BEIJING (CHINA DAILY/ASIA NEWS NETWORK) - On Saturday (Dec 23), North Korea released its decision to build the "Kangnam Economic Development Zone" in Pyongyang, where foreign investors will be offered preferential land and tax policies.
The construction of an economic development zone to attract foreign investment might be Pyongyang's way of signalling it wants to help restore peace on the volatile Korean Peninsula.
This should be seen as a welcome move, as in recent times tensions have risen sky-high on the peninsula, raising fears of even a nuclear war either due to North Korea's nuclear and missile tests or owing to the joint military drills of the United States and South Korea.
The peninsula has been caught in a vicious circle of the United Nations (and the US and some other countries) imposing stricter sanctions on North Korea as punishments for its continued nuclear and missile tests, and Pyongyang responding by conducting more such tests, apparently to thwart a military attack from the US.
A day before the North's announcement of its economic development zone, the UN Security Council unanimously passed a resolution to impose tighter sanctions on North Korea, which would reduce its exports and imports to the barest minimum and could cripple its economy.
But the resolution also reiterates that greater efforts should be made to prevent war, by intensifying talks to reduce tensions on the peninsula.
Since the international community wants a peaceful resolution to the crisis, it should regard Pyongyang's announcement to build an economic development zone as a positive gesture aimed at restoring peace on the peninsula.
It is also important that the international community sees North Korean leader Kim Jong Un's emphasis on the economic zone being part of Pyongyang's parallel goals of achieving economic and nuclear development as an attempt to enhance unity at home.
Because of the tightening sanctions, North Korea is facing a severe economic slowdown.
And if the North Korea's Korean Central News Agency said on Monday that the world has seen the rising power of the country, implying Pyongyang had become a nuclear power, it has also highlighted the importance of the economic development zone, saying it would strengthen North Korea's economy.
But the development of the economic zone will be anything but smooth.
UN Resolution 2397 caps the exports of refined petroleum products and crude oil to North Korea at 500,000 barrels and 4 million barrels a year, respectively. The resolution also imposes caps on the exports of food and agricultural products, machinery, electrical equipment, wood and vessels to North Korea.
Pyongyang plans to attract foreign companies engaged in the industrial, agricultural, high-tech and tourism sectors to participate in the economic development zone, but given the strict trade limitations imposed by the UN, it is difficult for North Korea to realise that goal.
The "Kangnam Economic Development Zone", however, is located in an area that has great potential, as its natural conditions are suitable for producing agricultural products and it has easy access to North Korea's largest steelworks, road network and largest port, which connects Pyongyang with the ports in other East Asian countries, including China and South Korea.
If Pyongyang takes serious measures to improve its relations with the international community, and succeeds in its efforts, it can turn the "Kangnam Economic Development Zone" into a strong engine for the economic growth of not only North Korea but also Northeast Asia as a whole.
But as of now, the prospects do not appear promising.
The author is a researcher at the Northeast Asia Studies Institute at Jilin Academy of Social Sciences. China Daily is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media entities.