Archive for the ‘International Governments’ Category

The November 2016 North Korea sanctions: some perspective

Thursday, December 1st, 2016

By Benjamin Katzeff Silberstein

Responding to North Korea’s second nuclear test within one year in September, the United Nations adopted a new sanctions package yesterday, Wednesday November 30th. These are some of the main points:

  • By far, the most significant measure is a “cap” on imports of North Korean coal at $400 million or 7.5 million metric tons in a year, cutting its revenues by about $700 million per year. This is to supplement the current provision that coal can be imported when the proceeds go to livelihood purposes in North Korea, a provision that has proven to be a massive loophole (shocker!).
  • Four more minerals have been added to the sanctions list: copper, nickel, silver and zinc.
  • Exports of statues have been banned, targeting the somewhat peculiar North Korean practice of building statues in various African countries.
  • The resolution also limits the number of staff allowed at North Korean diplomatic missions, and forbids them from opening more than one bank account per person.

So what does this mean for the North Korean economy? Obviously, one shouldn’t speculate too much in advance. As always, China’s enforcement will be the main determinant. Here are some things worth noting:

First, while $400 million cap would certainly be a significant income loss for the North Korean regime, it might not be disastrous. It is worth remembering that North Korean government revenue from minerals exports already fluctuates heavily, since market prices do. Just for a sense of perspective, in 2015, North Korea’s export income stood at about $3 billion, and this was a decrease by 16.4 percent from the preceding year. In 2014, textile exports to China brought in around $800 million. Moreover, the $700 million revenue cut claim does not take into account the extent to which North Korea could make up for the loss through other sectors.

Second, the likelihood of full and consistent Chinese sanctions enforcement remains fairly low at best. Historically, we have seen a pattern where China will increase enforcement during certain time periods, or take single measures that receive a lot of attention (such as the Hongxiang inquiry) but where things return to normal pretty quickly. Case-in-point: the unusually strong sanctions from earlier this year, and the promises of Chinese enforcement, ending with record trade in coal. Obviously the “livelihoods” exemption provided a large enough loophole, particularly after the announcement by the US and ROK that THAAD will be deployed in South Korea. It is difficult to see why this cap would be impossible to circumvent. After all, China is (presumably) responsible for gather the data and for ringing the alarm bells when said cap is reached. (See also Adam Cathcart’s essay on the recent Sino-North Korean rapprochement at Sino-NK).

Third, and relatedly, history tells us that many, many factors other than the international sanctions regime determine Chinese imports of North Korean coal. Domestic demand is arguably far more important as a determinant than sanctions, as evident by the fact that declines in imports of North Korean coal often fluctuate much more with demand than with sanctions.

As always, we can only wait and see, but at the face of it, these new sanctions seem far from revolutionary.

(Update 2016-12-02)

Japan, South Korea and the United States have announced additional, multilateral sanctions independent from those by the U.N. Joshua Stanton over at One Free Korea argues that some of the measures potentially carry some real impact power. For example, they include North Korea’s national carrier Air Koryo. Moreover, they sanction China’s Hongxiang Industrial Development, making it the first time that a single Chinese company is directly targeted by South Korean sanctions. Yonhap:

“We have expanded the number of those subject to sanctions by adding to the list 35 entities and 36 individuals that are playing a critical role in developing weapons of mass destruction and contributing to the North Korean regime’s efforts to secure foreign currency,” Lee Suk-joon, the top official in charge of government policy coordination at the Prime Minister’s Office, told reporters.

Included in the blacklist were Choe Ryong-hae, a vice chairman of the Central Committee of the ruling Workers’ Party, and Vice Marshal Hwang Pyong-so, director of the military’s general political bureau, both of whom are regarded as close aides for North Korean leader Kim Jong-un.

The Workers’ Party and the State Affairs Commission were also added along with other entities suspected of supporting the regime’s efforts to export its coal and generate earnings.

In particular, Dandong Hongxiang Industrial Development and four of its executives were included on the list, marking the first time that a Chinese firm is facing South Korea’s unilateral sanctions.

The company is under investigation on suspicions that it exported aluminum oxide — a nuclear bomb ingredient — to the North at least twice in recent years. In September, the U.S. blacklisted it along with its owner and other company officials.

With the latest action by Seoul, a total of 79 individuals and 69 entities will be subject to sanctions in connection with the North’s nuclear programs. The government announced a blacklist in March as a follow-up move to the UNSC’s Resolution 2270 adopted in the wake of the North’s fourth nuclear test in January.

Any financial transactions with them will be prohibited, while their assets in South Korea will be frozen. The blacklisted people will also be banned from entering the country, which is seen as a symbolic action given that there are no exchanges between the two Koreas.

Other prohibitive measures include blacklisting the North’s state-owned airline Air Koryo on suspicions that it helps its regime transfer workers abroad, and move cash and other embargoed materials into the isolated country.

The Seoul government has also toughened its maritime sanctions by banning any ships that have traveled to the North within the past one year, an extension from the previous 180 days, from entering South Korean ports.

In addition, a watch list “tailored” to enhance the monitoring on activities related to the North’s submarine-launched ballistic missile capability will be prepared and shared with the international community, it said.

Full article:
S. Korea blacklists scores of N. Koreans, entities linked to nuke, missile program
Yonhap News
2016-12-02

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China building new DPRK border crossing in Jian

Thursday, November 17th, 2016

While the Dandong-Sinuiju “Bridge to Nowhere” gets plenty of coverage as a symbol of a growing rift between China and the DPRK, the two countries are working to improve two other vehicle crossings along their shared border. You can see map of these two border crossings below.

manpho-rason-overview

The new Rason Bridge (Quanhe-Wonjong Bridge) has finally been completed in the north-eastern most corner of the DPRK.

rason-bridge-2016-3-19

In the Google Earth image above (dated 2016-3-19) we can see the new four-lane bridge taking shape next to the older two-lane bridge it is replacing. According to more recent satellite imagery available at Planet.com, the bridge is actually completed. This new bridge was announced in June 2014.

But the border crossing that has been off most people’s radar is the new Manpho-Jian border crossing under construction right now.

jian-border-2016-9-29

Pictured above (Google Earth): Construction of the new border crossing in Jian, China. Image date 2016-9-29. The orientation has been reversed so that north is actually at the bottom of the picture.

You can read some background information of this new border crossing in an article I wrote for 38 North in May of 2015. I also just published some follow-up information in Radio Free Asia yesterday.

This border crossing is interesting because it is the reverse scenario of what is taking place in Dandong. Here the North Koreans built a new Yalu River Bridge and Customs House (completed in 2012), but the Chinese have only begun construction of reciprocal border infrastructure this year.

The Chinese also built a “Free Trade Zone” at the site of the new border crossing (similar to the Goumenwan Trade Zone in Dandong) in 2012-2013, though it has not yet opened for business. Additionally buses of Chinese tourists are crossing the border to visit Manpho in the DPRK’s Jagang Province, but it is unclear if any regular commercial traffic has already started using the route. Despite the light use of the new bridge, the new border has not officially opened (scheduled to open in the spring of 2017).

