North Korea imported US$170,000 worth of firearms from Switzerland in the first half of this year, Seoul’s trade agency said Friday.
The communist country brought in about $100,000 of guns such as shotguns, air and gas rifles, and revolvers while importing around $70,000 worth of firearm components, according to the report by the Korea Trade-Investment Promotion Agency, or KOTRA.
The state-run agency said the North had no record of firearm imports from Switzerland since 2009 until last year when it started to ship them in the first half.
Some experts said the new trend may be due to the fact that North Korean leader Kim Jong-un spent his adolescence in the country.
Read the full story here:
N. Korea imports US$170,000 of firearms from Switzerland Yonhap
2012-10-26
Despite the global economic slowdown, more than 6,000 business representatives from 20 countries signed agreements on more than 200 cooperative projects. Some 72 of the largest projects have a total combined value of $1.26 billion.
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During the 11th Five-Year Plan period (2006-2010), total trade value between Dandong and DPRK amounted to $3 billion. Imports and exports between Dandong and the DPRK reached $1.86 billion in 2011.
So far, trade between Dandong and DPRK accounts for 40 percent of total China-DPRK trade, and the volume of the cross-border cargo trade via Dandong port makes up 80 percent of the total Sino-DPRK trade volume.
UPDATE 4 (2012-10-16):Xinhua reports on the closing of the expo:
The five-day 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, held in the border city of Dandong, concluded on Tuesday with 72 agreements of cooperation intent signed. They have a combined value of 1.26 billion US dollars.
Pan Shuang, vice mayor of Dandong, said more than 6,000 Chinese and overseas people from over 20 countries and regions exhibited at and attended the expo. There were talks on 200 projects.
He said the projects related to industries ranging from aquaculture, clothes manufacturing, chemical production, wind power generation equipment, iron steel production to hotel construction.
AT THE EXPO
At the exhibition, the DPRK delegation exhibited ginseng products, food specialties, hand-made Hanbok, a traditional Korean costume, as well as mining and machinery equipment.
Ri Yong Chol, sales manager of Korea Roksan General Trading Corp., which is a ginseng supplier, said “I came to look for Chinese friends and potential business partners. Our company is also seeking opportunities to set up a subsidiary in China to get better access to the Chinese market.”
A Korean girl wearing brightly-colored Hanbok and traditional ornaments was selling costumes. “Our factory can make 20 such hand-made Hanboks a day. The clothes are for important occasions with exquisite workmanship and high-quality material,” she said.
Liu Songyu, chairman of a Korean garment firm from Yanbian Korean Autonomous Prefecture of Jilin Province, was interested in the business.
“Chinese labor costs have been rising fast. In Yanbian, a garment-factory worker’s salary has risen to 2,000 yuan (319 US dollars) a month. While, if the company had a factory in DPRK, it would save a considerable amount on labor costs. I would give a serious thought to that,” he said.
Yanbian is a heavily Korean ethnic populated region in China, where people also wear Hanbok during important occasions.
Elsewhere, Huang Zijun, an authorized dealer of Total Petrochemcial, was overwhelmed to obtain 20 orders from the DPRK delegation during the expo.
“I felt their enthusiasm in promoting business at the expo. I believe the DPRK is a big market for petrochemical products like lubricating oil,” he said.
An economic, trade, culture and tourism expo jointly initiated by China and the Democratic People’s Republic of Korea (DPRK) opened Friday in the border city of Dandong in northeast China’s Liaoning Province.
A delegation of 500 members from the DPRK is attending the 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, which is scheduled to run from Friday to Tuesday, the event’s organizers said.
Over 400 Chinese companies from 12 industries are also attending the expo.
With the theme of “friendship, cooperation and development,” the expo consists of commodity exhibitions, trade fairs, DPRK art performances, craftwork exhibitions, a border trip to the Yalu River and an exhibition for the tourism resources of the two countries.
Supported by the China Council for the Promotion of International Trade, the event is being organized by the Liaoning Provincial Government.
China is DPRK’s biggest trade partner. Statistics show that bilateral trade volume went up 62.4 percent year on year to 5.64 billion U.S. dollars last year.
A source from Dandong described the unusually vibrant scene to Daily NK yesterday, saying, “The North Korean authorities have mobilized companies from Pyongyang and from here in China to sell goods and pitch for joint venture opportunities. There are loads of people; it’s standing room only.”
The source added that North Korean companies attending the event are pushing very hard to attract investment; notably, by distributing their own promotional literature expounding upon the given company’s superior virtues and providing exact contact details for follow-up inquiries. It is not hard to find meetings continuing in local North Korean eateries, as the North Korean side tries to woo potential sources of capital.
