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Battle for North Korea’s Resources

Sunday, November 22nd, 2009

Radio Free Asia
Song-wu Park
11/19/2009

North Korea is pulling back from Chinese mining investments in an effort to independently develop its industry and use the profits to create a self-reliant economy, according to a well-informed North Korean defector.

But analysts say it is unlikely that North Korea will be able to lock China out completely, because it lacks the infrastructure and capital needed to develop the country’s vast mineral resources.

The defector, who said he had worked as the director of a state trading agency controlled by the military in a major North Korean city, refuted South Korean news reports that suggested China was taking control of North Korea’s underground natural resources.

“Such statements are exaggerated and different from the truth,” the defector, who uses the pseudonym Kim Ju Song, said in an interview.

Kim attended closed-door sessions with U.S. legislators and congressional staff in Washington on Wednesday.

Several South Korean news organizations, including the Yonhap news agency, recently reported that China has increased its investment in North Korea, established firm control over North Korea’s underground natural resources, and plans to utilize North Korea as its “natural resource base.”

The reports said Beijing had laid out a U.S. $1.2 billion investment plan for North Korean mine development and that Chinese firms had bid for the long-term rights to mine anthracite, iron ore, and molybdenum deposits in the country.

But Kim Ju Song called the reports “distorted,” adding that the North Korean regime is averse to such investments because its current objective is to create a “self-reliant” economy.

“With its own style of self-reliant national economy as the foundation, North Korea hopes to develop and employ its own technologies to extract and process its underground natural resources, prior to selling them on the world markets,” Kim said.

“However, under the current circumstances, simply selling those natural resources at a bargain price would not earn North Korea that much money,” he said.

Kim said that while North Korea will sell China minerals that it is unable to exploit due to technological limitations, “it would be inconceivable for the North Korean regime to cede its mines to China.”

John Park, a senior research associate at the Washington-based United States Institute of Peace, said it is unlikely that North Korea will be able to effectively develop its mineral industry independent of China.

“It’s a chronic issue for the North Koreans to develop the transportation infrastructure that links up their mines,” Park said.

He added that much of North Korea suffers from shortages of the electricity required to develop profitable mines.

Park added that mining requires a “tremendous” amount of startup capital in order to purchase the equipment needed for mine development and mineral extraction.

“The Chinese state-owned enterprise model is so interesting is because of their government funding…These types of state-owned enterprise vehicles can actually sustain these early stage losses that private sector firms cannot,” Park said.

“From that functional capability standpoint the Chinese state-owned enterprise is one of the very, very few that can partner up [with North Korea],” he said.

Jennifer Lee, a researcher with the Peterson Institute for International Economics in Washington, said she doesn’t see North Korea “significantly” backing away from Chinese investment.

“But I can see why North Korea might want to lessen China’s near-monopoly state in that industry … with their Ju’che ideology and all,” Lee said, referring to the official state ideology of North Korea that roughly translates as “the spirit of self-reliance.”

Lee said she had heard reports that one of a group of North Korean delegates that visited New York last month was “eager to attract foreign investment other than from China.”

“I believe that they’re concerned that they are depending way too much on China alone,” she said.

But she acknowledged that North Korea lacks the infrastructure to refuse Chinese investment, particularly in light of international sanctions leveled against Pyongyang following testing of missiles and a nuclear weapon earlier this year.

Lee added that Beijing would be unwilling to allow North Korea to shrug off Chinese interests.

“They’re hungry for North Korean resources, especially because they can get [them] cheaper—being the only country with proper access to [North Korea],” she said.

‘Wary of Chinese influence’

Andrei Lankov, a Seoul-based North Korea expert who works as a commentator for RFA, said that while talks of a “Chinese takeover” are not unfounded, they may be exaggerated.

“North Korean leaders … certainly would not welcome an excessive growth of Chinese influence inside North Korea,” he said.

He called North Korea’s leaders “ethnic nationalists of a rather extreme kind” who dislike foreign influence over their domestic affairs.

“Some contacts are taking place and some agreements have been concluded,” Lankov said.

