North Korean Economy Watch

Pictured above (Google Earth): Mt. Paektu and the locations of tourist infrastructure on the Chinese and Korean side of the border.

According to Yonhap:

North Korea is set to open its portion of the Korean Peninsula’s highest mountain to Chinese tourists this month, a travel agency official said Wednesday, resuming the tour route that has been suspended since the North conducted its third nuclear test.

If realized, it would represent another bid by North Korea to increase tourism income by approving more tour routes that start in Chinese cities.

The peninsula’s highest peak, Mt. Baekdu, sits on the border between North Korea and China. Tourists can visit the Chinese side of the mountain, but the tour route to the North Korean portion has been halted following the North’s nuclear test in February last year.

The two-day or three-day tour to the North Korean side of the 2,749-meter mountain starts from the Chinese border city of Helong in the northeast of China. Helong is part of the Yanbian Korean Autonomous Prefecture in China’s Jilin Province and a popular border town for travel to North Korea.

The official at the travel agency in Helong, who spoke on the condition of anonymity, said the tour route will be reopened in the middle of this month.

“It is the only route for tourists from China to see the eastern side of Mt. Baekdu,” the official said, adding that the trip will only be available for Chinese tourists.

The two-day trip will cost 1,100 yuan (US$175.8) per person and the three-day trip will cost 1,350 yuan, according to the official.

North Korea is one of the world’s most secretive and isolated nations, but Pyongyang has stepped up efforts to attract foreign tourists, particularly those from China.

Earlier last month, North Korea started its first one-day cycling trip from the Chinese border city of Tumen. The tour is not available for non-Chinese travelers.

Recently the DPRK has also welcomed day tourists to Namyang and Hoeryong.

Previous posts on tourism here.

Read the full story here:
N. Korea, China to resume tours to Korean Peninsula’s highest mountain
Yonhap
2014-6-4

According to KCNA:

Number of Chinese Tourists Grows in DPRK

Pyongyang, June 2 (KCNA) — The tour by Chinese was conducted in the Rason area of the DPRK from May 31 to June 2, under an agreement made between the DPRK’s Rason International Travel Company and China’s Yanbian Arirang International Travel Agency.

Involving in the tour were more than 40 Chinese, who toured Pipha Islet, the Rason Taehung Trading Company, Rajin Port and other places by private cars.

This was the eighth batch of Chinese this year to visit the DPRK by private cars.

In this regard, an official at the Tourism Bureau of the Rason City People’s Committee, told KCNA:

“The tour by private cars began in June Juche 100 (2011), with due ceremony in the Rason economic and trade zone. Since then, more than 1 300 tourists have made trips to the area by more than 300 private cars in 70-odd batches.
Other forms of tourism are expected to grow in scope.”

Pictured Above: Areas where the fishermen are allegedly crossing the NLL

According to the Joongang Ilbo:

North Korea signed a contract with Chinese fishermen allowing them to fish in waters near the disputed maritime border including South Korea’s waters, sources told the JoongAng Ilbo yesterday.

The contract allows Chinese fishermen to work near the Northern Limit Line (NLL), the de facto maritime border between the two Koreas in the Yellow Sea, including South Korean waters below the boundary, Seoul officials said. In return for giving the Chinese fishermen the right to work in South Korean waters, particularly during crab and squid seasons, North Korea is paid a certain amount of money annually, officials said.

“As North Korea has expanded its joint fishery area with China [to the southern waters below the NLL], some Chinese vessels are moving southward more than they did before,” a South Korean government official said. “We are thinking of more active measures to keep them from violating the NLL.”

Officials confirmed that the South Korean waters allegedly being rented out to the Chinese fishermen were three areas north and east of Baengnyeong Island and north of Yeonpyeong Island. Under the alleged contract, several North Korean and Chinese vessels have recently worked together, officials said. Some North Korean fishermen were allegedly hired by the Chinese vessels’ owners as well.

