Archive for the ‘China’ Category

North Korean iron ore continues flowing into China, reports suggest

Friday, August 12th, 2016

By Benjamin Katzeff Silberstein

Despite firm promises from Chinese officials of full sanctions enforcements, reports from Daily NK suggest that iron ore is still being exported in substantial quantities from North Korea. Sanctions allow imports of iron ore when proceeds benefit “livelihood purposes,” but this seems to be a very difficult criteria to ensure in practice:

Thousands of tons of iron ore exports from the North are pouring into China daily, despite UN Security Council sanctions issued in April that ban states from procuring minerals from the regime unless related to “livelihood purposes”, Daily NK has learned.
“The Chinese regions facing Musan County in North Korea are teeming with thirty- and forty-ton trucks loaded with iron ore,” a source in China with knowledge of North Korean affairs told Daily NK in a telephone conversation on August 11.
Sources in North Hamgyong Province corroborated this news.
The trucks, he added, are mostly transporting iron ore to a classification yard near Helong City in China. In the past, the railways near Helong running along the Tumen River border area were not frequently utilized. But recently China added express freight trains on this route, presumably to facilitate more expedient transport of North Korean iron ore to local steel mills. More broadly, the source asserted the development indicates Beijing’s future intentions to expand trade with the North.
Connecting dozens of 100-ton freight cars, the express trains transport some 2,000 tons in a single shipment, with several round trips transpiring daily. Moreover, the source noted, “Some cargo trucks transport goods from Musan Mine across the submerged bridge on Tumen River directly to steel mills in China.”
The partially underwater bridge, made by connecting slabs of rock large enough to permit vehicular transport, was constructed in the early 2000s to facilitate the Sino-North Korean iron ore trade industry. However, following the implementation of strong global sanctions earlier in the year, iron exports plummeted, rendering the bridge obsolete.
More recently, however, this crude piece of infrastructure is experiencing a resurgence, coming as quite a surprise to local Chinese residents. The source explained that goods passing through Chilsong Customs are checked thoroughly, item by item. Customs officers at the underwater bridge, on the other hand, merely record the total number of shipments passing through, making it the preferred conduit for proscribed goods.
The general rise in trade can also be noted in Dandong, the gateway to 70 percent of trade between the North and China. A source in the city told Daily NK earlier in the month that after the reopening of the aging Sino-North Korean Friendship Bridge, after yet another round of repairs, the volume of shipments has been on a steady uptick.
“Roughly 1,000 trucks, each with a 20-ton loading capacity, are laden with diverse goods and pulling into Sinuiju daily. That’s more than a ten-fold increase,” she said.
Full article:
North Korean iron ore exports to China booming despite sanctions
Daily NK
Choi Song Min
2016-08-12
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Buy your own North Korean coal, through Alibaba

Thursday, June 30th, 2016

By Benjamin Katzeff Silberstein

Are you looking for the perfect birthday present or anniversary gift for your loved one? Look no further. It seems you can buy your own North Korean coal through the Chinese shopping website Alibaba.

One company, Dandong Zhícheng Metallic Material, states: “We are professional company of trading the North Korea Briquettes, choose us, trust us.” Buyers can choose to have their coal transported either through the Dalian or Dandong ports, and the company markets both coal briquettes and other types of coal products. The website contains information about the country and their products in both Chinese and Korean, but the text is blurry and appears in a small font, making it difficult to read. I am currently unable to find the original page where these descriptions appear, but below are a few screenshots:

Screen Shot 2016-06-30 at 22.05.17Screen Shot 2016-06-30 at 22.05.31Screen Shot 2016-06-30 at 22.05.52 Screen Shot 2016-06-30 at 22.06.14Screen Shot 2016-06-30 at 22.06.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Update 2016-07-03:

Voice of America (Korean version) cites this blog post here, and Yonhap in turn cites VoA here, without citing this blog.