“North Korean feels ambivalent about these contacts—it needs Chinese money, but is wary of Chinese influence,” he said.

Park called Chinese premier Wen Jiabao’s October visit to the North Korean capital Pyongyang “the culmination of a Chinese process to rebuild the bilateral relationship” between the two countries, noting that Wen had presented a comprehensive package of suggested partnerships to North Korea’s leadership.

“But with all things related to North Korea, it’s up to North Korea if they want to accept it or what portions of it they want to accept,” Park said.

“North Korea does have a record of renegotiating, which has definitely scared off other foreign investors in the past,” he said.

Lee added that even if North Korea decides to lessen China’s impact on its mining industry, such a decision would not involve a significant break with its northern neighbor.

“It would probably go towards the diversification route, trying to attract other foreign investors and possibly replacing some of the Chinese investment in the long run.”

She said North Korea now thinks of its mining industry as a “cash cow” and is working towards making it more attractive to foreign investors through development and a crackdown on corruption.

Posted in China, Foreign direct investment, Military, Mining/Minerals | Comments Closed

In North Korea, the military now issues economic orders

Thursday, November 5th, 2009

Blane Harden wrote an excellent article for the Washington Post on the KPA takeover of state-owned trading companies and how these companies are increasing natural resource exports to China. (As an aside, China has just recently ceased publishing North Korean trade data). This is interesting because just a year-and-a-half ago we were discussing Jang Song-thaek’s anti-corruption campaign which was supposed to be closing down KPA companies and making them reapply for export licenses with the Ministry of Foreign Trade (meaning the WPK could start dipping into the revenue pools).

Quoting from Mr. Harden’s article:

The potential profits are eye-popping: China is one of the world’s most voracious consumers of raw materials, and North Korea’s mineral reserves are worth $5.94 trillion, according to an estimate by South Korea’s Ministry of Unification. China has been critical of North Korea’s nuclear program and missile tests, but it also has vastly increased its economic ties with Kim’s government.

Kim is increasingly creaming off a significant slice of Chinese mineral revenue to fund his nuclear program and to buy the loyalty of elites, according to “North Korea, Inc.,” a recent report by the United States Institute of Peace, a Washington-based group funded by the U.S. Congress.

The report echoes the views of North Korean analysts in South Korea, Japan and the United States, who say the military has elbowed out other ministries and the Korean Workers’ Party to take control of exports that earn hard currency. The military is also sending trucks to state farms to haul away as much as a quarter of the annual harvest for its soldiers, analysts say.

“The military is by far the largest, most capable and most efficient organization in North Korea, and Kim Jong Il is making maximum use of it,” said Lim Eul-chul of the Institute for Far Eastern Studies in Seoul.

North Korea is perhaps the world’s most secretive and repressive state, but it makes no attempt to hide the ubiquitous role the military plays in the daily lives of the country’s 23.5 million people. Soldiers dig clams and launch missiles, pick apples and build irrigation canals, market mushrooms and supervise the export of knockoff Nintendo games. They also guard the country’s 3,000 cooperative farms, and help themselves to scarce food in a hungry country.

…

Missile sales were for many years major earners of foreign currency, according to a report for the Strategic Studies Institute by Daniel A. Pinkston, who is now a Seoul-based analyst with the International Crisis Group. But the cost of the arms trade has gone up and sales have declined as a result of U.N. sanctions imposed after the North’s nuclear tests in 2006 and this year, South Korean analysts say.

The military has thus turned to its new Chinese cash cow. As the army has taken over management of mines in North Korea, mineral exports to China have soared, rising from $15 million in 2003 to $213 million last year. Led by those sales, the North’s total trade volume rose last year to its highest level since 1990, when a far more prosperous and less isolated North Korea was subsidized by the Soviet Union.

A unique advantage the Korean People’s Army brings to foreign trade is a well-disciplined workforce that has to be paid — nothing. Soldiers receive food, clothes and lodging, but virtually no cash. This competitive edge makes military-run trading companies especially attractive to the North’s leadership, according to the Institute of Peace report.