“Last year, most Chinese vessels worked north of the NLL, but recently they worked very close to the NLL and some crossed the line,” a Korean Coast Guard official said. “So we dispatched additional patrol ships and special Coast Guard forces to the areas.”

Starting in April, the Chinese ships gradually approached the NLL, officials said, and from mid-May, several large vessels crossed the border frequently, apparently for crab fishing.

The Korean Coast Guard seized a total of six Chinese boats that violated the NLL since May 19, including three 10-ton vessels on Tuesday. They said they also spotted about 100 vessels, assumed to be Chinese, near Yeonpyeong Island, and 170 near Baengnyeong Island, fishing in South Korean waters.

The South Korean government notified Beijing of the illegal fishing and called for them to stop, officials said.

“The Foreign Ministry and the Coast Guard told the Chinese Coast Guard officials about the contract that included our waters,” another South Korean official said. “We demanded the Chinese government warn the vessels not to cross the NLL.”

Military officials in Seoul raised concerns about the purpose of the contract. They say that the regime appears to be attempting to nullify the effectiveness of the boundary as well as to earn foreign currency.

“In the name of controlling the Chinese vessels, some North Korean patrol ships could cross the border or seize our fishing boats as well,” a military official said.

Read the full story here:
North rents out waters near NLL
Joongang Ilbo
Jeong Yong-soo
2014-5-30

According to the Daily NK:

China has taken steps to simplify customs procedures in a bid to enhance revenue accrued from toll processing with North Korea, Radio Free Asia reported on the 29th. Northeastern Jilin Province is said to be benefiting substantially thanks to toll processing of items contracted out by Chinese companies for manufacture in North Korea.

According to the report, a customs office in Hunchun now serves as the hub of toll processing for clothing. It is believed that the average time for customs processing has been shortened by 57% for imported products in the last year alone. The province calls it a “tailor-made development strategy” and, they assess, the scale of the textile industry has expanded as a result.

Last year saw China import US$500m worth of clothing from North Korea, a 34% increase from 2012, Radio Free Asia further conveyed.

Some analysts attribute the spike in toll processing between the two countries to North Korea’s enhanced efforts to attract foreign capital from China amid suspended inter-Korean trade relations. The North Korean authorities have also made moves to boost the domestic textile sector by increasing wages at state-run mills.

Read the full story here:
Toll Processing Proving Lucrative for Jilin
Daily NK
2014-5-29
Lee Sang-yong

According to China Daily:

A one-day bus tour from the northeast China border city of Longjing to Hoeryong in the Democratic People’s Republic of Korea (DPRK) was launched on Tuesday.

The opening of the route will enable Chinese tourists to arrive in Hoeryong directly, without transferring to a DPRK vehicle at the port, according to Wang Jing, a government worker from Longjing in Jilin Province.

“This will save tourists a lot of time and facilitate the whole journey,” Wang said.

A total of 134 tourists joined the tour on the first day of the route opening.

The trip costs 580 yuan (94 US dollars) per tourist. Tourists can visit historical sites on the DPRK side, taste Korean delicacies and enjoy performances by DPRK artists.

China and the DPRK have in recent years witnessed booming border tourism on the back of multiple travel schemes aimed at boosting the regional economy.

The DPRK has opened several cities for group tours from China, including Rason, Namyang, Chongjin and Mount Kumgang. About 10,000 tourists from Yanbian, also in Jilin, visit the DPRK annually.

The process for for preparing Hoeryong for Chinese tourists has been underway for several years. Hoeryong’s “Food Avenue” was completed in 2010. Chinese tourists started showing up in 2012. Western tourists started showing up in 2013.

Just a few days ago, the Chinese and DPRK launched day-long bicycle tours of Namyang. Previously, Chinese tourists could only take day tours of Sinuiju (an experience that is now available to western tourists) and Rason.

