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Policy of Special Economic Zone and Legal System Issuesin South/North Korea and China

  • Public Land Law Review
  • Abbr : KPLLR
  • 2020, 91(), pp.227-265
  • Publisher : Korean Public Land Law Association
  • Research Area : Social Science > Law
  • Received : July 31, 2020
  • Accepted : August 21, 2020
  • Published : August 27, 2020

PARKSEUNGIL 1,  Wan, Yan Jiao 2

1동국대학교
2경희대학교

Accredited

ABSTRACT

In the modern sense, the Special Economic Zone is generally a region which is strategically set for the promotion of certain economic activities through implementation of reciprocal and preferential policy not applicable to other domestic regions in a nation. Recently, the Special Economic Zone has been conceptualized as comprehensive growth poles combined with trade, logistics, finance and technical innovation. In the situation that the trend of global economic growth has been slow down since the financial crisis of 2008, global competition for attracting investment has been escalating. Innovative and dynamic economic growth have been sought by providing better investment climate by nations or cities, attracting foreign investment (FDI), creating more jobs and developing industrial structure. In particular, the competitiveness among nations has been intensifying since globalization phenomenon increased, trade and customs barriers have dropped and the phenomenon of global value chain is generalized. North Korean leader Kim Jong-un prepares active promotion plan for development of Special Economic Zone. We can look at North Korea's strategy for promotion of Special Economic Zone in two ways. First, economic improvement strategy utilizing nation wide economic trade region and local one is refined and knocks on the door of global capital market for attracting investments. Second, for the expansion of foreign capital attraction, the systematic and legal measures, legal system applicable for foreign investment, has been arranged. This paper pays attention to North Korea's active policy for Special Economic Zone in the era of leader Kim Jong-un. North Korea has made its best effort in preparing legal environment for attraction of foreign capital and revitalization of Special Economic Zone by enacting and revising not less than 50 laws, regulations and system for foreign investment up to 2014 since the 'Joint Venture Act' in September, 1984. However, notwithstanding this effort, North Korea has failed to accomplish its expected performance. The first reason why North Korea's performance of attraction of foreign capital is poor even with its policy of Special Economic Zone is sanctions against North Korea due to North Korea nuclear problem. In addition, as for North Korea's leal system for development of its Special Economic Zone, its rules and limited legislation which are more vague to foreign capital investment than other socialism nations which have been successful through reform and opening works as another reason. Different from China and Vietnam, North Korea's legal system related to Special Economic Zone such as its constitutional law fails to clearly set forth its movement into market economy and faces the limit. Moreover, North Korea is still based on the legal system of socialism nation, while other socialism nations have been incorporated into capitalism international economic system and have promoted their legal system related to Special Economic Zone in the direction of compliance with international standard laws and regulations. A plan for legal system improvement of Special Economic Zone in North Korea is the major task during and after the process of unification of South and North Korea. North Korea's legal improvement for Special Economic Zone has significant impact on development of unified Korea even at the aspect of social unification as well as economic aspect. In other words, there is two sides in reorganization of Special Economic Zone. First, the land is important factor in vitalizing economics in the regions of North Korea as available production factor. Second, the land works as an obstructive factor in unification of South and North Korea. Accordingly, for actual unification of Korean Peninsula, we needs a law on unification Special Economic Zone. Through this law, important means for economy revitalization will be prepared not to mention of minimization of confusion and agony which may appear in transition period of unification. It is more likely that the arrangement of North Korea's legal system for Special Economic Zone will emerge as the most essential factor while North Korea goes toward market economy system from socialism system. As seen in the examples of socialism nations, the economic development through the policy and development of Special Economic Zone will allow North Korea to continue to make movement toward reform, opening and market economy. There is not far from the peace and prosperity in the Korean Peninsular if North Korea goes toward its reform and opening through arrangement of legal system for Special Economic Zone.

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