Based on confidential interviews with recent North Korean defectors, four of whom said they worked for trading companies run by the military, the paper concludes that a “designated percentage of all revenues generated from commercial activities . . . goes directly into Kim Jong Il’s personal accounts.” The rest of the revenue flows into the operating budget of the military.

The full article is worth reading here.

Additionally, the report by the Institute of Peace cited above, “North Korea, Inc.”, can be downloaded here. The paper is on my reading list this weekend, but here is the introduction and conclusion:

Introduction: Assessing regime stability in North Korea continues to be a major challenge for analysts. By examining how North Korea, Inc. — the web of state trading companies affiliated to the Korean Workers’ Party (KWP), the Korean People’s Army (KPA), and the Cabinet — operates, we can develop a new framework for gauging regime stability in North Korea. Insights into the Democratic People’s Republic of Korea (DPRK)1 regime can be gained by examining six core questions related to the DPRK state trading company system. First, what are DPRK state trading companies and how did they emerge? Second, how do DPRK state trading companies operate? Third, what roles do they play? Fourth, why are DPRK state trading companies important? Fifth, what major transformations are taking place in the DPRK state trading company system? Sixth, what are the implications of the manner in which this system is currently functioning?

Conclusion: Despite lingering problems with the fragmented Public Distribution System, the challenges of chronic food shortages, and a deteriorating economic infrastructure system, the DPRK regime has proven to be remarkably resilient. By operating North Korea, Inc. — a network of state trading companies affiliated to the KWP, the KPA, and the Cabinet — the regime is able to derive funds to maintain the loyalty of the North Korean elites and to provide a mechanism through which different branches of the North Korean state can generate funds for operating budgets. During periods when the DPRK’s international isolation deepens as a result of its brinkmanship activities, North Korea, Inc. constitutes an effective coping mechanism for the Kim Jong Il regime.

While North Korea remains an opaque country, we now have greater access to unique defectors with the following characteristics — prior experience working in DPRK state trading companies and current business dealings with former colleagues in North Korea through channels in China. By closely examining DPRK commercial activities and capabilities, a new field of North Korea analysis can be structured to produce insights into the internal dynamics of the DPRK regime. This new line of inquiry would help to broaden our understanding of an evolving North Korea.

Posted in Cabinet, China, International trade, Korean People's Army, Mining/Minerals, Worker's Party | Comments Closed

China obscures trade relationship wth DPRK

Monday, November 2nd, 2009

China has ceased publishing its balance of trade with North Korea. Since China is the DPRK’s largest trading partner, this story has significant implications for all those who study the DPRK.

According to Reuters:

China has stopped publicly issuing trade data about North Korea, veiling the potentially sensitive numbers about its wary neighbour under another category while the two countries seek improved ties.

Destination and origin statistics on China’s imports and exports for September issued on Monday gave no separate numbers for second straight month for the Democratic People’s Republic of Korea, the formal name of the North, as they have long appeared in the tables.

The trade tables for coal, crude oil, oil products and cereals issued by China’s General Administration of Customs instead used another category, “other Asia not elsewhere specified”, which for those commodities at least appeared to cover exclusively trade flows between China and the North.

Analysts and officials have used Chinese statistics to gauge otherwise opaque ties between the two communist neighbours. But North Korea has stopped appearing in the Chinese data since last month, when statistics for August also avoided mention of it.

The change may help Beijing to obscure shifts in economic flows with the North, which relies on China for most of its trade and aid.

In the build-up to North Korea’s first nuclear test in Oct. 2006, the trade data showed China cut crude oil shipments to the North in September, although it was unclear whether the stoppage was a calculated gesture or due to more prosaic problems.

An official in charge of data services at the Customs Administration told Reuters that the change would last, but would not say why. Reuters and other companies buy the data.

“We’re no longer issuing trade data about North Korea,” said the official, who declined to give her name. “We’re not allowed to issue the data anymore.”

She declined to answer further questions, referring them to another data services official.

That official, Xu Xianghui, said the data could not be released because of a “technical fault”. But Xu said it was unclear if that fault would ever be fixed.

