Analysis Of Risks And Countermeasures Of Chinese Medium And Small Enterprises' Investment In North Korea

DPRK Problem is one of the hot spots of the current topics, but international attention is focused on the question of the political, military and diplomatic field, there is not enough attention on the economy of DPRK, and lesser concern on the environment and risk of investment.China is one of the countries that have the close tie with North Korea in the international society, and Chinese investment predominates over the foreign investment in North Korea. But there is a great deal of deference between the current situations and the anticipation of the Chinese enterprises operated in North Korea, and even worse, there is a large number of enterprises are in a dilemma. At the same time, many enterprises and individuals in China urge to invest in North Korea.This article is focused on the risks of investment in North Korea with the purpose of reminding of the invisible risks hiding behind the great opportunities in North Korea. I will analyze in very great detail the possible risks and the embodiment of the risks in every industry of medium and small enterprises investing in North Korea, also I will give the respective countermeasures on how to avoid the risks.This article will firstly introduce the natural, economic and the political situation with the feasibility and practical operation situation of Chinese enterprises'investment in North Korea. And then I will present the National Risks Report and Risk-Rating Situation of North Korea made by the well-known risk evaluation organization. So the investor can get a general idea of the risks in investing in North Korea.The core of this article is the summary and analysis of risks investing in North Korea including moral and juristic risk, risks on control of foreign people, policy risk, international political environment risk and infrastructure risks according to my own work experiences and the research about the operation situation of the investors in North Korea. Moral risk is the biggest risk confronted by the Chinese medium and small enterprises, and the juristic risk is the source of the moral risk, these two risks prior to the other risks causes the failure of investment in North Korea. The other risks also can bring many inconvenience and uncertainty even failure to the investors. And then, through the analysis of the actual operation and manifestation of risks during the operation process of the enterprise where I worked in North Korea to make it more clear and in-depth of risks investing in North Korea to the investor trying to make their investment in North Korea.The author proposed the policy to avoid the investment risks to the Chinese enterprise especially to the medium and small enterprises according to each risk: ideologically, we should adjust not to obey blindly, to recognize clearly the risks behind the opportunity and pay great attention to moral and juristic risks; in action, we should choose cooperator with credibility and strength cautiously and patiently with enough market exploration before investment. And through these policies, the investor can reduce the investment risk and avoid or decrease the losses in the investment.Though there are many researches about the economic and political situation in North Korea, research on investment risk is still the weak point. The author sincerely hopes that the investors can realize the risks behind the commercial opportunities and make a rational investment, also the author hopes to help the Chinese medium and small enterprises avoiding the risks in investing in North Korea and enhance the investment success rate in North Korea. And at last, the author also hopes that this article can enrich theoretical research in the field of the Korean economy, especially on the Korean investment environment and risks of research.