Looking at the new satellite image above we can see that a new “gate-shaped” customs house is under construction at the terminus of the new Yalu/Amnok River bridge. On either side of the customs office new buildings are under construction. Just north of the bridge we can see the completed “free trade zone” (in the center of the picture) and what appears to be a shipping warehouse nearing completion (on the right side of the picture).

UPDATE: In YTN coverage of my report in RFA, they offered recent pictures of the new Chinese border buildings in Jian:

jian-bldg-1-ytn

jian-bldg-2-ytn

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North Korea exporting sand, gravel and coal to China from Sinuiju

Tuesday, November 15th, 2016

Benjamin Katzeff Silberstein

An interesting example of how the transition from state-owned to private enterprise impacts the workings of certain firms. Daily NK:

North Korean ships from Sinuiju, North Pyongan Province are reportedly exporting in excess of 100 tons of sand and gravel into China each day.
“Shipping firms from Sinuiju are earning foreign currency through contracts with private Chinese construction businesses. The North Korean authorities are supporting the operations after receiving orders to finance the export of coal and sand to China. They are also providing wages and food for the workers,” an inside source from North Pyongan Province told Daily NK on November 11.
Additional sources in North Pyongan Province corroborated this information.
The source added that although the city’s shipping industry was originally a state enterprise, that is no longer the case. The industry is now run by private enterprises that deal with the domestic and Chinese markets. When the operations were state owned, there were chronic shortages of capital and sailors were forced to use sub-standard vessels. The regime’s new policy – to let the industry rehabilitate itself through benign neglect – has allowed the businesses to revitalize themselves. By exporting sand across the Yalu River into China, these businesses have earned enough capital to purchase better vessels. A number of enterprises and the associated infrastructure has grown as a result.
“As the volume of sand exported continues to rise, the shipping companies are inducing more service providers and factories to participate in the industry. The Anju Country 105 Sand Factory collects sand from the Chongchon River and transports it by way of the Yalu River to the shipping firms,” the source added.
When asked about the scale of the trade, she noted, “Sinuiju Harbor sees a daily influx of Chinese boats that carry away more than 100 tons of sand and gravel. Because exports are continuing to climb, the shipping firms are using the capital to enter new industries such as coal export.”
The North Korean enterprises see sand as an inexhaustible natural resource, the source explained, adding, “The more we sell, the better quality sand we can bring in. The enterprises are doing quite well for this reason. The factory cadres are accumulating vast sums of money, and continue to look for ways to increase their profits.”
The flourishing business has also improved prospects for workers. Laborers in the sand and gravel collection factories can earn enough money to put food on the table for a family of four – with food provided to them plus approximately 50,000 KPW per month (U.S. 6.14) for extras.
“The authorities are also using the opportunity to generate propaganda about the generosity of ruler Kim Jong Un,” the source asserted.
The revitalization of the sand collection industry is a positive development from the point of view of the authorities, as all Yalu River sand enterprises are first and foremost responsible for the supply of Kim Jong Un’s pet construction projects, such as the Ryomyong Street Project.
“The authorities can simply sit back and relax as they receive money, supplies, and credit for the success of the sand business. This reveals that the solution to North Korea’s problems is freedom of the market,” she added.
As exports continue to increase, the donju (North Korea’s nouveau riche) have expanded the scope of their interests and investments. “First, they purchase a large boat. Next, under the pretense of being a shipping business, they start to branch off into other industries to make more money. The factories give the donju the authority to do the trading and receive 30% of the profits in return,” the source concluded.
Full article:
NK exports 100 tons of sand, gravel, & coal daily from Sinuiju Harbor
Seol Song Ah
Daily NK
2016-11-15
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A hole in the sanctions, big enough to drive missile equipment through?

Thursday, September 22nd, 2016

By Benjamin Katzeff Silberstein

Says Daily NK (with my emphasis):

Chinese authorities are said to be questioning the head of a local trade company in Liaoning Province for allegedly smuggling materials used for nuclear and missile development into North Korea. The owner and founder of Hongxiang Industrial Development based in the border city of Dandong, Ma Xiaohong, was arrested and has been under investigation for a number of weeks,  Daily NK has learned.
“Ma was arrested by Shenyang law enforcement earlier this month and is currently being questioned on suspicions of disguising military goods and equipment banned under global sanctions and smuggling them into North Korea,” a source close to North Korean affairs in China told Daily NK. “Despite the more stringent screening procedures at the customs office that were introduced from March, Ma’s company continued to smuggle banned metal and tank battery components, hiding them in shipments of apple boxes [wherein some boxes contained apples and others contraband].”
The source reported that Ma’s company also sold weapons manufacturing tools, selling dozens at a price of 10 million RMB (1.5 million USD) per piece to North Korean military contacts. By aggressively exploiting the UN sanctions for its own benefit, the firm was able to rake in huge sums of money, the source asserted.
“The profits that Ma accumulated from trading with North Korean defense companies were actually smuggling payments,” the source said. “By providing sanctioned items, Ma made so much money that she even gave Toyotas and imported cars as gifts to some North Korean cadres and Chinese traders.”
The investigation comes at a time when Beijing has come under greater scrutiny for its cross-border interactions with the North after Pyongyang defied strong UN sanctions passed in March and conducted a fifth nuclear test on September 9. Due to the recent nuclear test, some believe that the Chinese government is now moving quickly to conclude the investigation and make the results public, holding Ma’s company accountable for UN sanctions violations.
“Dozens of cadres working for Dandong’s government agencies have been instigated during Ma’s testimony, so it doesn’t look like this will have a simple conclusion,” said an additional source in China with knowledge of the incident. “Seven 5,000-ton ships operated by this company have been impounded and are moored at Donggang Port, while all of the companies that were doing business with Hongxiang are also under investigation.”
In addition, the customs office in Dandong is expected to undergo an extensive reshuffle after failing to stop banned goods on the sanctions list flowing into the North. Some 30 individuals are under investigation in relation to the case, with the central government keeping close tabs on how the events are unfolding, reported the source.
On Monday, The Wall Street Journal reported that U.S. and Chinese officials are targeting Hongxiang Industrial Development for its suspected involvement in criminal activities while aiding the North. It reported that prosecutors from the U.S. Department of Justice visited Beijing last month to inform Chinese authorities of the case, citing evidence that Ma and her company had helped Pyongyang in its nuclear development and in circumventing global sanctions.
One might wonder why the Dandong customs office would only undergo such a reshuffling now. Reports of lax sanctions enforcement have been forthcoming fairly continuously since sanctions were adopted after the 4th nuclear test — perhaps the 5th changed matters, at least for the time being.
Full article:
Hongxiang Industrial Development circumvented sanctions using apple boxes
Seol Song Ah
Daily NK
2016-09-21
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Pyongyang under UN Sanctions

Tuesday, August 30th, 2016

Institute for Far Eastern Studies (IFES)

There has been much interest in Kyodo’s (a Japanese wire service) reports on the atmosphere in Pyongyang following the imposition of sanctions on North Korea back in March by the UN Security Council. According to Kyodo’s ‘current report’ on the subject from August 21, ‘200 Day Speed Battles’ and ‘Mallima Speed Creation’ slogans can be seen in many of Pyongyang’s streets.

