- Associated Press - Tuesday, August 21, 2012

RASON, North Korea — Fleets of shiny minivans, Chinese-made bulldozers and dump trucks festooned with red ribbons fill the plaza, while toys, clothes and even probiotics digestive capsules are on display inside an exhibition hall.

Walking past the booths and examining the goods are Chinese, North Koreans and even some Europeans, who are exchanging business cards and sharing lively conversations.

North Korea once again is hosting an international trade fair, which opened Monday in Rason in the far northeast, a city seeking to sell itself as friendly to foreigners and a potential hub for international transportation, trade and tourism.

It’s a scene not common in the rest of North Korea, where most business is state-run and interaction between foreigners and locals is strictly monitored.

The trade fair is an indication of how keen the insular nation is to attract foreign investment needed to reform its listless economy.

Pyongyang, the North Korean capital, has not publicly released detailed economic data for decades, but has made building the economy a focus of government policy since 2009.

Rason, however, is one of North Korea’s newly revamped special economic zones, governed by a separate set of laws and rules giving local officials more autonomy, and easier to access from the Chinese city of Yanji than from Pyongyang.

With its economy languishing in sharp contrast to the booming market economies of its neighbors in Northeast Asia, Pyongyang has turned in recent years to China to provide trade, investment and knowhow in exchange for access to its minerals and labor.

Last week, Jang Song-thaek, uncle of North Korea’s young leader, forged deals with China on accelerating joint development of North Korea’s special economic zones, including Rason and Hwanggumphyong Island, according to China’s Ministry of Commerce.

“The timing [of Mr. Jang’s visit] has got to be to try to make Chinese investors who are coming or thinking of coming [to Rason] feel more comfortable about the agreements they are about to or are considering signing,” said Andray Abrahamian, executive director of Choson Exchange, a Singapore-based nonprofit group that provides business and legal training for North Korean government officials and students.

Doing business in North Korea, even as Pyongyang seeks to draw in foreign investment, remains a challenge. Travel to North Korea is carefully regulated, with foreigners requiring invitation letters from North Korean agencies or joining sanctioned tour groups.

All interaction with locals is monitored. Use of personal cellphones, Internet access and transportation — basics for conducting business anywhere else in the world — require authorization.

Even with their own cellphones, foreigners often cannot phone their local staff due to restrictions governing communication between North Koreans and outsiders.

Rules in Rason were loosened to make it easier for foreign businesses to set up shop, particularly regarding visas and entry.

Still, though transport from China has improved, Rason officials must ensure steady electricity, broadband Internet, an international banking system and cellphone service for foreigners for foreign firms to operate, Mr. Abrahamian said.

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