in North-East Asia. potential of the Tumen River region can only be Moreover, it is playing a significant role in fully harnessed through dynamic cooperation expanding policy dialogues and strengthening among its neighbours and sharing of resources. business-friendly environments in the region The core decision-making institution of GTI and contributing therefore to the raising of living is the Consultative Commission composed of standards through development of interregional government representatives from all five GTI infrastructure and the promotion of trade and member countries. The role of the Consultative investments. Commission is to foster support for the development of North-East Asia and the Tumen RUSSIAN FEDERATION River Economic Development Area in particular. Moreover, it promotes mutual understanding as well as economic, environmental and technical cooperation among the peoples and countries of RUSSIAN the Greater Tumen Region. FEDERATION MONGOLIA At the 8th Meeting of the GTI’ Consultative P.R.CHINA Commission held in Changchun, China, in DPRK September 2005, Governments agreed to extend ROK the 1995 agreements for a period of 10 years and adopted the Changchun Agreements in Map of Greater Tumen Region which member countries committed to take North-East Asia is the vast geographic ensemble full ownership of the Greater Tumen Initiative that stretches from Mongolia in the West to the through increased contribution of financial and Pacific coasts of Russia and the Korean Peninsula human resources, with the continuous support of in the East and encompasses North-East China. UNDP. The meeting also agreed on a Strategic The geographical coverage of the Greater Tumen Action Plan 2006 – 2015, focusing GTI activities Initiative itself involves the three North-East on four priority sectors: transport, energy, tourism provinces (Jilin, Heilongjiang, & Liaoning) and and investment with environment as a cross- Inner Mongolia of China; the Rajin-Sonbong cutting theme. Economic and Trade Zone of the Democratic The 9th meeting of the GTI Consultative Greater Tumen Area Investment Guide | 5 Commission, the North-East Asia Partnership the BAC held its second meeting in Shanghai, Forum and an Investment Forum were successfully China on 24th March 2008 and concluded with held in November 2007 in Vladivostok, Russia. a strategy for scaling up activities and increased These meetings have laid solid foundation for partnerships in order to further promote accelerated cooperation between the 5 GTI the potential of the region to the business member states in the region and concluded community. with a reaffirmed commitment on the part The 10th meeting of the Consultative of governments and business representatives Commission is planned to take place in Ulan to expand regional cooperation for economic Bator, Mongolia on 24-25 March 2009 together growth and sustainable development in North- with an Investment Forum and 3rd BAC East Asia. meeting. The intergovernmental meeting proved to be a turning-point in the intergovernmental For more information, visit the GTI website cooperation in North-East Asia marked by a shift at www.tumenprogramme.org or contact the away from institutional and research activities to a Tumen Secretariat and its Director Dr. Nataliya new and more pragmatic approach of cooperation Yacheistova at [email protected] or focusing on development. During a special session by phone at +86 10 6532 6871. of the 9th CC meeting which was devoted to joint GTI projects, a number of concrete projects were earmarked by the member countries as “GTI projects”. The implementation of these projects will support economic development of the region in different sectors of the economy including improving transport infrastructure, addressing environmental challenges and ensure capacity building in the member countries. Another key outcome of this meeting is the creation of the Business Advisory Council (BAC), with the strong support of the UN Office for Partnerships. This institution serves as a concrete private-public partnership mechanism to promote economic cooperation and attract investment in the region and consists of senior business leaders and eminent persons from the participating countries as well as foreign investors. Other institutional structures that will strengthen regional cooperation in the priority sectors of GTI were agreed on: the Energy Board, a Tourism Council and a Cooperation framework mechanism on environment. The North-East Asia Partnership Forum and Investment Forum held back-to-back with the 9th CC meeting brought together more than 150 high-level representatives form GTI member states and other countries, confirming the high interest in North-East Asia and confidence in its potential for new investment opportunities. Following the decision taken in Vladivostok, 6 | Greater Tumen Area Investment Guide 2. North-East Asian Economic Overview aving taken a number of successful to be hardest hit. strides forward to benefit from world Over all long term prospects in Asia’s emerging trade, North-East Asian countries economies remain good thanks to the structural Hinevitably will feel similar shocks as those felt by reform that has been evident in the last decade the developed world due to the current financial as well as better macro-economic policies. Real crisis. South Korean exports fell by 17 percent GDP growth in 2009 is expected to slow to 6.7 in 2008 in the wake of the global financial crisis percent in 2009 from 8.5 percent in 2008 and and even China’s have shrunk. Growth prospects 10.5 percent in 2007. have declined in line with global contractions The extent of the contraction in developed and although they appear bleak when relating to markets, it appears now, could last longer than recent highs they are healthy in comparison to previously expected. This could have ripple effect scenarios faced in the developed world. and postpone the recovery of Asian markets. Access to cheap capital and high international However, the ability Asian countries have to consumer demand have been the key drivers shift external to domestic demand, maintain behind investment in North-East Asian economies macroeconomic stability and shift exports to other in recent years. These two pillars no longer stand faster growing parts of the world will indeed be and as such a certain amount