This is a rather blunt statement by the unnamed Chinese official. There was not even an attempt to offer a justification. The decision to cease publishing the data obviously originated at the top of the Chinese leadership and the employees at the Chinese Customs Administration were probably told to relay (exactly) the simple message delivered above.

I wonder how long the Chinese officials at the top sat around trying to think of an acceptable public justification before just giving up. I am trying to think of one now but not having much luck.

Lets hope that his policy is eventually reversed.

UPDATE (quasi-related) from the Choson Ilbo:

When Chinese Premier Wen Jiabao’s visited Pyongyang in October, North Korea and China boasted they had opened a new era of cooperation. The two countries described their talks as “constructive” even though no palpable progress was made in the North’s nuclear issue. But according to a senior source in North Korea, one significant step was a secret agreement to restore intelligence cooperation.

No details have been disclosed, but it is presumed that this refers to cooperation between traditional intelligence agencies including North Korea’s External Liaison Department and Operational Department rather than in ferreting out and repatriating North Korean defectors. The source said the two sides put the agreement into writing to strengthen their defense against South Korea, the U.S. and Japan.

North Korea is said to have asked China to provide intelligence about North Korean defectors and anti-North Korean government activities in China, while China reportedly asked the North to cooperate on cracking down on drug trafficking and counterfeiting of dollars or yuan.

Read the full article here:
China hides North Korea trade in statistics
Reuters
Chris Buckley
10/26/2009

Posted in China, Statistics, Trade Statistics | 2 Comments »

China and DPRK mineral wealth

Tuesday, October 6th, 2009

According to the Financial Times:

North Korea’s mineral wealth is receiving close scrutiny, with South Korea’s government this week valuing reserves at $6,000bn (€4,070bn, £3,670bn). Encouraged by data on metals, Goldman Sachs last month predicted the economy of a unified Korea could rival Japan’s by 2050.

…

Trade with China is growing, reaching $2.8bn last year from about $2bn in 2007. But military authorities in North Korea are perceived as hostile to the changes in society and infrastructure that foreign investment could bring.

“If the North opens its mineral resources to foreign countries, that is tantamount to taking a military, social and political gamble, jeopardising their security,” said Lim Eul-chul, of Seoul’s Institute of Far Eastern Studies.

A South Korean diplomat closely involved with nuclear talks doubted Pyongyang would allow China to make big investments inside its border. “They cannot permit that kind of influence,” he said.

Although they were long communist allies, North Korea and China have a mutual mistrust, partly tied to territorial claims.

Still, limited foreign investment in the sector is not impossible. Colin McAskill, executive chairman of Koryo Asia, says he has signed a letter of intent and memorandum of understanding to invest in North Korean metals and argues his model would not interfere with sovereignty issues that concern Pyongyang.

Switzerland’s Quintermina has posted reports on its website saying it is looking to extract magnesite in North Korea.

Chinese investors are believed to have some metals interests and are also involved in coal mining.

“The Chinese companies that have tried to do business in North Korea complain a lot that the regulations change frequently and that the power supply is erratic,” said a Chinese academic in Beijing.

One quote in this article struck me as a little off:

A South Korean diplomat closely involved with nuclear talks doubted Pyongyang would allow China to make big investments inside its border. “They cannot permit that kind of influence,” he said.

First of all, China has already made plenty of investments inside the DPRK and the Chinese government and companies already exert influence. There is a difference between having influence and being in control. Secondly, China is the largest market for North Korean exports. Even though they might not “own” the North Korean assets from which they purchase the goods, the North Koreans are limited in terms of who will/can trade with them. In this sense China earns surplus through either bulk purchase discounts or monopsony power.

Read the full story here:
China eyes N Korea’s mineral wealth
Financial Times
Christian Oliver
10/6/2009

Posted in China, Coal, International trade, Mining/Minerals | Comments Closed

North Korea looks to southern China to attract tourists

Sunday, September 27th, 2009

By Michael Rank

North Korea is spreading its net wider in its quest to attract more tourists from China, and now has its eye on the southern province of Guangdong as well as Shanghai.