While surprisingly Pyongyang appears unchanged following UN sanctions, the entire nation is subject to a general labor mobilization. The 200 day speed battle began in June and aims to raise food production. Mallima Speed Creation is a slogan created to inspire workers to engage in productive activities at the same speed as a horse that can cover 10,000 li (around 3,927 km) in a day.

Construction of the frame for a 70-storey apartment block on Ryomyong Street, which began after the announcement that the block would henceforth be a site to house educators, has almost been completed. There are large tour groups to be seen at the Nature Museum and Central Zoo (the construction of both was completed last month). The Nature Museum, with its models of dinosaurs and taxidermied animals, is particularly popular, with a member of staff reportedly saying “there is a daily limit of 6,000 on the number of visitors admitted, and we have to turn people away every day.”

The Mirae Shop, a department store refurbished and reopened in April, has a tidy display of imported cosmetics and electrical appliances, but is largely devoid of visitors. A member of staff explained that “because people are busy with the 200 day speed battle, there are not many customers.” The Kyodo report thus argues that the effect of sanctions on Pyongyang is as yet limited.

The Kyodo report also includes an interview with Kim Cheol (43), the head of the Economic Research Centre in North Korea’s Academy of Social Sciences. In the interview, Kim Cheol asserts that “the North has hewed to a line of constructing a self-sufficient economy, and therefore the [UN and other] sanctions have very little impact.” Kim offered an optimistic vision: “struggles to increase the proportion of facilities and raw materials sourced domestically continue. . . . With or without sanctions, with our energy and technology we shall construct an economy with a high degree of self-sufficiency.”

With respect to last year’s food production figures, he said that “though they have not been released, the price of rice remains the same as last year, while other cereals are around 65~70% the price they were last year. . . . Given price fluctuations, it is estimated that food production has increased.”

Regarding the supply of and demand for electricity, he stated that “while we cannot fully satisfy demand, the development and introduction of coal additives in coal-fired power stations has dramatically increased production. . . . Many hydroelectric power stations making use of rich hydropower resources have been constructed.” Hence it can be inferred that while electricity supplies remain insufficient, they continue to increase.

Moreover, with respect to effect of coal export bans, Kim said that “the development of the economy is on an upward trajectory, so actually coal resources are needed more inside the country. . . . Improvements are aimed at raising the proportion of domestic production [in all areas] thus raising the proportion of resources used within the country.” At the same time though, he acknowledged that “because of a reliance on imported oil products like kerosene and airplane fuel, there certainly has been some impact.”

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North Korea’s natural resources and the “Five-year Plan”

Monday, August 29th, 2016

By Benjamin Katzeff Silberstein

North Korea’s natural resource and minerals issue runs as a clear thread throughout its economic past and present. On the one hand, they provide immense wealth (not least through export revenues), but on the other hand, the leadership has often been wary of letting their role grow too large. Moreover, it appears that the North Korean leadership, both at various times in history and in recent years, has seen individuals scrambling to amass personal wealth through mineral exports as a danger to state incomes and economic control. Recall that one of the accusations against Jang Song-taek was that he sold off the country’s natural resources to “foreign countries” for cheap.

In a brief from the beginning of the month, IFES analyzes Rodong Sinmun coverage of the role of natural resources in implementing the five-year plan for economic development, the details of which are yet to be revealed:

Kim Jong Un has appealed for all energy to be put into developing underground resources in order to implement the ‘Five Year State Economic Development Strategy’ (unveiled at the 7th Party Congress of the Workers Party of Korea held in May).

In reporting that appeared in Rodong Sinmun on July 13, 2016 it was asserted that “The task of developing and using underground mineral resources effectively to raise self-sufficiency and independence lies in front of party members and workers who are vigorously participating in a 200 day speed battle to make a breakthrough in the implementation of the Five Year State Economic Development Strategy in the country, which is known worldwide for its minerals.”

Self-sufficiency and natural resource dependence have often been highlighted in North Korean economic publications as mutually exclusive. Presumably, Rodong Sinmun advocates that natural resources be used for economic production through fuel and the like, rather than merely for export incomes.

It went on to urge that “with the close collaboration between the state resources development sector and scientific research groups, all resources must be concentrated on prospective and current surveys (surveys that measure mineral reserves) to ensure that the Five Year State Economic Development Strategy succeeds.”

It added, “energy must be put in to find more as yet undeveloped potential sites for development . . . reserves must be secured to ensure that mine production continually rises.”

It also emphasized that “all illegal extraction of underground mineral resources by [production] units, factories and collective organizations for the benefit of their own unit alone must be gotten rid of . . . [and] the role of institutions supervising and controlling underground resources and environmental protection must be strengthened.”

In other words, incomes from mineral extraction should go to the central government, and individuals trying to exploit the expanding opportunities for private business activity to generate personal profits through mineral exports should be kept under control.

Admittedly, the paper also demanded natural tourist attractions be protected: “the staff of supervisory institutions must engrave deeply in their hearts the earnest wish of the Great Leader by not developing Mount Kumgang and Mount Myohyang, regardless of how large the underground mineral deposits are there, and hand down their beautiful scenery and nature to posterity.”

At the aforementioned 7th Party Congress, Kim Jong Un unveiled the ‘Five Year State Economic Development Strategy’, and also set out to revolve energy problems and strengthen the self-sufficiency and independence of the people’s economy.

Full publication here:
Mobilizing “All Energy in Securing Underground Resources” to Implement Development Strategy
Institute for Far Eastern Studies
2016-08-01

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Orphan Information: Pyongyang Bio-Technical Institute

Tuesday, August 23rd, 2016

I have a lot of information laying around that I intend to use in publications, but sometimes that information doesn’t make it out the door where it can do other researchers any good. To help fix this I have put together a three-part “Orphan Information” series to remedy the problem.

This is part 1, and it features additional information on the Pyongyang Bio-technical Institute run by Korean People’s Army Unit 810 which was the subject of an article in 38 North by Melissa Hanham in July 2015. The information below helps to clarify the history of the facility and offers more hints as to its uses.

The facility has gone by two previous names in North Korea (of which I am aware): First it was known as the Patriotic Complex Microbial Center, then it was changed to the Vitamin C Factory at the Pyongyang Biotechnology Center. The current name is probably the third (in English).

Patriotic Complex Microbial Center (애국복합미생물센터) (Date Range: June 1997 – December 2010 [appx])

Aeguk-microbioal-2010-10-6

Pictured Above (Google Earth): Patriotic Complex Microbial Center (2010-10-6)

I have uploaded to YouTube two videos of the facility that were broadcast on North Korean Television.

This video was broadcast on 2010-6-8:

This video was broadcast on 2010-12-29:

I have not had either video translated, so if you speak Korean and think there is anything interesting in these videos, please let me know.

