Now China is upset because North Korea has defied their requests and tested a so-called nuclear weapon underground. Japan has already applied trade sanctions on North Korea and has no other options in that arena. The United States has some options such as a Naval Blockage, but that would only hurt the people of North Korea who live under that dictator.

China is all about business and trade and is not so particular with who it sells too; example being Iran, which sponsors international terrorism. Will China actually do sanctions on North Korea or does it just like talk tough? Will China flex its military muscle and take over North Korea, it could use some extra growing room. North Korea has significant assets and that is some nice real estate? No one is going to help North Korea and it would be a slam-dunk for China.

Either way a conflict may not be likely and sanctions will not work and if North Korea insists on manufacturing nuclear weapons and exporting them as an Industry then the whole world has a problem. It is well-known that Iran has already met with North Korea and it is quite possible that they could be North Korea’s first customer if North Korea has made nuclear weapons.

Visiting a coal mine outside Pyongyang, the group was surprised by the welcome from North Korean officials and found that the basic road and power infrastructure serving the mine site was in a better condition than they expected. Chia said the mining company – which he declined to identify for commercial reasons – is likely to soon enter a joint venture with the North Korean operator to further develop the mine.

Since being granted the right to open an office in Pyongyang last October, Chia, who is from Singapore, says his firm has been approached by about 20 companies from Europe, Southeast Asia and Australia with an interest in investing in communist North Korea’s shaky economy. Chia’s firm was the first wholly owned foreign legal practice in North Korea.

“I think there is an upsurge of interest in that country,” said Chia, who is based in Singapore but runs an office of two lawyers in the North Korean capital and has plans to expand.

Chia’s recent experience mirrors that of other hardy business people who have persisted with North Korea in the past decade, despite a nuclear crisis and U.S. commercial embargoes. Some business people equate the current level of investor interest with the early 1990s, when foreign companies, including some multinationals, started a spate of investments in the hope that North Korea’s largely self-imposed isolation would end.

While the latest round of six-nation talks to dismantle North Korea’s nuclear weapons program remains inconclusive, a handful of Asian and Western investors, some with earlier experience in doing business there, are again considering possibilities in defiance of Washington’s desire to use economic seclusion as a bargaining tool.

These investors, mainly manufacturers and miners, are being enticed back by low wages, plentiful mineral resources and a regime that appears increasingly prepared to support foreign investment and open its economy.

Pyongyang has signaled plans to open investment promotion offices within its embassies in Singapore and Malaysia, according to Chia, who maintains regular contact with North Korean officials. A revised foreign investment law, passed by the North Korean Supreme People’s Assembly in 2004, relaxed some conditions on foreign investment and permitted full foreign ownership of some ventures. The assembly has also strengthened intellectual property rights laws.

A South Korean government official said that Pyongyang also recently started to approve visas for foreign buyers to enter the joint North-South industrial park at Gaeseong, just north of the demilitarized zone. The official said 19 visas had been approved as of mid-July for buyers from Germany, Japan, China and Australia.

Investment in Gaeseong is restricted to South Korean companies.

Tony Michell, a business consultant based in Seoul, has received permission to take a group of eight investors to North Korea in September in the first of what he said would be monthly investment missions. The first group will comprise European and Asian business people, none of whom are from China or South Korea, the countries with the largest investment in the North.

Michell, who introduced a number of companies to North Korea during the last upswing in investment interest from 1993 to 1995, said there had recently been “a revival of interest.”

“This comes up to the 1993 level of interest,” said Michell, managing director for Asia of the Euro-Asian Business Consultancy, adding that if the United States dropped its economic embargo “this would be a humdinger of an emerging market.”

Still, potential investors in North Korea have to weigh a long history of failure. Of the eight companies Michell introduced during the early 1990s, only one investment survives. An investment bank based in Hong Kong, Peregrine, entered a joint venture to establish Daedong Credit Bank in Pyongyang. Peregrine collapsed, but Daedong is marking a decade in business.

The experience of North East Asia Telecom, a Thai firm, is sobering.It set up a mobile phone network, but since May 2004 use of mobile phones has been suspended by the North Korean government as part of a security crackdown.

New investment largely dried up after October 2002 when U.S. officials claimed that North Korean officials had admitted during talks to possessing a nuclear weapons program. There is general agreement among investment advisers and economic analysts that if the nuclear impasse can be resolved foreign investment will accelerate.