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North Korea’s trade volume down 18 percent in 2015

Tuesday, June 14th, 2016

By Benjamin Katzeff Silberstein

According to KOTRA (reported by Yonhap):

North Korea’s trade volume sank 18 percent last year from a year earlier, ending five years of straight growth, due largely to a drop in the prices of its key trading items such as coal and overall shipments, a South Korean trade agency said Wednesday.

The North’s overall trade volume came to US$6.25 billion in 2015, compared with $7.61 billion the previous year, according to the state-run Korea Trade-Investment Promotion Agency (KOTRA).

The reclusive country’s outbound shipments fell 15 percent on-year to reach $2.7 billion, while imports also dropped 30 percent to $3.55 billion over the cited period, the data compiled by the agency showed.

Consequently, the communist state’s trade deficit reached $850 million last year, narrowing 33 percent from the previous year.

The North’s trade volume has been on a rising path since 2009 reaching an all-time high of $7.61 billion in 2014.

But a drop in prices of key trade items such as coal, coupled with a slowdown in China — its strongest ally — led to a decline in overall trade volume, KOTRA said.

Bilateral trade volume between North Korea and China came to $5.71 billion last year, down 16.8 percent from a year earlier,

The figure accounted for 91.3 percent of the North’s overall trade in 2015, slightly higher than the previous year’s 90.1 percent.

Two things are worth noting: first, it’s about trade volumes in dollar terms, not the amount of goods per se. Second, this would seem to add to what I’ve pointed out earlier on this blog – decreases in trade with China following the sanctions may simply be part of a pattern that began earlier, before the sanctions were put in place. In 2015, trade with China accounted for 90.1 percent of North Korea’s total trade.

Full article by Yonhap here:
N.Korea’s trade volume drops 18 pct in 2015
Yonhap News
2016-06-15

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China claims to ban more dual-use products from DPRK

Tuesday, June 14th, 2016

According to Reuters:

China’s Ministry of Commerce released a list of goods banned for export to North Korea on Tuesday, saying the items could be used to build weapons of mass destruction.

The list of dual-use goods, or products that have both civilian and military use, comes after the United Nations nuclear watchdog said North Korea appeared to have reopened a plant to produce plutonium from spent fuel of a reactor central to its banned atomic weapons drive.

The ministry said in a statement on its website that the list was meant to comply with the requirements of a round of U.N. sanctions imposed in March in response to a North Korean nuclear test in January.

The new list adds to a much longer Chinese list of banned goods released in 2013 after the North carried out its third nuclear test that year.

Analysts said at the time the 2013 list was a positive sign that China was working to implement U.N. sanctions targeting the North’s nuclear and ballistic missile programmes.

The new list names dozens of banned items including magnetic materials, high-strength metals, chemical fibres, and laser-welding equipment. It also lists about a dozen chemicals that could be used in producing “chemical warfare agents”.

The banned goods could be used in nuclear, biological or chemical weapons development, the ministry said.

But China has declined in the past to give a full list of items banned for export to North Korea, which U.N. monitors have said makes it difficult to assess how strictly China is implementing sanctions.

China remains North Korea’s largest trading partner and sole major ally. Chinese analysts have regularly expressed concern that North Korea could collapse in chaos if Beijing’s policies become too harsh.

Reclusive North Korea rattled nerves this year by carrying out a fourth nuclear test in January and a satellite launch in February.

Thanks to Werner (a reader), here is the list of newly prohibited items (in Chinese).

I am keeping up with China – DPRK trade in 2016 here.

Read the full story here:
China says to ban export of more dual-use goods to North Korea
Reuters
2016-6-14

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China’s enforcement of sanctions on North Korea: a bit of perspective

Thursday, June 2nd, 2016

By Benjamin Katzeff Silberstein

To what extent is China enforcing the latest round of UNSC sanctions on North Korea? This question is as important and interesting as it is nebulously complicated and difficult to answer. For the fact is, like Curtis points out here, that lower coal imports by China from North Korea does not necessarily give evidence to sanctions enforcement. Some of the figures reported in the news concern the value of the imports, which fluctuates with world market prices.