A Chinese website (link here) reports that a delegation of North Korean travel agents is expected to travel to Guangzhou next month and that local tour operators in Guangzhou and nearby Shenzhen, on the Hong Kong border, are eager to do business.

Tourists will have a choice of two routes to North Korea – they can either fly to Shenyang or Dalian in northeast China and then take the train to Pyongyang via Dandong, or they can fly to Pyongyang via Shenyang. It puts the price at 5,000 yuan ($730) but doesn’t say how many days the tours last or any further details. It says the main attractions will be the usual ones of Pyongyang, the DMZ at Panmunjom, the Myohyang mountains and the annual Arirang pageant.

As NKEW reported in July, North Korea is also targeting Shanghai as a source of tourism revenue, and there is further talk of charter flights from Qingdao in Shandong province to Pyongyang.

Quite apart from the question of how many Chinese are likely to be tempted to visit a Cultural Revolution-type theme park like North Korea, there are also bureaucratic hurdles to overcome. North Korea does not have “approved destination status” for Chinese tourists, which means in theory at least that travel there is restricted to business groups and official delegations. (Incidentally, South Korea doesn’t seem to be an ADS country either).

As the website notes, “An important issue within ADS is to avoid possible illegal immigration through tourism channels. All tourism groups travelling within the ADS framework are supposed to be monitored by both Chinese and foreign authorities to ensure they return to China. Embassies and consulates apply different methods to monitor the return of the Chinese tourists. Whenever a tourism group member does not return to China, the local travel agency is held responsible and sanctions are applied.” Not that there is much likelihood of Chinese tourists defecting to North Korea.

Furthermore, China is encouraging tourists to counter the world recession by spending their money at home, and although this is China-DPRK year marking the 60th anniversary of diplomatic relations, a further obstacle is the fact that Chinese citizens now need a passport to travel there, not just a border pass that was all that was needed previously to cross into the country at Dandong by train.

Nick Bonner of Koryo Tours says: “We have noticed a sharp drop in Chinese tourists visiting DPRK in comparison to this time last year – even though the spectacle of the 100,000 strong performance of the mass games is still going on and has been extended to October 15th.

“I think next year Chinese tourism will be coming back strong – there is a certain ‘busman’s holiday’ attraction for Chinese tourists to visit DPRK.”

Posted in China, Koryo Tours, Tourism | 2 Comments »

DPRK-China trade (Q1,Q2 2009)

Wednesday, September 23rd, 2009

According to Yonhap:

Trade volume during the January-June period totaled US$1.1 billion, down 3.7 percent from a year earlier and the first decline since 1999, the Korea Trade-Investment Promotion Agency (KOTRA) said in an emailed release that cited official Chinese data. The drop was in striking contrast with a 41 percent increase during the same period last year and a 16 percent gain in 2007.

North Korea was put under U.N. sanctions for its nuclear test in May, barring its weapons trade and strictly limiting cash flows into the country. The sanctions, however, do not appear to have affected North Korea’s trade with China, an official at South Korea’s Unification Ministry said.

Prices of crude oil, which account for a quarter of North Korean imports from China, subsided this year after steep hikes in 2007 and 2008, said Jeon Dong-myeong, a ministry official overseeing North Korean trade.

“It’s not a steep decline. The 3.7 percent decline in trade volume can arise from price differences,” Jeon said.

North Korean imports from China amounted to $750 million, down 8.4 percent, while exports increased by 8.2 percent to $352 million, according to KOTRA.

By item, North Korea’s crude oil imports showed the steepest decline of 54 percent, or $111 million.

Food imports slightly increased to $23 million, and fertilizer imports considerably grew to $11.9 million, close to the amount the North brought in during all of 2008, $12.7 million.

Despite the international sanctions on the country, North Korea’s trade with Germany gained by 46.53 million euros during the first half of this year, according to KOTRA. Citing Germany’s figures, it said trade volume was up 160 percent from the same period last year, and up 30 percent from the total trade volume the two countries registered for last year.