The nuclear crisis erupted as North Korea was implementing a series of measures to open its economy and increase appeal to investors, like giving state-owned enterprises greater freedom to operate commercially, removing price controls and allowing its currency, the won, to be exchanged for the euro, which was adopted in December 2002 for all foreign currency transactions.Analysts of the North Korean economy say those reforms remain largely on track and paved the way for an upsurge of direct investment in 2004 from China, North Korea’s main economic partner. Ahn Ye Hong, who studies the North Korean economy for the Bank of Korea, the South Korean central bank, said that investment from China rose from $1.3 million in 2003 to $173 million in 2004.

He said this investment was driven by China’s desire to “obtain as much of North Korea’s resources as it can,” particularly iron ore. He expects a further significant increase in Chinese investment this year.

The South Korean government is also seeking to increase direct investment in the North. Although the bulk of South Korean investment has gone into just two projects, Gaeseong and the Mount Geumgang tourism development, recent talks between the two Koreas explored the possibility of investment in upgrading or repairing mines that have fallen into disuse.

An official in South Korea’s Ministry of Unification said an inter-Korean economic cooperation meeting in Pyongyang between Sept. 28 and Oct. 1 would discuss the proposal further. The official, who requested anonymity due to restrictions on speaking publicly, said it was likely any South Korean involvement in redevelopment of the mines would be carried out by a joint enterprise between the government and the private sector.

North Korea possesses extensive economic resources with which to build a modern economy. These include sizable deposits of coal, other minerals, and nonferrous metals. The river systems of the Yalu, Tumen, and Taedong, and lesser rivers supplement North Korea’s coal reserves and form an abundant source of power. Although the mountainous terrain prohibits paddy rice cultivation except in the coastal lowlands, corn, wheat, and soybeans grow well on dry field plateaus. The country’s hilly areas also provide for timber forests, livestock grazing, and orchards.

North Korea inherited the basic infrastructure of a modern economy at the end of the Japanese colonial era (1910-45) and achieved considerable success in spite of the of the socialist government’s restrictive controls of labor, capital, and rates of consumption. These controls had a cumulative effect, and by the beginning of the 1960s, the economy had reached a stage where delays and bottlenecks began to grow. Slow economic growth continued into the 1970s and 1980s. Based on Juche, the self-reliant economic policy emphasizes heavy industry. This policy, coupled with economic difficulties, has resulted in a poor record of exports, chronic trade deficits, and a sizable external debt, as well as foreign trade primarily oriented toward other communist countries. At the outset of the 1990s, North Korea’s economy was in a deep slump and in great disarray, and was significantly behind its neighbour, the Republic of Korea (South Korea), which has become a world-class economic powerhouse.

North Korea’s economy remains one of the world’s last centrally planned systems. The role of market allocation is sharply limited – mainly in the rural sector where peasants sell produce from small private plots. There are almost no small businesses. Although there have been scattered and limited attempts at decentralization, as of mid-1993, P’yongyang’s basic adherence to a rigid centrally planned economy continues, as does its reliance on fundamentally non-pecuniary incentives. As the country faced the 2000′s, more famines came, although South Korea aided the country with fertilizer and livestock shipments. In addition, the nuclear weapons program in 2006 created sanctions against the country. The collapse of socialist governments around the world in 1991, particularly North Korea’s principal benefactor, the Soviet Union, have forced the already depressed North Korean economy to fundamentally realign its foreign economic relations. Economic exchanges with South Korea have even begun in earnest. A recent attempt at creating Chinese-style economic zones is representative of North Korea’s current movement towards capitalism.

About 81% of North Korea’s terrain consists of high mountain ranges and partially forested mountains and hills separated by deep, narrow valleys and small, cultivated plains. The most rugged areas are the north and east coasts. Good harbours are found on the eastern coast. Pyongyang, the capital, near the country’s west coast, is located on the Taedong River.

Although most North Korean citizens live in cities and work in factories, agriculture remains a rather high 25% of total GNP, although output has not recovered to the levels of the early 1990s. While trade with the South has expanded since 1988, no physical links between the two remain, and the infrastructure of the North is generally poor and outdated.

North Korea suffers from chronic food shortages, brought about by the combined effects of a reclusive regime, successive natural disasters, structural constraints — such as little arable land and a short growing season — as well as the fact that food products are deliberately diverted away from citizens and into the military. These shortages were exacerbated by record floods in the summer of 1995 and continued shortages of fertilizer and parts. In response to international appeals, the US provided 500,000 tons of humanitarian food aid in the period July 1999-June 2000 through the UN World Food Programme and through US private voluntary organizations.