Moreover, as the old saying goes, correlation does not imply causality. In other words, the mere fact that trade in coal and other goods is decreasing does not necessarily mean that it is going down because of sanctions alone. It is worth to remember that Chinese imports of North Korean coal has decreased in the past too, before the latest sanctions round, due to decreased domestic demand and other factors. A whole host of variables other than sanctions may well be at play too.

Looking back at some previous trade data gives some context to the latest reports of decreasing trade. Even though volumes may be down, to fully understand how this impacts the North Korean economy, dollar value terms may be more relevant.

To recap:

  • According to recent data, Chinese imports of North Korean coal have decreased by 20.5 year-on-year for April 2016 (in tonne numbers).
  • According to Yonhap figures, cited here, this translates into a drop from $116.6 a year ago, to $72.27 now. This represents a 37 percent drop.
  • In the pre-sanctions quarter of the year, North Korean exports to China increased by 12 percent.

To put this in perspective, consider the following changes in the past:

  • Between January and November 2014, North Korean exports to China dropped by 12.3 percent in dollar terms.
  • Between 2013 and 2015, the value of coal exports to China dropped by 24.6 percent.
  • Between January and February 2014, total trade between North Korea and China dropped by 46 percent.

The point of citing these numbers is not to show that sanctions are not being implemented by China. Rather, such flows tend to fluctuate quite heavily for other reasons as well, and it is too early to conclude that sanctions are the only reason behind the contraction. As a New York Times story from late March this year showed, Chinese border agents tend to be fairly lax in controlling goods crossing the border – NYT cited a figure of about five percent of all goods being inspected. In sum, it is too early to draw any major conclusions about Chinese sanctions enforcement, and only future data will be able to give a more conclusive picture.

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2016 Pyongyang Spring Trade Fair

Wednesday, June 1st, 2016

UPDATE 5 (2016-6-1): The photographer Aram Pan (DPRK360) shot an incredible video of the trade fair. You can really learn a lot about the DPRK from watching it. There were lots of little surprises for me.

Also check out his Facebook photos of the Trade Fair here.

UPDATE 4 (2016-5-26): KCTV covered the trade fair.

UPDATE 3 (2016-5-23): KCTV Covered the trade fair.

UPDATE 2 (2016-3-17): According to the Institute for Far Eastern Studies (IFES):

North Korea to Host International Trade Fairs despite UN Sanctions

Despite the newly imposed sanctions by the UN Security Council (UNSC), North Korea does not appear to be deterred from hosting large-scale international events, as Pyongyang plans to host its annual Pyongyang International Trade Fair (PITF) twice this year, in May and September.

North Korea’s official web portal ‘Naenara’ reported that the spring PITF will be held at the Three-Revolution Exhibition House in the Sosong District in Pyongyang from May 16th to the 19th and the autumn PTIF will be held at the same venue from September 5th to the 8th.

‘Naenara’ claimed that the country “has been hosting hundreds of trade shows both in the country and abroad for over 50 years since April 17, 1958 and such events will enable the DPRK to accelerate its friendship and cooperation with other states and boost its international trade.”

According to the website, these trade fairs will exhibit items such as machine tools, mining equipment and their manufacturing technology for minerals—items in a sector now heavily targeted by the new sanctions imposed by the UNSC.

According to the report, the trade fairs will also include displays of construction machinery and building materials, energy and environment protection materials, communication and information technology, agricultural equipment and technology, foodstuffs and production technology, print and packing machinery, medical equipment and pharmaceuticals, light-industry products, consumer goods, and even vehicles.

Advertising is of course permitted at the trade fairs, with installation and removal displays and promotional materials requiring pre-approval by the host Korean International Exhibition Corporation. Transportation of the items for exhibition is to be dealt with by the Pyongyang Agent Department of the Italian company OTIM (Organizzazione Transporti Internazionali Marittimi). OTIM, a freight forwarding company established in the late 1940s, has been authorized and in charge of transporting goods between North Korea and Europe.

‘Naenara’ announced that the fairs will accept emailed or faxed applications until 40 days prior to the opening and has requested companies to send along their list of participants.