Chinese companies are keen to hear about the joint venture opportunities available, the source also said; and with most of the larger enterprises from China’s three northeastern provinces sending representatives to Dandong for the event, which runs until the 16th, most of the city’s hotels are apparently full to bursting.
However, due to past and present cases of lip service being paid to contractual obligations by North Korean companies whose only goal has been to attract funding rather than build business, Chinese representatives are still very cautious about actually signing on the dotted line.
One such representative from a Dandong-based company with a 10-year history of doing business with North Korea pointed out to Daily NK, “We have seen countless examples of companies making contracts and then there being little contact between the partners thereafter. Unbelievably, one manager I tried some minerals business with last year just changed the name of the company and came back again this year.”
UPDATE 1 (2012-6-7): The expo appears to have been pushed back to October 2012. According to KBS:
North Korea and China will jointly hold a fair on economy, trade, culture and tourism in the Chinese border city of Dandong for five days from October 12th.
A Dandong-based newspaper reports that this will be the first comprehensive fair covering several fields that the two countries hold. The paper said the fair will exhibit products, offer trade consultations, hold cultural and art performances and introduce both nations’ tourist attractions.
Roughly 400 Chinese companies exporting to North Korea will participate in the event. About 100 North Korean companies and cultural troupes will partake.
Dandong is China’s largest base for trade with North Korea, with 70 percent of its trade with North Korea running through the border city.
Read the full story here:
N.Korea, China to Hold Joint Industrial Fair in October KBS
2012-6-7
ORIGINAL POST (2011-12-3): Dandong to host Sino-DPRK economic and cultural expo. According to Xinhua:
The northeastern Chinese city of Dandong, which borders the Democratic People’s Republic of Korea (DPRK), will host a Sino-DPRK economic, trade and cultural exposition in June next year, a local Chinese official said Saturday.
A series of activities, including a commodity fair, investment and trade talks, tourism exhibition and arts exhibition, will be staged during the exposition, said a spokesman with the Publicity Department of the Dandong Municipal Committee of the Communist Party of China.
The Phibada Opera Troupe of the DPRK, an artists group well known to Chinese people, will give performances during the event, he said.
Adam Cathcart took the time to send me this interesting link to the official Dandong web page. It contains some videos (in Chinese) in which local officials promote the changes they expect to come to this city as it transitions into a regional trade hub.
Below I have added some links to recent blog posts that a re related to Dandong:
North Korea’s trade with China nearly tripled over the past five years, South Korean government data showed Sunday, underscoring the isolated North’s growing economic reliance on its major ally.
Trade between North Korea and China stood at US$5.63 billion last year, up 284 percent from $1.98 billion in 2007, Seoul’s unification ministry said in a report to the National Assembly.
North Korea’s exports to China almost quadrupled to $2.46 billion in 2011, compared with $580 million in 2007, the data showed. Imports rose to $3.17 billion last year, from $1.39 billion in 2007.
The North’s main export items were coal and iron ore, while primary imports from China were crude oil, gasoline and cargo trucks, it said.
A separate story on the report which also appeared in the Korea Herald featured these additional stats:
China accounted for only 67 percent of the North’s total trading with foreign countries, also including Russia, Thailand and Japan in 2007. But the dependency rate grew to 72.9 percent in 2008 and 82.9 percent in 2010 before hitting 89.1 percent last year, the report showed.
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Annual food imports from China stood at 155,000 tons in 2008 and they have steadily grown to reach 380,000 tons for the whole of 2011, it said.
The same story had data on wages in the Kaesong Industrial Zone:
Another ministry audit report also showed that since 2004, South Korea has so far paid a total of $245.7 million in salary to North Korean laborers working in the Kaesong Industrial Complex, a joint inter-Korean industrial project in the North Korean village of Kaesong.
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The report showed that a North Korean worker in the industrial zone earns an average $128.3 every month as of the first half of this year.
The average monthly pay stood at $68.1 in 2006 before steadily growing to $109.3 for last year.
Read the full story here:
N. Korea’s trade with China nearly tripled over past 5 years
Yonhap (via Korea Herald)
2012-10-7
N. Korea’s trade with China surges due to U.N. sanctions Korea Herald
2012-10-8
Saenuri Party lawmaker Yoon Sang-hyun, a member of the National Assembly`s foreign affairs, trade and unification committee, released Wednesday an analysis of closed trade data between North Korea and China, saying the North`s imports of luxury goods via Chinese customs reached 446.17 million U.S. dollars in 2010 and 584.82 million dollars last year. The figure was 272.14 million dollars in 2008 and 322.53 million dollars in 2009.
