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Samsung heir faces high price for cold noodles in Pyongyang

South Korean leader wants conglomerate to lead investments in the North

Samsung Electronics Vice Chairman Lee Jae-yong, second from right, enjoys a lunch of cold noodles with South Korean business leaders and North Korean officials at a restaurant in Pyongyang on Wednesday. (Pyongyang Press Corps.)

SEOUL -- As Lee Jae-yong tucked into a lunch of sweet-and-sour cold noodles in Pyongyang on Wednesday, all eyes were on him. The vice chairman of Samsung Electronics is under the spotlight as the key companion to President Moon Jae-in on his third summit with North Korean leader Kim Jong Un.

Lee is part of a 200-member South Korean delegation Moon brought on his three-day visit to the North Korean capital that ends on Thursday. But the 50-year-old may have bitten off more than he could chew.

The price of the classic North Korean dish of buckwheat noodles with egg and beef? Samsung's commitment to North Korea's development.

Sources close to Samsung said Lee is under pressure from the Moon government to present a large-scale investment plan in North Korea after he returns to Seoul, a prospect the business leader is said to be unsure of.

"Samsung is under pressure to show something big after Lee's return from Pyongyang. That's what the government expects from the company and why it brought the vice chairman to North Korea," said a source familiar with the matter who did not want to be named. "It should be a blueprint for investments in North Korea, even though it will not be realized soon."

Lee's invitation as a key delegate was fraught with controversy as the presidential Blue House came under fire for seeming to favor him. The Samsung heir is, after all, awaiting a final ruling from the Supreme Court over corruption charges. He was set free from prison earlier this year after the Seoul High Court suspended his two-and-a-half year jail term for bribery and embezzlement.

Cold noodles are a traditional Korean dish.

Moon, on the other hand, had upheld anti-corruption as one of his key government policies. He had swept into power in May 2017 on promises of rooting out entrenched corruption and cronyism in South Korea's political system. Keeping Lee close to him during this trip may not sit well with voters.

Before the summit, Samsung had been careful in vocalizing any support for the South's plans for economic development in the North, only saying that it was monitoring events. Despite its reticence, Samsung isn't new to North Korea. It assembled its televisions in Pyongyang for a decade from 2000 but was forced to withdraw from the country after the North allegedly sank a South Korean warship, killing 46 servicemen.

Wednesday's lunch took place an hour after the two Koreas agreed to push for joint economic projects. Several carrots were also dangled by the North. As soon as "conditions are met," the Kaesong Industrial Park in the North will be reopened and South Koreans will be allowed to tour Mount Kumgang. Until 2016, South Korea had collaborated in operating the industrial park.

Mount Kumgang had been open to South Korean and other tourists from 1998. But after a South Korean tourist was killed by a North Korean soldier in 2008, South Koreans were no longer allowed to tour the area.

Also in the plans are a launch ceremony, agreed by the two leaders, to be held before the end of the year for a project to link the countries' railways and roads along the eastern and western coast. The agreement to link transportation lines was forged when the two men met in April.

In addition, Seoul and Pyongyang will discuss setting up two joint economic zones -- a fish market in the Yellow Sea and a tourism complex on the east coast.

Unlike Samsung, other South Korean conglomerates see North Korea as their new El Dorado, and are keen to seize business opportunities ahead of their rivals from China, Japan and the U.S.

Lotte Group and KT Corp. have launched internal groups to focus on projects in North Korea. Lotte is interested in developing resorts and hotels in the North while KT wants to set up telecommunications infrastructure there.

"We have experience in setting up telecom infrastructure in the Kaesoong Industrial Complex. We are ready to do so in the other regions of North Korea," said a KT executive who also did not want to be named.

But analysts sounded a word of caution. Even though the inter-Korean Pyongyang summit has reduced military tensions on the peninsula considerably and there is much optimism over the budding relationship between the two sides, North Korea is still subject to international sanctions that could be held in place for some time yet.

The U.S. would want to keep North Korea in check until it sees more substantial action toward denuclearization, but Kim has said he won't budge in that direction until Washington declares an end to the Korean War.

"Both North and South Korea have agreed to further measures to promote peace and eliminate confrontation, providing concrete steps toward denuclearization," said Christian de Guzman, a vice president at Moody's. "However, a permanent peace settlement remains unlikely in the foreseeable future, in the context of uncertainties in the bilateral relations between the United States and North Korea."

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