Apart from domestic enterprises, companies from around 16 countries or more — including Australia, China, Cuba, Cambodia, Germany, Italy, Indonesia, Mongolia, New Zealand, Poland, Russia, Singapore, Switzerland, and Vietnam — have reportedly participated in these trade fairs in the past.

Given North Korea’s isolation from the international system and closed-nature of its economy, the international trade fairs have been important events for its economy. However, while North Korea seems determined to host its annual spring and autumn events despite the international sanctions and pressure, just how many companies from other countries will participate is an open question.

UPDATE 1 (2016-3-1): The 2016-Q1 issue of Foreign Trade is out, and it contains some additional information on the 2016 Pyongyang Spring International Trade Fair.

Foreign-Trade-2016-Q1-Pyongyang-Trade-Fair

ORIGINAL POST (2016-2-11): Everyone may be talking about nukes, rockets, sanctions, and the closure of the Kaesong Industrial Complex, but the North Koreans have begun planning the 2016 Pyongyang Spring Trade Fair. Below you can see images of the first flyers to emerge:

Ex-Easy-Trade-Fair-2016-a

Ex-Easy-Trade-Fair-2016-b

Promotion of the trade fair appears to be in the hands of a Chinese internet firm named Ex-Easy.

Thanks to a reader (Andy) for translating some of the flyer:

“Pyongyang International Business Products Exhibition” is organised by an affiliated company under DPRK’s Ministry of Trade. This international exhibition is DPRK’s largest and most trade-conducive of its kind. It is organised yearly since 1998, and is held twice yearly – in spring and autumn – from 2005. The exhibition will be held in Pyongyang’s Three Revolution Exhibition hall, with a capacity of 6500 square meters. The DPRK has been gradually liberalising its economy in recent years and increasing its trade with neighbouring countries. At the same time, it has raised its domestic living standards, and they are attracted to Chinese products and (manufacturing) techniques.

Products exhibited:
1. Daily necessities, office supplies, household appliances, manufacturing / packing equipment, sewing equipment, clothes, stitched (embroidered?) products, …
2. Food, flavourings, food additive facilities/techniques, high temperature processed products and equipment, fruits, vegetable processing equipment, techniques, nucleic acid manufacturing facilities/techniques/products, bean processing and techniques, fish/seafood processing/techniques, health product processing/techniques
3. Sealing machinery, vacuum packaging, engraving machinery, food packaging machinery
4. Injection moulding machinery, moulds.
5. Misc hardware and DIY materials: bathroom/kitchen, construction/DIY, locks, safety equipment/accessories, small scale electronics, construction decorations, interior decoration – doors/windows/ceiling/walls/paint/chemicals/ceramics/masonry materials, building tech, environmentally frendly materials, furniture, inspection and certification
6. All sorts of large machinery – mining and related equipment, farming equipment, electronics, light industries, food processing and related equipment, chemical products, medical equipment, medicine manufacturing facilities.

Last exhibitions featured exhibitors from DPRK, China, Germany, UK, Australia, Italy, Poland, Cuba…. 400 over companies from 16 countries/regions. A total of 6372 square meter of exhibition space over two floors, taking up all usable space. Cars and engineering machinery took up about 1000 square meters of space outdoors. Exhibited products included cars, tooling machine, chemical, machines, communication equipment, electrical equipment, transportation machinery, plastics machinery, engineering equipment.

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DPRK participates in Xian trade fair

Friday, May 13th, 2016

According to Yonhap:

North Korea on Friday showed off wild ginseng roots, a tiger painting and other health products at an international trade fair hosted by China’s northern city of Xi’an.

Although North Korea and China have held their annual trade fair in the border city of Dandong, it was unusual for the North to set up booths at a trade exhibition in other parts of China.

International sanctions were tightened in early March following North Korea’s fourth nuclear test in January and launch of a long-range rocket in February.

Forty-five nations, including South Korea, participated in the “Silk Road” trade fair, which is organized by China’s top economic planner and commerce ministry.

North Korea came up with paintings, wild ginseng roots, ginseng tea, cigarettes and some medicine.