Read the full story here:
N. Korean trade with China falls slightly in first half of 2009
Yonhap
9/23/2009

Further information and requests:
1. Here is the PR of China’s Ministry of Commerce database where trade data is published (does not work well with Mozilla). The usual caveats apply.

2. I have given up on the KOTRA web page. Can someone please send me the KOTRA email mentioned in the Yonhap story?

3. Here are general stories about North Korea’s trading activities. Here are stories mentioning specific trade statistics.

Posted in China, International trade, Korea Trade-Investment Promotion Agency (KOTRA), Statistics, Trade Statistics | Comments Closed

UAE Seizes North Korean Weapons Shipment to Iran

Thursday, September 10th, 2009

UPDATE: According to Yonhap, Chinese and Australian ships were shipping the arms:

North Korean cargo carrying arms exports to Iran left a western port five days after Pyongyang’s nuclear test in May and was transferred aboard Chinese and Australian freighters before being seized by the United Arab Emirates (UAE) in July, according to an Italian company that handled the delivery.

Mario Carniglia, head of the international freight-forwarding firm Otim, said the containers, reportedly loaded with rocket launchers, detonators, and munitions, were shipped via the Chinese cities of Dalian and Shanghai and were transferred to an Australian vessel just after the U.N. Security Council adopted Resolution 1874 which bans the North from engaging in arms trade.

“(The containers) left the Nampo Port on May 30,” he said in a recent interview with Yonhap News Agency in Rome on Wednesday. A North Korean ship carrying the 10 containers arrived in Dalian two days later and a Chinese cargo ship moved them to Shanghai on June 13, he said.

“The containers were placed on (the Australian freighter) ANL-Australia in Shanghai,” he said, flipping through related documents.

The cargo was on its scheduled course until the UAE intercepted the ANL-Australia on July 22. The U.S. Navy had been focusing on trailing another North Korean vessel, the Kangnam 1, which appeared to be headed to Myanmar also carrying weapons exports.

The seizure was the first made under Resolution 1874 that calls upon all states to inspect cargo to and from North Korea if they have “information that provides reasonable grounds to believe the cargo contains” illicit weapons.

The Australian government said earlier, based on its own probe, that there were rocket-propelled grenades and other weapons in the seized containers, though Carniglia said his firm did not know the contents of the cargo.

He said North Korea provided documents identifying the content as “Oil Pumping Equipment.”

“We couldn’t see the contents as the containers were sealed when shipped from Nampo,” he said in the interview conducted in Italian. He refused to identify the exporter in North Korea, citing business ethics.

“All we were responsible for was handling the shipping from China to Iran,” Carniglia said.

He added that North Korea has not filed a complaint or asked for the return of the cargo, held at the UAE now for more than 50 days.

The UAE is reportedly in consultation with the U.N. sanctions committee on how to handle the seized shipment.

In a related move, the U.N. committee demanded an explanation from North Korea last month for the apparent arms export attempt.

The head of the North’s mission to the U.N., Sin Son-ho, sent a reply letter reiterating his country’s position that it is not bound by any U.N. resolution.

Sin also said that North Korea’s experimental uranium enrichment program is in a “completion phase,” claiming the country has made advancements in mastering an alternative route to producing nuclear weapons apart from its plutonium-based program.

ORIGINAL POST: According to Bloomberg:

The United Arab Emirates has seized a ship carrying North Korean-manufactured munitions, detonators, explosives and rocket-propelled grenades bound for Iran in violation of United Nations sanctions, diplomats said.

The UAE two weeks ago notified the UN Security Council of the seizure, according to the diplomats, who spoke on condition they aren’t named because the communication hasn’t been made public. They said the ship, owned by an Australian subsidiary of a French company and sailing under a Bahamian flag, was carrying 10 containers of arms disguised as oil equipment.

The council committee that monitors enforcement of UN sanctions against North Korea wrote letters to Iran and the government in Pyongyang asking for explanations of the violation, and one to the UAE expressing appreciation for the cooperation, the envoys said. No response has been received and the UAE has unloaded the cargo, they said.