UPDATE: Here is coverage in KCNA (2014-6-4):

One-day Bus Tour of Hoeryong by Chinese People

Pyongyang, June 3 (KCNA) — Chinese people made the first one-day bus tour of Hoeryong City, North Hamgyong Province, the DPRK.

After the tour, the Chinese tourists told that they were deeply impressed by their visit to the DPRK.
Jin Bo (male: 55), deputy director of the Foreign Affairs Office in Yanbian Korean Nationality Autonomous

Prefecture, told as follows:

The one-day tour from Longjin to Hoeryong, China by Chinese bus helped the tourists deepen their friendly feelings towards the DPRK.

The tourism course was very excellent. Many tourists said that they felt as if they were in Pyongyang.

I think one-day tour of Hoeryong will be one of major attractions for Chinese in the near future.

Sha Chunxia (female: 44), a staff of Yanbian News, said:

I was deeply moved to see an art performance given by kindergarteners.

It was hardly believable that the five-or six-year old children could give such an excellent performance.

I have never thought of giving art education to my daughter.

The educational system in the DPRK is very admirable.

I want my daughter to be educated under such excellent system.

Later, I will come together with my daughter to see the performance.

Read the full story here:
China, DPRK border cities open one-day bus tour
China Daily
2014-5-27

According to the Korea Times:

North Korea’s imports of digital television sets from China have more than quadrupled this year, a South Korean trade group said Sunday, amid reports that the country is moving to introduce digital TV broadcasting.

In the first four months of the year, China shipped digital TVs amounting to some US$17.66 million to North Korea, up 338 percent from $4.02 million during the same period last year, according to the Korea International Trade Association.

The figure is the fifth-largest amount for any single item shipped from China to North Korea in the January-April period. Gasoline topped the list.

The North earlier said on a state-run website that it was moving to introduce digital TV broadcasting. The country also asked the U.N. International Telecommunication Union in 2011 for assistance in switching from an analog to a digital broadcasting system.

“The move by the North Korean government to switch to a digital broadcasting system appears to be an effort to win greater public support by showing that the people’s lives are improving,” said Cho Bong-hyun, an analyst at the IBK Economic Research Institute.

Read the full story here:
Trade report says N. Korea importing large number of digital TVs
Korea Times
2014-5-25

According to the China Daily:

Construction on a new bridge over a river separating China and the Democratic People’s Republic of Korea (DPRK) has started, authorities of northeast China’s Jilin Province said on Tuesday.

With a total investment of 137 million yuan (21.93 million US dollars), the 804.7-meter new Tumen River bridge is expected to open in 2015 or 2016 as a new route for bilateral trade, authorities said.

The old Tumen River bridge has not been repaired for many years and is facing safety risks. However, the old bridge will not be dismantled and will be kept as a scenic spot.

Tumen City is linked to the DPRK by both highway and railway.

According to Yonhap:

China will begin constructing a new major bridge to North Korea over the Tumen river, China’s state media reported Friday, in the latest sign that economic relations between the two nations remain stable despite the North’s nuclear ambition.

The 804-meter-long, 23-meter-wide bridge will link the Chinese border town of Tumen to North Korea’s northeastern coastal city of Chongjin, the Yanbian Daily newspaper reported, citing the city government of Tumen.

China’s central government recently gave a final approval to build the bridge, which is entirely funded by China at a cost of 137 million yuan (US$21.9 million), the report said.

The newspaper did not specify when the construction would start but that it would “soon be implemented.”

China has been building another major bridge connecting its border city of Dandong to the North Korean city of Sinuiju across the Amnok river, called as the Yalu River in China.

North Korea’s series of provocations, including last year’s third nuclear test, have strained political ties with its last-remaining ally, China. Still, many analysts believe that Beijing will not put strong pressure on Pyongyang due to the risk of aggravating the current situation.

According to AFP:

The bridge will replace an older structure, built in 1938, which will be turned into a tourist attraction, Xinhua said. There are several other rail and road bridges linking the two countries.

