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China Warns of Risks from Investing in N. Korea
2011-11-03 Updated.
The Voice of America reports that China’s Ministry of Commerce advises Chinese companies to survey the business environment of North Korea and obtain sufficient related information before making a decision on whether to invest in the North.

The Chinese Commerce Ministry issued the warning in recently announced guidelines on investments in North Korea.

It cautioned Chinese businesses about a possible loss, noting a huge gap between the North Korean government’s official foreign exchange rate and the market rate in reality.

The ministry also asked Chinese firms to be watchful for risks, including a failure to retrieve foreign currencies, when signing contracts with North Korean subcontractors.

Regarding compensation for accidents, it also said that North Korean laws on who is responsible for paying damages are ambiguous.

Previously, the ministry had warned against risks from investing in North Korea on its Web site in May.