…

he Security Council voted on June 12 to adopt a resolution that punishes North Korea for its recent nuclear-bomb test and missile launches through cargo inspections and enforcement of restrictions on financial transactions. The measure calls for the interdiction at seaports, airports or in international waters of any cargo suspected of containing arms or nuclear or missile-related materials going to or from North Korea.

According to the Wall Street Journal:

According to the Security Council diplomat, the weapons were carried on an Australian vessel, the ANL-Australia, which was flying under a Bahamian flag. According to an Aug. 14 letter sent to the U.N. sanctions committee, the exporting company was an Italian shipper, Otim, which exported the items from its Shanghai office.

“The cargo manifest said the shipment contained oil-boring machines, but then you opened it up and there were these items,” the diplomat said. ANL and Otim officials couldn’t immediately be reached to comment.

…

A spokeswoman for the Australian Department of Foreign Affairs and Trade said the Australian government is aware of the incident and is investigating to determine whether any Australian laws may have been broken.

The seizure could also raise fresh questions about North Korea’s intentions. After taking an aggressive stance against the West earlier this year, Pyongyang appears to have softened its rhetoric, releasing two captive American journalists and sending a delegation to meet with South Korea’s president.

Read more here:
UAE Seizes North Korean Weapons Shipment to Iran
Bloomberg
Bill Varner
8/28/2009

Cargo of North Korea Matériel Is Seized en Route to Iran
Wall Street Journal
Peter Spiegel and Chip Cummins
8/29/2009

Posted in Australia, China, International trade, Iran, Military, Sea shipping, Transportation | 1 Comment »

Chinese police report finding bodies of 56 North Korean would-be refugees in Yalu river

Thursday, September 10th, 2009

UPDATE: This story was picked up by Yonhap, the Korea Herald, and the Choson Ilbo (twice).–probably because of Joshua.

ORIGINAL POST:
By Michael Rank

Chinese police have reported how the bodies of 56 North Koreans attempting to flee to China, including seven children, were found floating in the Yalu river in 2003.

An official notice issued by police in the border town of Baishan in Jilin province describes how 53 corpses were discovered by local people on the morning of October 3, 2003, followed by three more at 5 a.m. the following day.

“An examination found that the dead were all citizens of the Democratic People’s Republic of Korea. Postmortems showed that the 56 bodies had all been shot. The evidence suggests that they had been shot by Korean armed border guards when attempting to cross illicitly into China,” says the document, dated October 7, 2003.

The dead consisted of 36 males and 20 females, including five boys and two girls.

The bodies were cremated locally on October 6, and township officials are “awaiting instructions from higher authority” on what to do with the ashes and with possessions found on the bodies. The document was issued by Badaogou police station in Baishan, a town in Changbai Korean Autonomous County which covers a large area on the North Korean border.

I am grateful to “treasuresthouhast” who posted the document here. He took it from an unnamed Chinese blog which apparently reposted it from bbs.163.com.

Posted in China, Emigration | 1 Comment »

Tesco reports drop in sales to North Koreans in Dandong

Wednesday, August 19th, 2009

According to Bloomberg, North Koreans in the Chinese city of Dandong have slashed purchases of ham, shirts, and candy at UK-owned Tesco:

At the Tesco store, Zhao said fewer North Koreans are coming in, and they’re spending less. Most North Koreans can’t freely cross the border, and only those with the ability to travel abroad shop in Dandong.

“Before this year, they would buy over 10,000 yuan in goods, now they typically only spend thousands,” she said. (10,000 yuan is about $1,460.)

Shopkeepers working within sight of the Sino-Korean Friendship Bridge spanning the Yalu River that separates the countries said traffic is down by as much as half since May.

Fan Bo said he sells about 10 generators a month to North Korea, all to Chinese companies doing business there. “The North Koreans don’t need generators,” he said. “They don’t use electricity.” Mao Yifeng, a tire seller, blames the global financial crisis for the slowdown.

Over the course of half an hour on Aug. 12, two empty blue Chinese trucks crossed the bridge into Dandong. One diesel freight train, also Chinese, crossed to China from North Korea. The open door on one of its two cars revealed there was nothing inside.