Chinese tourists recently started crossing into Namyang for day trips on bicycles.

Read the full stories here:
China to build new cross-border bridge to N. Korea: report
Yonhap
2014-5-23

New bridge to link China, DPRK
China Daily
2014-5-27

UPDATE 2 (2014-5-7): The exact legal status of some of the ports remains a mystery. I have attempted to clarify and point out some of the remaining areas of confusion below.

Pictured above (Google Earth): A 2013-9-14 satellite image of Rason Piers 1 and 2. Pier 1 (Top) is used by the Chinese. The Royale Star is docked at Pier 2.

When Jang Song-thaek was purged, among the laundry list of offenses he was alleged to have committed against the regime was this:

Jang made no scruple of committing such act of treachery in May last as selling off the land of the Rason economic and trade zone to a foreign country for a period of five decades under the pretext of paying those debts.

This phrase had Pyongyang watchers abuzz over whether Chinese contracts in Rason were in any danger of being violated by the North Korean government. Of course it was immediately unclear what enterprise(s) would be affected since we are all unaware of any significant deals reached in May of 2013.

A recent statement by a  North Korean official in the Hong Kong media has, however, raised the issue of contract credibility in the DPRK yet again.

According to Yonhap:

Chinese companies have not leased piers at a port of North Korea’s free trade zone, a Pyongyang official has told Hong Kong media, raising speculation that the shock execution of the North Korean leader’s uncle might have soured business ties with its key ally.

China reportedly agreed to invest about US$3 billion in developing the free trade zone in North Korea’s northern tip of Rason, formerly known as Rajin and Sonbong, in late 2011. The special trade zone sits across the border from China’s northeastern Jilin province.

There have been media reports that Chinese companies have leased two piers at the Rason port, but Kim Chun-il, a division chief of the port’s foreign business bureau, denied such reports during an interview with Hong Kong-based Phoenix TV.

Asked by a Phoenix TV journalist whether China won the right to exclusively use two piers at the port, Kim replied in Korean, “There are no piers that are specially used by the Chinese side.”

“They (Chinese people) have said so, but we have never formally rented out Pier 1 and Pier 2 to them,” Kim said.

The interview was made during a 72-minute special TV program on the Rason trade zone, which was aired on April 19. The program’s video footage can be seen on the website of Phoenix TV.

Kim said that Russia leased the Pier 3 at the port, adding that North Korea plans to modernize the two piers on its own.

The Chinese media did indeed claim at least once (see here) that they were “using” Piers 1 and 2. And Dr. Bernhard Seliger told us back in September 2012 that the Chinese were using the port, although no lease was signed [see below].

However, it is not true that the North Koreans have never announced an agreement on Pier 1 at Rason. I posted an article (back in March of this year) in which Choe Hyon Chol, section chief of the new State economic Development Commission, stated the following:

The Rajin Port, a transit trade port, is the hub of international cargo transit transportation and transport of exports and imports of entrepreneurs who invested in the zone.

The port has assignments to transport marine products for export from the East Sea of Korea and every kind of cargoes from and to northeast area of China and Far East Region of Russia.

The Rajin Port consists of three wharves; wharf No. 1 is designed to be renovated and operated by China Dalian Chuang Li Co., Ltd. and wharf No.3 by Rason International Container Transport J. V. Company to be set up according to the contract with Russian Rail Trade Co., Ltd.

I cannot imagine that a Chinese company is going to renovate and operate the pier without a clear contract. Of course the status of that contract is now called into question. Has the Chinese firm pulled out?  Have the North Koreans canceled the contract? Are North Korean individuals from different agencies just not on the same page? Who knows?

Still no word on Pier No. 2.

Great recent photos of Rason port by Ray Cunningham here.

