The Straits Times
www.straitstimes.com
Published on Sep 05, 2012
 

N. Korea launches rare attack on Chinese company

 
 

SEOUL (AFP) - North Korea on Wednesday launched a rare attack on a Chinese company which had denounced the communist state over a troubled joint venture deal.

It is highly unusual for North Korea to issue any criticism involving Beijing, the sole major ally and economic lifeline for the impoverished country which is a major recipient of Chinese food and fuel aid. But Pyongyang was apparently goaded into reacting after the Xiyang Group, a Chinese mining company, posted a statement on its website describing its "nightmare" experience investing in a joint venture iron ore facility in North Korea.

Xiyang said it had invested more than US$37 million (S$46.2 million) in the project, which was eventually suspended after what the Chinese company said were impossible demands by the Koreans for significant changes to the original contract. The statement was picked up by the Chinese and international media, including newspapers in South Korea.

North Korea hit back on Wednesday in a statement carried on the official Korean Central News Agency (KCNA), insisting that Xiyang was "chiefly" to blame for the project's collapse. "It has carried out only 50 per cent of its investment obligations though almost four years have past since the contract took effect," the North's Commission for Joint Venture and Investment said.