The NTI web page has the most complete description of the facility of which I am aware:

The Aeguk Compound Microbe Center was founded in June 1997 pursuant to Kim Jong Il’s orders for the creation of microbial fertilizers suitable for North Korea’s geographical conditions. Any connections to the North Korean program are unclear, but the center was built with assistance from Choch’ongnyŏn (Chosen Soren), the pro-North Korea General Association of Korean Residents in Japan. Almost all facilities with the designation “Aeguk (애국)” have been established with assistance from overseas pro-North Korean residents. The facility was expanded in April 1999 when the Compound Microbe Technical Research Station was established. The Aeguk Compound Microbe Center produces microbial stock (원균) in a liquid solution, and supplies the stock to compound microbial fertilizer factories throughout the country, which in turn produce microbial-based fertilizer supplements. According to the Pyongyang Times, the Aeguk Compound Microbe Center also assists farms in applying compound fertilizer produced at these factories. There are reportedly over 120 compound microbial fertilizer factories (복합미생물비료공장) in North Korea including the following:

  • Chŏngju Aeguk Compound Microbial Fertilizer Factory (정주애국복합미생물비료공장): Chŏngju (정주시), North P’yŏng’an Province (평안남도)
  • Hamhŭng Aeguk Compound Microbial Fertilizer Factory (합흥애국복합미생물비료공장): Hamhŭng (함훙시), South Hamgyŏng Province (함경남도)
  • Hamju Aeguk Compound Microbial Fertilizer Factory (함주애국복합미생물비료공장): Hamju-kun (함주군), South Hamgyŏng Province (함경남도)
  • Kae’p’ung Compound Microbial Fertilizer Factory (개풍애국복합미생물비료공장): Kae’p’ung-kun (개풍군), Kaesŏng (개성시)
  • Kwaksan Aeguk Compound Microbial Fertilizer Factory (곽산애국복합미생물비료공장): Kwaksan-kun (곽산국), North P’yong’an Province (평안북도)
  • P’anmun Aeguk Compound Microbial Fertilizer Factory (판문애국복합미생물비료공장): P’anmun-kun (판문군), Kaesŏng (개성시)
  • Man’gyŏngdae Aeguk Compound Microbial Fertilizer Factory (만경대애국복합미생물비료공장): Man’gyŏngdae-kuyŏk (만경대구역), Pyongyang (평양시)

As of 2000, the chief of the Aeguk Compound Microbe Center was Kim Ung Ho, who was also chairman of the DPRK Invention Committee.

Vitamin C Factory (비타민C공장)

In early 2011 construction began around the Patriotic Complex Microbial Center. When construction was completed, North Korea announced the Vitamin C Factory.

Vitamin-C-2013-12-1

Pictured Above (Google Earth: 2013-12-1): “Vitamin C Factory”

As you can see from comparing the images of the Patriotic Factory and the Vitamin C Factory, there was a substantial amount of work completed; however, the original building was not torn down, though its exterior (and probably interior) have been altered.

KCNA noted that the plant opened on August 9:

Pyongyang, August 9 (KCNA) — The Vitamin C Factory has been commenced with due ceremony on Friday. It was built on the bank of the River Taedong in Pyongyang.

The vitamin C producing base has the latest production processes that use bioengineering methods.

The factory helps make another achievement in carrying out the behests of leader Kim Jong Il, who worked heart and soul to improve the standard of people’s living, and will greatly contributing to promoting health of the people.

Present at the ceremony were Pak Pong Ju, Choe Thae Bok and officials concerned, officials of different units, builders, youth shock brigade members and officials and employees of the factory.

Pak Sun Chol, general director of the Korean Taeyang General Company, made an address.

At the end of the ceremony the participants went round the factory.

Here is the KCNA video that accompanied the story above:

KCTV evening news featured the opening of the plant on 2013-8-11 (start at the 3:03 mark) to view:

On August 16, 2013 construction of the factory was touted as a successful fulfillment of Kim Jong-un’s new year address:

Pyongyang, August 16 (KCNA) — Marshal Kim Jong Un, in the 2013 New Year Address, set the building of a strong economy as a key issue in accomplishing the cause of building a thriving socialist nation.

In response to his New Year Address, the people in the Democratic People’s Republic of Korea have made fresh upsurge in all economic sectors in the spirit of the “Masikryong Speed”.

Readjustment of the West Sea Barrage-Sinchon-Kangryong and Ongjin waterways was finished in ten days, while more than 1,000 hectares of fruit field has come into being in Pukchong County, South Hamgyong Province.

The Pyongyang Essential Foodstuff Factory and the Phyongsong Synthetic Leather Factory have become streamlined and the Vitamin C Factory and the Turf Research Center of the State Academy of Science were newly built on a modern basis.

On August 20, 2013, KCNA for the first time published the name of the “Pyongyang Biotechnology Center” (평양생물기술연구원) as the name of the complex of which the Vitamin C Factory was a component:

Pyongyang Biotechnology Center

Pyongyang, August 20 (KCNA) — The Vitamin C Factory was modernly built at the Pyongyang Biotechnology Center located on the bank of the River Taedong.

With the operation of the factory, the center has developed into a comprehensive microbe fermentation researcher base and producer vital to developing agriculture, light industry and public health.

The center has turned out agrochemicals, anti-oxidation drinks EM-X, microbe fermentation accelerants, water purifier, digestive, etc.

All of those products are highly appreciated at home and abroad.

The center also has a biotechnology institute, compound microbiological fertilizer factory and experimental factory.

Neither the “Vitamin C Factory” nor the “Pyongyang Biotechnology Center” are ever mentioned again in the English-language state media.

The Korean name of the “Pyongyang Biotechnology Center” (평양생물기술연구원) appears in this Naenara article dated 2015-6-24.

Finally, the facility re-branded in the English-language state media when Kim Jong-un visits the “Bio-Technical Institute Under KPA Unit 810” in July 2015. The Korean name is virtually unchanged, though “under KPA Unit 810 is added”: 조선인민군 제810군부대산하 평양생물기술연구원

And now you know….the rest of the story.

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China shuts down part of Dandong-Sinuiju bridge [UPDATE: Delayed]

Wednesday, August 17th, 2016

UPDATE 1 (2016-8-23): Whether true or not, the Daily NK now reports that the bridge closing has been delayed. According to the article:

Necessary repair work on the North Korean side of the bridge connecting the country with China over the Amrok (Yalu) River has been delayed following a last-minute plea by the North Korean authorities, Daily NK has learned.

A source in North Pyongan Province close to the issue told Daily NK on August 22 that Pyongyang cited pressing foreign-currency shortages in its request to the Chinese authorities to put off the month-long maintenance period, scheduled to commence on August 20.

“The Chinese Railway Ministry warned of ‘imminent and severe accidents’ if the bridge [on the North Korean side] remains in its current state of disrepair, ” the source said, “but the North Korean side refused to give in [and begin the repairs] and so customs is still operating normally.”

It is not yet known when the repair work will get underway. “Trading companies were told to operate normally, and affiliated vehicles are increasingly ignoring imposed freight loads limits in a bid to transport the greatest volume of goods possible, the source said.

According to a source close to the issue in China, notwithstanding the maintenance delay, China will continue to exert pressure on North Korea to carry out the repairs on its end. As such, trading companies are overloading vehicles with goods to hedge against the economic losses expected during the repair period.

“Trading companies interpret the ambiguous start date for repairs as an ominous sign. They know that the ax could drop at any time, and that obviously makes it difficult to plan. This notion has ushered in a flurry of trade activity, which in turn evokes a very different environment to the restrictive one palpable following the sanctions implementation,” the North Pyongan-based source concluded.

