Business
Investors ride wave of optimism in Chinese city bordering North Korea
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Ties between North Korea and the US continue to warm after the historic summit in Singapore. Across its border with China, optimism about the opening up of North Korea is fuelling a rush for property in the Chinese city of Dandong. Olivia Siong reports.
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By Olivia Siong @OliviaSiongCNA
27 Jun 2018 11:03PM (Updated: 28 Jun 2018 12:57AM)
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DANDONG, Liaoning: Half-fish, half-lion - there is no mistaking the iconic Merlion nestled amidst the towering residential blocks. Nothing unusual, except this particular one stands some 4,000km away from Singapore in the Chinese city of Dandong.
The border town has borne the brunt of economic and trade sanctions imposed on North Korea, which lies just across a narrow river. But following the easing of tensions on the Korean Peninsula, investors have swooped in, hoping to make an early kill - particularly in the city's new district.
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That is where the Merlion and Singapore City - a massive residential and commercial project, which was launched in 2009 - is located.
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A view inside Singapore City. (Photo: Olivia Siong)
Initial sales were brisk then, but interest swiftly took a nosedive following North Korea's repeated nuclear tests and missile launches - until this year, as North Korea emerges from its self-imposed isolation.
Brothers Holdings, the project's Singaporean developer, said sales have skyrocketed in just a few months - from less than 10 units sold in the first quarter of this year, to 550 units in May alone.
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Interest is also expected to remain high as investors anticipate the gradual opening up of North Korea.
"After the Trump-Kim Summit, there will definitely be a lot more businessmen, investors and residents, who want to choose better real estate to stay in," said Mr TC Koh, group managing director of Brothers Holdings.
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Sales of homes at Singapore City have skyrocketed. (Photo: Olivia Siong)
He adds that tweaks will be made to the development's fourth and final phase to take this into account.
"We will change this phase from having four to six blocks. We also hope to build two hotels in the commercial area, with one facing the Yalu River," explained Mr Koh. "If the North Korea situation becomes better, Dandong could enjoy a similar relationship as Hong Kong and Shenzhen."
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A boat carrying North Koreans sails down the Yalu River. (Photo: Olivia Siong)
Being the largest Chinese city bordering North Korea, Dandong's fortunes have long been hinged to those of its reclusive neighbour.
As investors jump on the current positive sentiment, reports say that home prices have risen by more than 30 per cent this year, prompting the city government to impose sales and mortgage restrictions.
While residents and investors hope this will inject more vibrancy into the new district, they are also anticipating this would open up a new market in North Korea for them.
A new bridge connecting the new district in Dandong with the North Korean city of Sinuiju had been built during an earlier age of optimism.
But it remains idle long after it was due to open in 2015 and on the North Korean side, it still ends abruptly in farmland, with no onward connections.
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The idle new bridge connecting Dandong with North Korea. (Photo: Olivia Siong)
Residents are hoping that this time it will be different.
“It does feel like it’s taken a bit long but I think there’s hope," said 53-year-old Mr Feng Zhongbo, who lives in the new district and has bought a shop in hopes of doing border trade with the North.
"After all, North Korea on the economic front still needs to be pulled by a big market like China ... Since the bridge has been built, it will certainly open, it’s just a matter of time.”
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Mr Feng Zhongbo and his wife - residents of Dandong’s new district. (Photo: Olivia Siong)
But some experts cautioned against the unbridled optimism. They said that even if North Korea does open up, it has a long way to go before it's ready for business.
“With the absence of reliable laws and regulations, the foreign investment may not be secure," said Associate Professor Cheng Xiaohe, an expert in North Korean issues from Renmin University.
"There are also some other things they have to keep in mind. For example, the infrastructure in North Korea is absolutely backward and outdated and if you invest in that country you may find your company suffers a shortage of electricity and water and some areas you cannot access because of the lack of transportation vehicles. So the opportunities co-exist with the risks."
However, it seems for now that investors are willing to ride the early wave of optimism in the hope for a better future.
Hope, that as history has shown, can also quickly turn to disappointment when it comes to North Korea.
Read more at
https://www.channelnewsasia.com/new...tors-optimism-in-chinese-border-city-10476512