China will close joint ventures (JVs) or cooperative and foreign entities established by North Korean organizations or individuals in China within 120 days of the adoption of Resolution 2375 of the UN Security Council, according to a statement on the website of the Ministry of Commerce (MOFCOM) Friday.
Overseas Chinese JVs and cooperative entities with North Korean entities and individuals will also be closed in line with the resolution but non-profit projects approved by the UN Security Council will be exempt.
North Korean companies’ income from operating in China constitutes a considerable part of Pyongyang’s foreign currency, which means closing these entities will greatly reduce its foreign exchange, Lü Chao, an expert on Korean studies at the Liaoning Academy of Social Sciences, told the Global Times.
He noted that it is unlikely to affect the Chinese economy much, given that North Korean investment is only a small portion of China’s restaurant sector.
On the other hand, Chinese enterprises have invested in North Korea’s bicycle and automobile industries.
“North Korea’s largest investment in China is the Chilbosan Hotel in Shenyang, Liaoning Province, and the major shareholder has already become a Chinese company,” he said. MOFCOM announced on September 23 bans on exports of gas condensate and liquefied natural gas to North Korea.
It also said it will ban the export of refined petroleum products from October 1.