Wild ginseng roots, which are highly valued in Korea for its perceived healing benefits, were being sold at 3,600 yuan (US$549.80) per package.

A painting featuring a tiger, which is 4 meters wide and 1.5 meters high, was priced at 100,000 yuan, according to a North Korean representative.

There were about 30 North Korean representatives at the fair.

A source with knowledge of the matter in Xi’an said North Korea applied for booths at the fair, although China had not sent an invitation to the North for the exhibition.

Read the full story here:
N. Korea shows off wild ginseng roots, tiger painting at China fair
Yonhap
2016-5-13

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Taedonggang Beer goes on sale in China

Thursday, April 28th, 2016

According to the Korea Times:

Taedonggang beer, a state-owned North Korean brand, is available in grocery stores in Dandong and Shenyang, China, according to news reports.

“I noticed billboards promoting Taedonggang beer on a street near Dandong Station, and also newspaper advertisements showing the addresses and phone numbers of retail stores,” a source told Radio Free Asia.

The beer is not yet widely distributed in China. Sources from Shenyang and Dandong said they could find only a few stores selling the beer in Xita Street where many Koreans live and in Korean gift shops.

North Korea’s popular beer costs 20 yuan ($3) a bottle, four times the price of regular brands in Chinese grocery stores.

“The beer has a soft, rich flavor with more alcohol than Chinese beers,” said a Chinese man who tasted Taedonggang beer at a restaurant in Dandong.

“However, the price is too expensive for Chinese citizens to drink regularly.”

Read the full story here:
N. Korean beer sale in China
Korea Times
Lee Jin-a
2015-4-28

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Nw York Times reports on sanctions enforcement, at Sino-DPRK border

Thursday, March 31st, 2016

By Benjamin Katzeff Silberstein

Just as before, China’s controls over goods flowing across the border with North Korea is spotty at best. According to a New York Times dispatch from the border, Chinese customs authorities only control a small percentage of the goods (particularly relevant parts in bold):

If recent trade here is any indication, that cooperation has been spotty at best.

Cross-border trade, legal and illegal, flows pretty much as usual, and seems to be largely unhindered by the new rules, traders and local officials said.

One of the toughest components, a requirement that countries inspect all cargo entering or leaving North Korea for banned goods, is not enforced here.

On many days, Mr. Qin’s secondhand taxis cross the bridge in a convoy of more than 100 vehicles, including trucks loaded with containers draped in shabby tarpaulins and secondhand minibuses for North Korea’s rickety transportation system. Few are ever inspected by the Chinese authorities.

China accounts for about 90 percent of North Korea’s trade. Half of that business is estimated to flow through Dandong, a boom-and-bust city whose fortunes are tied to trade with North Korea.

Virtually everything that keeps the North Korean economy afloat passes through here: Coal and iron ore come in, violating the sanctions, and crude oil flows out, exempted from them.

Smuggling is rampant. The export of North Korean rare earth minerals and gold, banned under the new rule, is one of the more lucrative revenue sources for the North Korean government, traders said. That business continues on privately owned 200-ton ships belonging to Chinese smugglers based here, they said.

The United Nations rules put the onus on customs inspectors here to judge which goods may help the nuclear program or the military, which are banned, and which are intended for civilians, which are allowed.

On a recent day, the customs checkpoint, a large outdoor parking area adjacent to the bridge, held a collection of China’s castoffs: cheap four-wheel-drive Haval passenger vehicles, discount medicines for hepatitis and tuberculosis, old solar panels to brighten dark houses.

But the customs office here lacks the staff to open all the containers, a local government official said. Like most people interviewed for this article, he spoke on condition of anonymity since there are risks to speaking candidly to foreign media about trade with North Korea.

At peak times, up to 200 trucks a day cross the Yalu River to Sinuiju, North Korea. Before departing, only about 5 percent of the containers they carry are inspected, the official said.

[…]

Virtually everything that keeps the North Korean economy afloat passes through here: Coal and iron ore come in, violating the sanctions, and crude oil flows out, exempted from them.