Over 45 minutes the next morning, two empty trucks and three empty North Korean buses crossed into China. No trucks were seen heading into the North.

A souvenir salesman who only gave his surname, Huang, said he’s seen road and rail traffic on the Friendship Bridge fall by about half since North Korea’s nuclear test in May. “It was never busy, now it’s even less,” Huang said.

….Trade Aid

China is the North’s biggest trading partner. Its support for the regime can be gauged by the trade surplus it runs with the country, according to Nicholas Eberstadt, a Korea specialist at the American Enterprise Institute in Washington. That fell to $386 million in the first half of this year from $1.27 billion in all of 2008, as China’s imports of coal from North Korea hit the highest level in at least five years, China’s Ministry of Commerce data show.

“China is Kim Jong Il’s patron of last resort,” said Eberstadt. “If net transfers from China continue to shrink, it will be ‘back to the 1990s’ for North Korea. That can only be an alarming prospect for Kim Jong Il and his would-be successors.”

Official trade statistics, incomplete and not including goods smuggled by sea or across the 1,415-kilometer (880 mile) border, show two-way trade between China and North Korea fell 2.5 percent in the first six months of this year to $1.12 billion, according to China’s Commerce Ministry. Trade between China and South Korea during the same period was $67.6 billion.

Read the full artilce here:
North Koreans Spurn Tesco Ham as China Trade Withers
Bloomberg
Michael Forsythe
8/19/2009

Posted in China, Foreign aid statistics, International trade, Statistics, Trade Statistics, United Kingdom | Comments Closed

Chinese tourists stay away from North Korea after nuclear test

Sunday, August 16th, 2009

By Michael Rank

Far fewer Chinese tourists are visiting North Korea from the border towns of Yanbian and Yanji due to nerves over the country’s recent nuclear and missile tests, a Chinese website reports.

This is normally the height of the tourist season, the report notes, but this year hardly any tourists taking tours to visit the nearby North Korean port city of Rajin (Najin) 라진/나진. “In previous years there have been about 300 or 400 tourists a day [crossing into North Korea] at this time, but recently there have been only about 20,” it quotes a Yanbian travel agent as saying.

Two-day trips from Yanji cost only 800 yuan ($117) per person but because the nuclear testing and rocket launch sites are nearby most tourists are keeping away, the report adds. Rajin is in fact about 250 km north of the nuclear testing site near Gilju (Kilchu) 길주 but who know what is safe…?

The report claims that things are different in the biggest border city Dandong and that tourists are crossing the frontier at normal levels there.

But this was contradicted by a surprisingly frank report in the China Daily earlier this month which quoted Li Peng, general manager of the Dandong branch of the State-owned China International Travel Service (CITS), as saying: “The revenues from four-day tours and business trips to the DPRK have plunged at least 50 percent compared to last year.”

He said about 30,000 tourists have traveled with his company to the DPRK from Dandong in the past two years, with a four-day visit costing around 2,400 yuan ($350) per person.

“But during the first seven months of this year, we have seen 2,000 make the trip. Many canceled because of safety concerns,” he said, adding that the recent capture and imprisonment of two journalists from the United States had done nothing to ease those concerns.

The journalists have since been released, but it’s unlikely this will result in a massive rebound in China-North Korea tourism.

Another China Daily report was remarkably frank about smuggling which has also been badly hit by the nuclear furore. It also quoted Dandong Federal Business Corp Chairman Shan Jie, who said: “Most of the nearly 1,000 legal enterprises involved in border trade here have stopped operations.”

Meanwhile, the latest report focuses on a North Korean waitress in Dandong who “sports a luxury Gucci watch on her left wrist – and a Democratic People’s Republic of Korea (DPRK) flag pin on her chest.”

“Her restaurant is one of Dandong’s most luxurious and one of the few establishments in the Chinese city bordering the DPRK that is still seeing brisk business in the wake of Pyongyang’s nuclear test in May and subsequent missile launches.”

Posted in China, Restaurants, Tourism | 4 Comments »

North Korean Economy Watch