ORIGINAL POST (2016-8-17): by Benjamin Katzeff Silberstein

A small reminder that border traffic flows can be impacted by other factors than sanctions and policies:

On the heels of a fleeting reopening, China has suspended road traffic and customs operations on the Sino-North Korean Friendship Bridge until critical risks are mitigated on the North Korean side. The move will greatly challenge North Korea’s foreign-currency operations, which lean heavily on Sino-North Korean trade, 70 percent of which flows through the connecting overpass.

“China ordered the repairs after discovering additional risk factors on the North’s side despite the construction work carried out from July to earlier this month,” a source from North Pyongan Province said, adding that construction will begin August 20.
“China’s railway officials detected these dangers, and, in no uncertain terms, demanded the cessation of vehicular transport and the commencement of large-scale restorations.”
This news was corroborated by additional sources in North Pyongan Province.
Saddled with rigid foreign-currency quotas, this is most distressing for North Korean trading companies, she added. And with the prohibitive costs involved in sea transport, these entities are left with little in the way of viable transport alternatives; the railway connection adjacent to the road will remain operational for the duration of the repairs but only for small loads.
The looming trouble Pyongyang faces is, in many respects, self-inflicted– the culmination of securing leadership funds at the expense of vital safety regulations. The recent decision to haphazardly patch over problem areas, rather than administering thorough repairs, despite compelling precedent, being a case in point.
When a truck overturned last year, weight limitations were introduced but remain rarely enforced, particularly for mineral-laden trucks, the most frequently overloaded vehicles.
“Overloading is of little concern the North Korean leadership,” the source asserted. “Their focus is solely on securing enough money, and because they don’t bat an eye about violating customs regulations, trade companies load on as much as they can.”
By unilaterally calling for a traffic block on the bridge, China may be hoping to wrangle North Korea into finally upholding its end of a mutually-beneficial deal sitting just downstream. China invested 340 mil. USD for the new bridge, completed in 2014, but North Korea has yet to build the necessary connecting infrastructure on its side.
Full article:
China shuts down road traffic on Sino-NK bridge
Seol Song Ah
Daily NK
2016-08-17
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DPRK – China Trade in 2016 (UPDATED)

Monday, August 15th, 2016

UPDATE 13 (2016-8-25): According to the Korea Herald, China’s exports to North Korea showed the largest on-year drop in July:

According to KITA, China’s exports to North Korea came to US$193 million in July, plunging 27.6 percent from the same month last year. Last month’s decrease is the biggest drop in China’s exports to North Korea this year.

Along with exports, China’s imports from North Korea also dropped by 5 percent from a year ago to come in at US$227 million, the data showed.

KITA attributed the changes to China’s sanctions against Pyongyang, and to North Korea’s dwindling foreign reserves.

China has been limiting trade with North Korea since April.

UPDATE 12 (2016-8-24):  According to Yonhap, China’s imports from DPRK fell in q1 2016 (before US/UN sanctions passed/implemented) compared with previous year:

China’s northeastern province of Jilin saw its imports from North Korea plunge nearly 15 percent in the first quarter of 2016 from a year ago, data showed Wednesday, dealing a fatal blow to the neighboring country’s moribund economy.

According to the Chinese customs data, Jilin’s trade with North Korea sank 14.7 percent on-year to US$176 million in the January-March mainly because of plunging imports.

Jilin, which borders the North’s three provinces, is China’s hub of trade with its ally and boasts the largest trade volume with Pyongyang among China’s provinces.

Jilin’s imports from North Korea came to $66 million in the three-month period, down 33.8 percent from a year earlier. Tumbling imports of such major items as iron ore, clothing and fisheries goods led the drop.

Imports of North Korean iron ore dipped 19.3 percent on-year to $7.28 million in the first quarter, with those of clams, T-shirts and functional clothing nose-diving 25 percent to 73 percent.

China experts said Jilin’s imports of iron ore from North Korea fell sharply in the first quarter due to sluggish demand from China in the wake of Beijing’s move to eliminate its steel overcapacity.

U.N.-led international sanctions on North Korea for its nuclear and missile programs seemed to play a part as well. Pyongyang conducted its fourth nuclear test in January and has test-fired a series of ballistic missiles in recent months.

The Chinese province’s imports from North Korea are estimated to have dropped further in the second quarter when the sanctions began to bite, they added.

“A tumble in trade with Jilin comes as a serious blow to North Korea as it relies heavily on exports of minerals to the province for external trade,” a North Korea watcher said.

Meanwhile, North Korea’s overall trade with the world’s largest economy dropped 9.3 percent on-year to $2.31 billion in the first half of this year, with exports and imports falling 3.1 percent and 16 percent each.

UPDATE 11 (2016-8-19): NK News reports on the DPRK – China coal trade:

But in April, Chinese imports of the high-quality smokeless coal anthracite from North Korea plummeted, according to data from the Korea International Trade Association (KITA) in Seoul which sources Chinese import receipts. Shipments of 1.525 million tons were down 35 percent – albeit compared to record highs in March – and 21 percent compared to the same month last year/compared to April last year.

Then, after just one month, Beijing’s toughness on Kim Jong Un appeared to dissipate. Since April, Chinese imports of North Korean coal – worth 40 percent of total export earnings – have begun to return to normal levels.

In May, imports of anthracite were up 1.7 percent on the low of the previous month but still down 15 percent on May 2015, KITA data showed.

This recovery continued into June. China’s imports of anthracite rebounded nearly 22 percent, coming out of the trough of April and May, and were down just 5.6 percent on May 2015.

While China is trying to cap and reduce coal use – consumption fell for the second year in a row in 2015 – its demand for anthracite to produce metals remains high.

China’s total coal imports slumped 30 percent last year as the government emphasized other cleaner energy sources. This, in turn, pushed down the domestic price of coal, also by 30 percent, and as a result, imports were less competitive and shipments to China dropped.

But while Chinese coal imports from key suppliers Australia and Indonesia plummeted last year, there was one source country that recorded a 25-percent surge in shipments: North Korea.

“This type of coal is in shortage and, in fact, North Korea is the largest supplier of this type of coal to China,” she said.

This complex picture has produced confusing and often contradictory reports on China’s sanctions enforcement previously, and especially since Resolution 2270 passed in March. What has become clear, say observers, is that North Korean coal is increasingly reaching China which has, at the same time, turned down negative rhetoric against North Korea. Meanwhile, China remains keen to create the impression it is enforcing UN sanctions as part of its international commitments.

UPDATE 10 (2016-8-14): Yonhap reports that N. Korea-China trade showing signs of revival:

Lim Eul-chul, research professor at Kyungnam University’s Graduate School of North Korean Studies said that his contacts in China have hinted that while Chinese customs offices ostensibly claim they are adhering to the United Nations Security Council (UNSC) resolution restricting transactions with Pyongyang, there has been a noticeable easing in oversight by authorities.

“Chinese companies who had held back on trading with the North, have started to ship more goods after hearing the news that Seoul-Beijing relations have taken a turn for the worse over the THAAD issue,” the scholar said.