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Imports were especially pronounced for high-end cars, TVs, computers, liquor and watches. Inbound shipments of luxury cars and associated components almost doubled to 231.93 million dollars last year from 115.05 million dollars in 2009. Ship exports increased more than 20 times from 17.48 million dollars from 840,000 dollars over the same period.
Artworks and antique imports reached 580,000 dollars last year, more than 10 times the figure of 50,000 dollars in 2009. Perfume, cosmetics and fur saw their inbound shipments double. Among items that saw sharp drops in imports were leather products and musical instruments.
In 2006, the United Nations banned member countries from exporting luxury goods to North Korea under U.N. Security Council Resolution 1718, entrusting them to decide on the items. South Korea also designated 13 luxury goods for the export ban in 2009. China has yet to designate its items, and North Korea is growing more dependent on imports from China.
These are all interesting data points. Do you think they offer reasonable journalistic evidence that the DPRK is practicing inflationary public finance?
First, Yonhap reports on DPRK food imports from China (2012-9-29):
North Korea’s grain imports from China slipped 16.3 percent on year in the first eight months of this year, in an apparent sign that the North may diversify its supply channels of grain, a Seoul researcher said Saturday.
North Korea imported 181,264 tons of rice, flour, corn and other grains from China in the eight-month period, compared with 216,535 tons for the same period last year, said Kwon Tae-jin of the state-run Korea Rural Economic Institute.
The decline in grain imports from China may be attributed to a rise in food aid from China and purchases from non-China markets such as Europe and South America, Kwon said.
“Including imports from non-China markets, North Korea’s total grain imports appeared to rise this year,” Kwon said in a report posted on his Web site, adding Pyongyang may “diversify its import channels.”
At the same time the Daily NK reports that food prices continue to rise (2012-10-2):
Internal sources informed Daily NK over the holiday that on September 29th the price of rice was 6,700 won/kg in Pyongyang, 7,000 won/kg in Onsung, North Hamkyung Province and 6,500 won/kg further west in Hyesan, Yangkang Province.
Not only do these prices far exceed those of Chuseok 2011, they even far exceed those of earlier this year.
The Hyesan source explained that on the day before the Chuseok holiday (Saturday) the atmosphere in the market was thus rather uncomfortable. “It was very slack,” she said. “People couldn’t buy anything easily, so most just seemed to be looking.”
Secondly, Yonhap reports that despite situations like those experienced by Xiyang or in Musan, mineral exports to China are up (2012-10-2):
North Korea’s exports of mineral resources recorded a 33-fold jump over the past decade with China remaining the biggest importer of the North’s iron ore and coal, a report showed Tuesday.
North Korea’s mineral exports stood at a meager US$50 million in 2001, accounting for 7.8 percent of its total exports, according to the report by Seoul’s Korea Trade and Investment Promotion Agency.
The mineral exports soared to $243 million in 2005 and $1.65 billion in 2011, accounting for 59.4 percent of the North’s total exports last year, the report said.
South Korea has estimated the total values of mineral deposits in North Korea at some $6.3 trillion.
Last year, North Korea exported $1.17 billion worth of anthracite coal and $405 million worth of iron ore, with China importing almost 100 percent of anthracite coal and iron ore, it said.
Bilateral trade between North Korea and its ally Russia surged nearly 50 percent from a year earlier in the first half, a report said Saturday.
According to the report from Seoul’s state-run Korea Trade-Investment Promotion Agency (KOTRA), the amount of bilateral trade between the two countries in the January-June period came to US$38.8 million, up 49 percent from the same period last year.
The report, however, noted such a large on-year increase was due to a large drop posted in the first half of 2011.
“The volume of bilateral trade between North Korea and Russia is still insignificant by any standard,” it said.
The increase was also caused by a 68.3 percent rise in shipments of Russian goods to North Korea with fuel and steel products accounting for 29.9 percent and 28.7 percent of total shipments, respectively.
North Korea’s exports to Russia dropped 10.9 percent on-year to $5.4 million, according to the KOTRA report.
Following (or perhaps concurrently with) the story on the Russia – DPRK debt forgiveness deal, Andrei Lankov writes about DPRK trade and investment in the Asia Times:
But a brief look at trade statistics makes one suspicious about claims in regard to Russia’s prominence in North Korean issues. It is not widely understood that summits and official rhetoric notwithstanding, actual trade between North Korea and Russia is miniscule, even by the meager standards of North Korea.