You can read the Yonhap story here:
N. Korean official says no piers for China at special trade zone
Yonhap
2014-5-2

UPDATE 1 (2012-9-5): It appears the information in the original post is out-of-date now. So here is an update:

Pictured Above (Google Earth): Rajin Port

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in with an update on the Rajin Port:

The 80 year old port has three piers, of which the No. 3 pier is used by the Russians. They have a long-term lease (50 years starting in 2008) and while they are currently doing some work there, it is not being used for exports.

China is interested in using Pier No.1 (where it rents a warehouse to store coal) and Pier No. 2 (currently in use by the Koreans). Plans have also been expressed (now cancelled) to build 2 new piers (No. 4 and 5) (See here). For many years the Chinese and North Korean governments have negotiated a pier rental agreement, but for now there is no concrete result–though at numerous times it has been maintained that China already rented the port. What exactly the problems are is not known. For now China uses the port to bring coal from the northernmost Heilongang Province to southern China via a sea route, an event which took place twice this year.

Theoretically, the port as a handling capacity of 3 million sq. tons, however the maximum real handling was 800.000 tons in 1979, while last year it was 200.000 tons. The depth of the harbor is 9 m.

In a report from Xinhua (2012-8-28), the Chinese assert they are using ports 1 and 2.

China […] was using No. 1 and 2 piers, while Russia had leased No. 3 pier, said an official in charge of foreign affairs of the port.

So there is some discrepancy between the Chinese account and Dr. Seliger.

ORIGINAL POST (2010-5-23): What are the three piers at Rason used for? 

The City of Rajin (Rason) has three ports (pictured above–click for large version).  According to a 1998 UNDP report, Pier No. 1 (on the right) was known as the “Russian-Japanese Bulk Fertilizer Terminal. It has now been leased by the Chinese. Port No. 3 (left) was formerly known as the Rajin Alumina Terminal.  This is now leased by the Russians (see here). A fellow North Korea-watcher tells me that Pier No. 2 is reserved for the North Koreans.

KBS recently ran a video on recent changes in Rason. I have uploaded the segment to YouTube (Apologies to readers in China).  You can see the video here.

On a side note, if anyone in China has the time and savvy to rip videos from my YouTube account and re-post them on Youku please go for it.

Pictured above: Tumen China (left), Namyang, DPRK (Right)

According to Xinhua:

A border city in northeast China launched Friday bicycle tours to the neighboring Democratic People’s Republic of Korea (DPRK) as tourism to the country booms.

Thirty-five Chinese tourists joined the first self-drive travel by bicycle from Tumen City, Jilin Province, to DPRK’s Namyang city, said organizers. The tourists spent three hours in the DPRK.

The bicycle tour is inexpensive and only needs simple procedures, said an official of the Tumen Tourism Bureau. He said the route is expected to attract more tourists to the DPRK.

Excursions by train from Tumen to the DPRK’s Chilbosan resumed on Wednesday. The tourist train was launched in April 2012, but was later suspended.

Tumen has highway and railway service to the DPRK.

Xinhua also posted this story which offers more context:

Tourism to the Democratic People’s Republic of Korea (DPRK) is booming in northeast China border cities on the back of multiple travel schemes aimed at boosting the regional economy.

On Friday, Zhao Xin beamed with joy as he joined the first group of cyclists from Tumen City, Jilin Province, to DPRK’s Namyang city.

Tumen, under the jurisdiction of Yanbian, a Korean autonomous prefecture in Jilin, is separated from DPRK by the Tumen River. The cross-border city is linked with DPRK by highways and railways.

Amid high spirits, Zhao, a travel agent from Yanbian, was among thirty-five Chinese tourists in the DPRK, visiting the Namyang Railway Station, Kim Il-sun’ s statue, and enjoying local delicacies in a famous downtown street during a one-day visit.

“The city is quite unique and full of energy,” Zhao told Xinhua, hoping that more DPRK cities would join the list of the travel-by-bicycle initiative so that he could enjoy more sightseeing as well as the local gastronomical culture.