He also said that there have been reports of greater traffic moving between the country at night and early morning hours. Lim said that taking into account the customs office operating hours, the flow of traffic at such hours could indicate the illegal movement of goods.

This view was echoed by Cho Bong-hyun, an analyst at the IBK Economic Research Institute, who said that people living in the Sino-North Korean border region are saying customs inspections have become lax along the Sino-North Korean border.

“There is even speculation that banned items are being disguised as products that are not subject to the UNSC sanctions and are being traded,” he said.

Reflecting this, two-way trade data between the neighboring countries support this.

Official customs data released by China showed bilateral trade hitting US$503.77 million in June, up 9.4 percent on-year, and the first rebound just three months after Beijing said it will clamp down on trade. The increase is significant because it took place before the THAAD deployment was announced.

According to U.S.-based Radio Free Asia (RFA), people in Liaoning Province said that the number of cargo trucks coming out of North Korea on a daily basis has jumped twofold to 20 from just 10 two months earlier.

“While trucks only arrived twice a week from North Korea to China just a few weeks ago, they are currently arriving every day, which may be neutralizing the international sanctions,” the media outlet citing a source said. The local said that the traffic involved container trucks.

UPDATE 9 (2016-8-14): Japanese media reports that oil exports to the DPRK have increased:

Japan’s Yomiuri Shimbun daily says that China’s oil supply to North Korea appears to have increased.

The daily said on Sunday that freight trains traveling from the oil storage facility in Dandong to the Daqing oil field operated once a day when the United Nations sanctions against the North were imposed, but the number increased to two to three times a day from late June.

The paper speculated that the change reflects China’s concerns that the Kim Jong-un regime might become unstable under continued international sanctions following the North’s missile launches and nuclear tests.

UPDATE 8 (2016-8-12): The information should be taken with a grain of salt, but according to the Daily NK:

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.

The number of trucks coming out of the North to Dandong has also climbed, energizing trade and overall activity in the border area–so much so, in fact, that some residents have asked whether sanctions on the North have been lifted. Others speculate the reversal is a form of retaliation from Beijing against Seoul for deciding to deploy the U.S. missile defense system THAAD to the South.

UPDATE 7 (2016-8-2): N. Korea’s exports of unsanctioned resources to China jump in first half of 2016. According to Yonhap:

North Korea’s shipments of natural resources to China that are not on the United Nations’ sanctions list sharply increased in the first half of the year, nearly making up for a decline in shipments of products prohibited by the U.N., a report showed Saturday.

Shipments of five mineral resources from North Korea to China came to US$78.2 million in the first six months of the year, up 50.3 percent from the same period last year, according to the report from the North Korea Sources Institute in Seoul.

The five minerals are lead ores, zinc ores, spelter, magnesia and cooper ores, which are not on the U.N. list of goods prohibited from access to or from the communist state.

The sanctions, under the U.N. Security Council Resolution 2270, were issued in response to North Korea’s defiant nuclear test in January and a long-range missile launch the following month.

In the January-June period, China’s imports of seven mineral resources from the North that are prohibited under the U.N. resolution plunged 15.7 percent on-year to $547.2 million. Such a drop accelerated in the second quarter, plunging 25.6 percent on-year as the U.N. sanctions were put in place in March.

The prohibited items include coal and iron ores.

An institute official, however, noted the drop in China’s imports of North Korean minerals may have come from a dip in China’s own demand for the said natural resources, adding the cut in imports may not necessarily indicate that China is faithfully implementing U.N. sanctions.

China is the North’s largest communist ally.

Meanwhile, the think tank estimated North Korea’s total coal production for 2015 at 33.8 million tons, up 12.2 percent from a year earlier. It put the estimate of the country’s iron ore production at 4.26 million ton for 2015, down 25 percent year-on-year.

UPDATE 6 (2016-7-25): Leo Byrn wrotes about DPRK-China trade in NK News:

Volumes of anthracite shipped to China in June increased from 1.5 million tonnes to 1.8 million. The number is higher than both January and February export totals and consistent with a recent trend which saw North Korea export more coal to its neighbor in order to combat low commodity prices.

Chinese traders paid their North Korean counterparts over $88 million for the coal in June, a $14 million increase over the previous month. While the figures are down compared to their March equivalents, those were record exports for the DPRK at 2.3 million tonnes.

Shipments of North Korean iron ore showed an even more pronounced rise after the UN passed Resolution 2270. While volumes are smaller, North Korean iron ore exports increased more than 100 percent between April and May.

June’s exports also increased, but at a slower rate to over 221,000 tonnes. The number is more than double the March export figure, and continues a theme of month on month increases beginning in April.

Exactly how Beijing has set about enforcing the new sanctions is currently unclear. Resolution 2270 contains an exception allowing iron and coal imports provided the revenues do not contribute to the North’s weapons programmes.

But how the process works is currently vaguely defined, and it is unknown how authorities would ensure cash flows from commodity exports go where intended.

The increasing exports could also be the result of traders playing out existing contracts, or arise from the difficulties in rapidly shutting down large scale trade.

UPDATE 5 (2016-06-22): China’s imports of North Korean goods fell 12.59 percent on-year in May

By Benjamin Katzeff Silberstein

Says Yonhap, citing KOTRA data:

China’s imports of North Korean goods fell 12.59 percent on-year in May, data showed Wednesday, amid tougher U.N. sanctions against Pyongyang’s nuclear weapons and missile programs.

Imports from North Korea declined to US$175.6 million last month, compared to $200.9 million for the same month last year, according to Chinese customs data compiled by the Beijing unit of South Korea’s Korea Trade and Investment Promotion Agency (KOTRA).

Imports of North Korean coal, which accounts for nearly half of the North’s annual exports to China, plunged 28.3 percent on-year to $74.7 million in May, the data showed.

China’s exports to North Korea also fell 5.9 percent on-year to $239.3 million last month, according to the data.

However, these numbers suffer from the same problems that often plague trade data on North Korea. We don’t know 1) how much of the decrease is caused by a general, global drop in world market prices for North Korea’s export goods, and how much is an actual, quantitative import decrease, and 2) how much of the drop would have counterfactually happened “anyway,” given the contraction of Chinese industries using North Korean coal.

Full article:
China’s imports of N. Korean goods fall 12.6 pct in May 
Kim Deok-hyun
Yonhap News
2016-06-22

UPDATE 4 (2016-6-3):  The Institute for Far Eastern Studies (IFES) also comments on the April 2016 trade statistics.

China Decreased Imports from North Korea in April by 22.3 Percent

Last month, imports from North Korea to China plunged more than 20 percent below that of the same period last year. April is the first month for China to begin the implementation of sanctions against North Korea adopted by the UN Security Council resolution. China’s sanctions against North Korea have a notable effect.

KOTRA Trade Office in Beijing released the official DPRK-China trade statistics of Chinese Maritime Customs Service on May 14. According to this report, China’s total import volume from North Korea in this period recorded 161,380,000 USD, down 22.35 percent compared to April last year. By item, imports of coal decreased by 38.34 percent while lead imports were reduced by 16.12 percent. There were no titanium imports as China listed titanium as one of the banned exports from North Korea.

