North Korea is set to remove inoperative foreign companies from a faltering special economic zone, officials said Tuesday, following a report that some Chinese firms have already been told to leave.
South Korea's unification ministry said the North in October conducted a probe into companies that exist only on paper but do not invest in the Rajin-Sonbong zone.
The zone was created in 1991 on the communist country's northeastern tip bordering Russia to attract foreign investment and build a logistics hub, but Seoul officials say it has largely failed.
"North Korea seems to have conducted the fact-finding probe in order to clear paper companies from the Rajin-Sonbong Special Economic Zone," ministry spokesman Kim Ho-Nyoun told a briefing, without elaborating.
Last week Dong-a Ilbo newspaper, citing Chinese traders in North Korea, reported that Pyongyang had ordered an unspecified number of Chinese businessmen to quit the zone by the end of November.
But it said the Chinese were still there since the North did not want to forcibly expel them. China is the North's major ally.
About 250 Chinese firms are registered as doing business in the zone, the paper added.
Officials said Rajin-Sonbong had not achieved its objectives. "The North failed to lure as much foreign investment as it hoped," a ministry official analysing North Korea's economy told AFP.
There is another special economic zone at Kaesong, just north of the heavily fortified border with South Korea.
The Seoul-financed estate uses the North's cheap labour to produce labour-intensive goods.
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