In 2011, trade volume between the two countries was merely US$0.12 billion. As inter-state trade goes, this practically means that Russia and North Korea have close to no trade. In the same year, Sino-Korean trade hit the $5.6 billion mark. If you compare this with other East Asian countries this is still peanuts, but it is nonetheless almost fifty times the level of Russo-North Korean trade.
One also might notice that the improvement in political relations between Russia and North Korea had absolutely no impact on Russo-North Korean bilateral trade volumes. If anything, the trade declined when the politicians were smiling and exchanging niceties.
Over the past 15 years, Russo-North Korean trade on an annual basis has fluctuated around the $100-$250 million mark (in a clear downward trend). Throughout the same period, Sino-North Korean trade has increased almost 10-fold.
It is strange that these obvious facts do not attract enough attention among those who like to talk about Russia’s supposed leverage in Pyongyang. These figures are easily obtainable and yet almost entirely overlooked. This seems to be because the figures do not easily fit into preconceived notions about Russo-North Korean relations; the inconvenient truth is that the political rhetoric shared between the two countries is often very shallow and lacking in an economic basis.
To be blunt, Russian businesses have no interest in North Korea.
North Korea is a very poor place that has few comparative advantages in the world market. Nonetheless such advantages do exist. First, North Korea has some mineral resources (iron ore,coal, copper, lead and so forth) which are largely to be found in the northern most part of the country. Second, it has a rather skilled and unbelievably cheap workforce. North Korean workers consider themselves lucky if they are paid $25 a month. But none of these two advantages are of any significance to corporate Russia.
Russian mining companies have all of Siberia at their disposal, and North Korea’s mineral deposits do not look all that impressive by comparison. Things are made even worse by the constant threat of political instability and the gross underdevelopment of transportation and infrastructure in general. Therefore, no major Russian mining firm is willing to invest in North Korea (some have been courted by Pyongyang, have always responded in the negative).
The pull of cheap labor is also not all that attractive to Russian companies. The Russian developmental model does not involve heavy reliance on light industry in general, nor in particular the manufacture of T-shirts and running shoes. There is a moderate need for cheap North Korean labor in Russia itself, and so for many decades North Korean workers have been employed in Russia. But the scale of these operations is quite limited, and likely to remain so (10-20,000 workers at most).
One can of course point at two much discussed projects of economic cooperation between Russia and North Korea – the proposed trans-Korean railway and proposed natural gas pipeline. The pipeline project was discussed during Kim Jong-il’s last trip to Russia in 2011, and as a result still attracts much attention. However, we should remember that the very similar trans-Korean railway was first officially approved in the late 1990s, but still remains on the drawing board and as elusive as ever. There is good reason to believe that a similar fate awaits the pipeline project: for years there will be talks, enthusiastic newspaper articles, even official visits, but not much in terms of actual construction.
Both railway and pipeline projects share one common feature: North Korea is treated as a space to traverse. Had this area been covered with tropical rainforest, or desert, it would have little impact on either of these projects, whose main task is to facilitate interactions between Russia and South Korea.
From a purely commercial view, a short-cut through North Korea makes perfect sense, but there are many political problems which ensure that we will have to wait for many years before any of these projects will begin in earnest.
The major problem is recurrent and perhaps incurable instability which blights the Korean peninsula. Once Russian companies start real construction, they will become hostages of the complex and often unpredictable clashes of power interests in and around the Korean peninsula.
North Korea’s trade with China jumped nearly 25 percent in the first six months of this year, China’s customs office said Thursday, indicating that the North’s reliance on its neighboring ally on the economic front is growing.
According to the data released by the Chinese General Administration of Customs, the two allies’ trade came to US$3.14 billion during the January-June period, up 24.7 percent from the same period a year earlier.
The two countries signed the Sino-North Korean Mutual Aid and Cooperation Friendship Treaty in 1961, whereby China pledged to immediately render military and other assistance to its secretive ally.
The North’s exports to China totaled $1.3 billion during the first half of this year, up 22.2 percent from a year earlier.
Its imports from China grew 26.5 percent on-year to $1.84 billion over the cited period.
This resulted in a trade deficit of about $540 million for the North, the data showed.
Iron ore was North Korea’s leading export item, while China exported to North Korea crude oil and construction machinery, the customs office said.
With international sanctions in place amid the North’s nuclear ambitions, China has emerged as the communist state’s key supplier of economic goods.