Smuggling is rampant. The export of North Korean rare earth minerals and gold, banned under the new rule, is one of the more lucrative revenue sources for the North Korean government, traders said. That business continues on privately owned 200-ton ships belonging to Chinese smugglers based here, they said.

The United Nations rules put the onus on customs inspectors here to judge which goods may help the nuclear program or the military, which are banned, and which are intended for civilians, which are allowed.

On a recent day, the customs checkpoint, a large outdoor parking area adjacent to the bridge, held a collection of China’s castoffs: cheap four-wheel-drive Haval passenger vehicles, discount medicines for hepatitis and tuberculosis, old solar panels to brighten dark houses.

But the customs office here lacks the staff to open all the containers, a local government official said. Like most people interviewed for this article, he spoke on condition of anonymity since there are risks to speaking candidly to foreign media about trade with North Korea.

At peak times, up to 200 trucks a day cross the Yalu River to Sinuiju, North Korea. Before departing, only about 5 percent of the containers they carry are inspected, the official said.

[…]

There is, however, evidence of some enforcement in one important area: North Korea’s sale of coal and iron ore, two of its most important exports.

Port authorities here have been fairly vigilant in enforcing the new ban on North Korea’s ragged fleet of more than two dozen cargo ships, two local officials said. The coal they carry earns North Korea as much as $1 billion a year, according to the United States Treasury.

But that ban has been circumvented by smuggling ships and by the transfer of 12 North Korean ships to Chinese ownership, allowing them to dock at Chinese and other ports, a longtime trader, Mr. Yu, said.

A few traders interviewed here said the new rules had crimped their business.

Mr. Zhang, a trader who does tens of millions of dollars a year in business with North Korea, said customs officials had just impounded a big secondhand excavator he had bought from a coal mine in Shanxi Province and sold to a North Korean coal mine for more than $60,000.

Customs inspectors asked how he knew the equipment would not be transferred to the North Korean military. “We didn’t know how to answer,” he said.

But traders and officials expect that after some initial minor squeezing, whatever enforcement there is will be relaxed. Liaoning Province, where Dandong is a prominent city, ranked at the bottom of China’s 31 provinces for economic growth last year, and there was political pressure not to weaken the economy further.

Full article here:

A Hole in North Korean Sanctions Big Enough for Coal, Oil and Used Pianos

Jane Perlez and Yufang Huang

New York Times

03/01/2016

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Chinese local governments formally notified of sanctions against North Korea

Monday, March 21st, 2016

By Benjamin Katzeff Silberstein

I’m not sure if this is anything out of the ordinary or if this is the formal routine every time sanctions have been passed. Nevertheless, it’s an interesting development. If sanctions against North Korea are ever to hit the economy where it hurts, Chinese local governments are perhaps the most important implementers since much (or most) of North Korea’s external trade occurs with them. Korea Herald:

China has notified its local governments on how to implement new U.N. sanctions on North Korea, including specific measures on imports from North Korea, a diplomatic source with knowledge of the matter said Monday.

Kim Hong-kyun, South Korea’s chief nuclear envoy, held talks with his Chinese counterpart, Wu Dawei, last Friday as the two nations vowed to fully implement the new U.N. sanctions against North Korea’s fourth nuclear test and rocket launch.

During the talks, Wu told Kim that China has been “in the process of implementing the new U.N. resolution on North Korea,” said the source, who attended the Friday meeting.

“The Chinese side also believes that strong sanctions are needed to show its sincerity on denuclearization,” the source said.

Earlier this month, the U.N. Security Council levied tougher sanctions against North Korea’s fourth nuclear test on Jan. 6 and the Feb. 7 launch of a long-range rocket, both of which violated previous U.N. resolutions.

The new U.N. sanctions require countries to limit or ban imports of North Korean coal, iron ore and other mineral resources if the proceeds are used for the North’s nuclear and missile programs.

One of the potential loopholes is a provision that allows North Korea to continue exports of coal and iron ore if such transactions are for “livelihood purposes.”

Full article here:
China notifies local gov’ts of new U.N. sanctions on N. Korea
Yonhap News/Korea Herald
2016-03-21

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