However, iron ore is one of North Korea’s main export items along with coal. Unlike lead and coal, the import of iron ore increased 19.38 percent, and zinc import jumped a whopping 685 percent. In this regard, China appears to have decreased coal imports to deal with domestic overproduction problem of coal while increasing the imports of other minerals and under the suspicion that it is imposing sanctions on North Korea only on the outside.

China’s exports to North Korea recorded insignificant decrease of approximately 1.53 percent, with a total volume of 268,000,000 USD. Refined oil including jet fuel was identified to have decreased 6.11 percent compared to the same period last year. Exports of freight cars and electronic equipment decreased 45.46 percent and 43.95 percent, respectively, while agricultural and clothing items were not much affected.

As a result, the total of DPRK-China trade volume decreased 10.54 percent compared to last year, at 429,410,000 USD. Last month on April 5, China’s Ministry of Commerce announced 25 banned items of import and export to and from North Korea. This is about a month since the resolution on North Korean sanctions was passed. Since then, China immediately began to impose sanctions.

In the list of import bans, there are a total of 20 items, including coal, steel, and iron ore, along with gold, titanium, vanadium ore and other rare earth minerals as classified by maritime customs. Prior to the sanctions, DPRK-China trade in March recorded 490,000,000 USD in trade volume, which was an increase of approximately 20 percent compared to the previous year.

As China continues to impose sanctions on North Korea, North Korea can be expected to suffer a significant setback in its foreign currency earnings.

UPDATE 3 (2016-5-25): DPRK – China trade Jan 1 – April 30 2016:

Preliminary estimates of trade volume between DPRK and China through April 30 total appx $1.597 billion ($4.791 annualized, 11.7% decrease from 2015).

DPRK imports/Chinese exports total $862 million, and DPRK exports/Chinese imports total $735 million. So we can see a bilateral trade deficit in Jan-April 2016 of appx $127 million ($381 million at annualized rate vs $460 million in 2015).

Chinese enforcement of UNSC Resolution 2270 reportedly began in April, in which China reports it’s DPRK imports total US $161 million (down 22.3% from April 2015). Coal imports at $72.2 million (down 38.2% from April 2015 total of $116.6 million), gold imports $250k (down 91.1% from April 2015). China’s exports total $268 million in April 2016 (down 1.5% from April 2015).

It is impossible to tell from this data whether the sanctions are having any impact beyond the general downturn in the Chinese economy because this is trade based on value (Price x Quantity), and prices of North Korea’s commodity exports have been falling as well. We need to compare the quantity of the prohibited mineral exports over time to see if the sanctions are having any impact (assuming China is accurately reporting them).

It is also important to remember that DPRK – China trade is not regular, so past performance is not necessarily indicative of future results. Also, the data can be revised for numerous reasons.

Finally, China stopped reporting unrefined oil exports to the DPRK in 2014, but they did not stop exporting unrefined oil itself. According to Chinese customs data, the country exported about 520,000 tons of oil to North Korea every year from 2009 to 2012. Beijing normally supplied between 30,000 to 50,000 tonnes (222,000 to 370,000 barrels) of crude oil to North Korea every month. Shipments of crude oil to North Korea rose 11.2% to 578,000 tons in 2013.

The data in the above summary comes from the articles below, starting with this in the Choson Ilbo:

China’s imports of North Korean products declined more than 20 percent last month compared to the same period of 2015 as Beijing began to implement UN Security Council sanctions against Pyongyang.

According to statistics by the Korea International Trade Association, China imported US$161 million worth of North Korean products in April, down 22.3 percent on-year.

Its imports of North Korean coal fell 38.2 percent to $7.21 million [this statistic is wrong and was corrected by Yonhap], and of gold 91.1 percent to $250,000. Imports of North Korean titanium, which is on the list of banned imports, were zero.

But imports of iron ore, which is allowed since it is thought to support the livelihood of ordinary North Koreans, increased 1.7 percent, and of zinc, which is also not banned, a whopping 685 percent to $5.7 million.

China’s exports to North Korea totaled $268 million last month, down 1.5 percent. Sales of jet and rocket fuel dropped 39.9 percent and of cars and electronic equipment 45.5 percent and 43.9 percent.

Total trade between North Korea and China last month fell 10.5 percent on-year to $429 million. If China continues to abide by UN Security Council sanctions against North Korea, bilateral trade will shrink further and dent the North’s attempts to earn hard currency.

North Korea’s state-run Rodong Sinmun daily on Tuesday complained that the sanctions are pressuring the North “beyond imagination.”

Read the full story here:
Sanctions Slash Chinese Imports of N.Korean Products
Choson Ilbo
2016-5-25

UPDATE 2 (2016-5-23): Reuters reports a drop in Chinese imports of North Korean coal:

China’s imports of coal from its neighbor North Korea reached 1.53 million tonnes in April, down 35 percent on the month and 20.5 percent year-on-year as Beijing sought to comply with a tougher sanctions regime against the country.

North Korean shipments over the first four months of the year remain 23.2 percent higher than the same period of 2015, data from China’s General Administration of Customs showed on Monday.

China’s Ministry of Commerce announced at the beginning of April that it would ban North Korean coal imports to comply with new United Nations sanctions on the country, though it made exceptions for deliveries intended for “the people’s wellbeing” as well as coal originating from third countries like Mongolia.

Mongolia was the chief beneficiary of the decline in shipments from North Korea, with the country supplying 1.98 million tonnes to China in April, up 34.7 percent on the year.

Australia remained China’s biggest supplier, though the April volume of 5.74 million tonnes was down 12.9 percent compared to last year.

Read the full story here:
China coal imports from North Korea dip 35 percent as sanctions bite
Reuters
2016-5-23

UPDATE 1 (2016-4-14): Yonhap reports on Q1 2016. Overall trade is up, but this is composed of surging Chinese exports to North Korea and falling imports. Here are the relevant parts of the report:

Trade volume between North Korea and China posted double-digit growth in the first quarter of 2016 from a year earlier despite the United Nations’ punitive economic sanctions imposed on the reclusive country, official data showed Wednesday.

The size of bilateral trade stood at 7.79 billion yuan (US$1.2 billion) in the January-March period, up 12.7 percent from the same period last year, Huang Songping, spokesman of China’s General Administration of Customs, said during a press briefing on the country’s first-quarter trade outcome.

The increased trade volume is attributable to a sharp rise in China’s exports to North Korea in the three months, which posted 14.7 percent growth to 3.96 billion yuan, according to the spokesman.

On the other hand, China’s imports from North Korea contracted 10.8 percent to 3.83 billion yuan, he said.

“Major Chinese exports to North Korea are machinery, electronic goods, labor-intensive products and agricultural goods, while imports mainly are coal and iron ore,” Huang said.

The spokesman indicated that the trade increase should not be viewed as China circumventing the U.N. Security Council sanctions because the latest figure accounts for bilateral trade volume before the sanctions took effect.

China immediately implemented the sanctions after it announced a list of banned trade goods with North Korea on April 5, the spokesman pointed out.

“The China-North Korea trade data for the first quarter has nothing to do with anti-North sanctions,” the official said, also vowing to “follow through with the U.N. sanctions resolution thoroughly.”