Read the full story here:
N. Korea’s first-half trade with China jumps 25 pct Yonhap
2012-8-9
A couple of weeks ago, the South Korean Central Bank, the Bank of Korea, published its estimate of the size and composition of the North Korean economy in 2011. You can read the finings (PDF) here. I have posted this and many other estimates of the North Korean economy on my “DPRK economic statistics page“.
Gross domestic product in the communist nation increased 0.8 percent in 2011 after a 0.5 percent decline in 2010, according to an estimate published by the Bank of Korea in Seoul. The nation’s economy has contracted during four of the last six years, the bank’s data show.
“The manufacturing sector declined, but the agricultural industry enjoyed better weather and more use of fertilizer,” the Bank of Korea said in an e-mailed statement.
North Korea is projected to keep growing under the new leader as its economic ties with China and Russia develop.
“Mineral exports to China and dollars brought in by North Korean workers sent to China and Russia would have driven the country’s GDP growth,” said Koh Yu Hwan, a professor of North Korean studies at Dongguk University in Seoul. “North Korea is expected to be economically stronger under Kim Jong Un as it continues to increase transactions with its allies.”
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Kim Jong Un has waged a nationwide campaign to “bring about a turn in agriculture” and increase crop yields, according to a June 7 report carried by the official Korean Central News Agency. North Korea’s agriculture and fisheries sector expanded 5.3 percent in 2011 while manufacturing fell 3 percent, according to the BOK report.
North Korea’s nominal GDP totaled 32 trillion won ($28 billion) in 2011, compared with South Korea’s 1,237 trillion won, the BOK said. North Korea’s per capita income was 1.33 million won while South Korea’s was 25 million won, according to its estimates.
After adjusting for inflation, North Korea’s economy remained smaller at the end of 2011 than it had been in 2008, according to the Bank of Korea.
The North Korean economy is undergoing changes. In fact, last year there was actually some growth, with GDP increasing .8 percent, versus a .5 percent decline in 2010. The North Korea GDP (about $28 billion, compared to $1,100 billion for South Korea). Thus even with a larger population, the average South Korean has 20 times more income as their northern counterparts. Moreover, income distribution is quite different in the north, where about two-thirds of the population is very poor and very hungry. The other third contains the well-fed ruling elite (whose lavish country estates can be seen via commercial satellite photos) and their supporters (secret police, military officers, bureaucrats) plus the semi-legal merchant class that has been allowed to develop over the last six years to avoid total economic collapse.
The economic decline in 2010, was the result of agricultural (floods) and industrial (massive power shortages) failure. But China came to the rescue by offering to set up mining operations in North Korea and buy billions of dollars-worth of minerals each year. China rebuilt railroads to handle the increased traffic from the remote North Korean mines. In addition, China offered legal jobs for North Koreans in China. The only catch was that the North Korean government took most of the pay. Similar deals have long been used with Russia but China offered far more jobs under more comfortable conditions. Competition for these jobs is fierce in North Korea and the government selects those deemed least likely to run away.
Last year North Korea bought more fertilizer for farmers and the weather was pretty good. That, plus the growing income from Chinese run mines and North Korean workers in China made up for the continuing declines in manufacturing. A good year on the farm is a big deal in North Korea, where farming and fishing are 23 percent of the economy (compared to under three percent in the south). But this year all of Korea is suffering from a record-breaking drought. This is hurting the north a lot more than the south. Although the monsoon (jangma) rains recenly arrived, a month late, the damage was already done in the north. Three months of very hot and very dry weather has seriously damaged crops. The rains will save some of them but at least a fifth of this year’s crops will be lost.
According to data released by a South Korean government-run think tank today, trade between North Korea and China during the first five months of this year increased 27.9% ($2.5 billion USD) over the same period last year.
The Korea Development Institute believes that imports into the North totaled $1.46 billion for the period, whereas exports to China increased 29% to total $1.05 billion, leaving North Korea with a $410 million trade deficit.
Much of the growth in North Korean exports lies in coal; anthracite, a compact mineral coal, now accounts for more than 58% of the country’s total exports, not to mention half of all Chinese imports during the period. China largely provided North Korea with energy products and machinery.
Excluding trade with South Korea, China accounted for 89.1% of North Korea’s total trade volume, the report reveals. Again, this is a dramatic increase over last year’s figure of 52.6%, showing Pyongyang’s growing reliance on trade with its only major ally.
Read the full story here:
Sino-NK Trade Trends Up Once More Daily NK
Clara Fontana
2012-7-20