Another official from China’s State Council stressed any trade items that concern the public welfare or have no link to North Korea’s nuclear weapons development are not subject to the sanctions.

But the official refused to release the monthly trade figure for March, only saying that the monthly data is not available.

In early March, the U.N. adopted the toughest sanctions it has ever slapped on North Korea as punishment for the communist country’s defiant nuclear test in January and a long-range rocket launch in February.

Read the full story here:
N. Korea-China trade volume up 12.7 percent on-year in Q1
Yonhap
2016-4-13

ORIGINAL POST (2016-4-7): The Chinese Ministry of Commerce issues announcement on trade and UNSC Resolution 2270:

MOFCOM Announcement No. 11 of 2016 Announcement on List of Mineral Products Embargo against the DPRK
April 7, 2016 – 10:57 BJT (14:57 GMT) MOFCOM

In order to carry out relevant resolutions of the UN Security Council and in accordance with the Foreign Trade Law of the People’s Republic of China, the following products are hereby embargoed against the Democratic People’s Republic of Korea:

1. Imports of coal, iron and iron ores from the DPRK are forbidden with the following two exceptions:

(1) Trading that is determined to be conducted to generate profits solely for the people’s livelihood, and that does not involve the nuclear program or the ballistic missile program of the DPRK or any other profit generating activities prohibited in the Resolutions No. 1718(2006), No. 1874(2009), No. 2087(2013), No. 2094 (2013) or No. 2270 (2016) of the UN Security Council.

If the import falls into the range of the trade mentioned above, then during the import declaration, the enterprise shall submit to the customs authority a letter of commitment (See Annex 2) signed by its legal representative or principal and affixed with its official seal. If it is confirmed by solid information that the imports are not for the people’s livelihood, or are related to the nuclear program or the ballistic missile program of the DPRK, the customs authority will not clear such imports.

(2)Trading of coal that is confirmed not to be originated in the DPRK but is delivered and used to export from the Port of Rason through the DPRK, and such trade does not involve the nuclear program or the ballistic missile program of the DPRK or any other profit generating activities prohibited in the Resolutions No. 1718(2006), No. 1874(2009), No. 2087(2013), No. 2094 (2013) or No. 2270 (2016) of the UN Security Council.

If the import falls into the range of the trade mentioned above, the importing enterprise shall submit to the provincial competent commerce authority, where such enterprise is located, relevant information and application in advance, which shall then be submitted to the Ministry of Foreign Affairs via the Ministry of Commerce, and then notified to the Sanctions Committee of the UN Security Council for record-filing before the enterprise can begin to import. During the import declaration, the enterprise shall submit to the customs authority a letter of commitment (see Annex 3) signed by its legal representative or principal of the enterprise and affixed with its official seal and the certificate of original. If it is confirmed by solid information that the trade does not fall into the exception, then the customs authority will not clear the imports.

2. Imports of gold ores, titanium ores, vanadium ore, and rare earth minerals from the DPRK are forbidden.

3. Exports of aircraft fuel including aviation gasoline, naphtha aircraft fuel, kerosene aircraft fuel and kerosene rocket fuel are forbidden with the following two exceptions:

(1) The aircraft fuel that has been specially approved by the Sanctions Committee of the UN Security Council case by case to be transferred to the DPRK and verified to be used to satisfy basic human needs; however, special arrangements must be made to effectively monitor the delivery and use of such fuel.

(2) The aircraft fuel that is sold to civil airplanes outside the territory of the DPRK or is supplied solely for use in trips from and to the DPRK.
4. For details of the product embargo, please see Annex 1.

This Announcement shall be implemented as of the date of announcement.

Here is coverage of the statement in Yonhap:

China’s commerce ministry on Tuesday announced a list of restrictions on imports from North Korea and said it will ban the export of jet fuel in accordance with new U.N. sanctions slapped on Pyongyang following its latest provocations.

Backed by China, the U.N. Security Council adopted a package of fresh sanctions on North Korea earlier last month to punish the North for conducting its fourth nuclear test in January and launching a long-range rocket in February.

The new sanctions require U.N. member states to ban imports of North Korean gold and rare earth metals. But trade in North Korean coal and iron ore will be allowed if the proceeds from the trade are related to “livelihood purposes.”

The Chinese announcement said it will continue to import North Korean coal, iron, and iron ore if such transactions are involved in “livelihood purposes” and their revenues are not used for North Korea’s nuclear and missile programs.

“If credible information confirms that any deal is not for livelihood purposes or in connection with North Korea’s nuclear or ballistic missile programs,” the Chinese customs authorities should not release such mineral items, a statement released by the Chinese ministry said.

China accounts for nearly 90 percent of North Korea’s foreign trade, and mineral resources are a key part of their bilateral trade.

Many analysts say the reference to “livelihood purposes” in the new U.N. sanctions could allow China to continue the trade of coal and iron ore with North Korea.

The Chinese list of restrictions on mineral imports from North Korea also includes titanium and vanadium.

In line with new U.N. sanctions, China also prevents their nationals from selling or supplying jet fuel to North Korea.

But the provision will not apply if there is a humanitarian need, or for civilian passenger aircraft outside North Korea during a return flight to North Korea, the Chinese statement said.

Earlier in the day, South Korean Ambassador to China Kim Jang-soo told a group of South Korean correspondents that the new U.N. sanctions have so far left no specific impact on bilateral trade between North Korea and China.

“No specific figures, including changes in North Korea-China trade volume and (China’s) import volume of (North Korean) coal, have been reported yet,” Kim said.

Kim said China will submit a report about its implementation of the new sanctions on North Korea within 90 days of the sanctions being adopted.

The Chinese report to the U.N. will become the “standard” in assessing whether or not China is sincerely enforcing the new sanctions on North Korea, Kim said.

Here is coverage in the Hankyoreh.

Here is coverage in NK News.

On April 5, Xinhua announced the following:

China on Tuesday announced embargoes on some imports from and exports to the Democratic People’s Republic of Korea (DPRK).

In terms of imports, China has banned purchases of coal, iron ore and several other raw minerals, and exports of aviation fuel to DPRK are also no longer allowed.

The bans follow the UN Security Council’s resolutions, the Ministry of Commerce said.

Yonhap reported that DPRK-china trade rose 4.6% in February:

Trade between North Korea and its economic lifeline, China, grew 4.6 percent on-year in February, Chinese customs data showed Wednesday, despite tensions over the launch of a long-range rocket following the North’s fourth nuclear test.

Bilateral trade volume stood at $323 million last month, according to the data. China’s imports of North Korean goods gained 2.48 percent on year to $162 million and its exports to the North rose 6.91 percent to $161 million.

Compared with January, however, bilateral trade fell about 15 percent.

The U.N. Security Council imposed tougher sanctions on North Korea earlier this month to punish it for the Jan. 6 nuclear test and Feb. 7 launch of a long-range rocket, both of which violated previous U.N. resolutions.

China, which accounts for nearly 90 percent of North Korea’s external trade, has vowed to fully implement the new U.N. sanctions on North Korea.

But, China has also made it clear that sanctions should not affect the normal trade between the two nations.

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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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