For Chen Boyi, taking a train is a splendid choice to tour the neighboring country. Chen said that her excursion during the Workers’ Day holiday helped unravel some mysteries of DPRK.

“Namyang is very clean and the local people warm-hearted,” Chen, 21, said.

Excursions by train from Tumen to the DPRK’s Chilbosan resumed two days before the bicycle tour program. The tourist train was launched in April 2012, but was later suspended.

The train and bicycle tours are the latest effort to ramp up the cross-border tourism.

In April, the city of Ji’an, Jilin, launched regular tourist trains to Pyongyang, Kaesong and Panmunjom in the DPRK, making it the second city after Dandong in the neighboring Liaoning Province with such services.

In 2013, Tumen city simplified applications for non-local visitors, allowing them to enter the DPRK on the same day they arrive in Tumen.

Meanwhile, the DPRK has opened several cities for group tours from China, including Rason, Namyang, Chongjin and the Mount Kumgang.

The schemes have powered the past few years of tourism boom. About 10,000 tourists from Yanbian alone visit the DPRK annually.

With a variety of travel means, it will be more convenient to visit the DPRK, said Ji Run, a tourist who has just wrapped a visit to the country.

“I would like to come back in the future,” he said.

Yonhap also reports:

North Korea and China have simplified border-crossing procedures for Chinese tourists traveling to the North, China’s state media reported Monday, in another sign that Pyongyang is eager to boost tourism income.

The move allows Chinese people who take tours from China’s border cities in Jilin and Liaoning provinces to get a “travel pass” to North Korea within 24 hours, compared with the previous two days, the state-run China Daily reported.

The report did not elaborate when the simplified procedures took effect, but North Korea started a new one-day tour program last week by opening its border to bicycle tourists from China for the first time.

The newspaper carried a photo of Chinese tourists entering North Korea by taking bicycles from the northeastern city of Tumen in Jilin province to the North Korean border city of Onsong.

Last week, China resumed train operations on a route from Tumen to the North’s northeastern port city of Chongjin, after a year of renovation, the report said.

Zhang Weidong, an official at a Chinese travel agency responsible for the train travel, told the newspaper that more than 2,000 tourists used the train in 2012 before the renovation.

“The number is estimated to rise to 7,000 this year,” Zhang said.

The four-day train trip to North Korea costs about 1,900 yuan (US$304), the report said.

North Korea is one of the world’s most secretive and isolated nations, but since last year, Pyongyang has stepped up efforts to attract foreign tourists, including offering more international and domestic flights.

Read the full stories here:
Chinese city launches bicycle tours to DPRK
Xinhua
2014-5-2

N. Korea, China simplify border-crossing for Chinese tourists
Yonhap
2014-5-5

We earlier posted an article on how DPRK-China trade has fallen in the first quarter of 2014. The DPRK has apparently imported zero oil from China in the first quarter of this year.

Grain imports from China also fell.

According to Yonhap:

North Korea’s grain imports from China decreased by more than 50 percent in the first quarter from a year earlier, data showed Sunday.

According to the Korea International Trade Association (KITA), North Korea imported 26,263 tons of grain, including 23,636 tons of flour, 1,241 tons of rice and 1,192 tons of corn, from China in the January-March period.

The North’s imports during the first three months is equivalent to 48 percent of 54,178 tons imported during the same period a year ago, the data showed. Compared with the first quarter of 2012, the country’s grain imports from China decreased about 40 percent.

In terms of value, the North’s imports of Chinese grain amounted to US$11.93 million in the first quarter, down 52 percent from $24.71 last year.

“The drop in the North’s grain imports from China in the period compared with other years seems to be due to an increase in the country’s grain production last year,” said Kwon Tae-jin, a research fellow at the government-funded Korea Rural Economic Institute (KREI). “However, the country may increase its grain imports in the future, as the amount of its grain production is not enough for its people.”

The U.N. World Food Program (WFP) estimates the North produced 5.03 million tons of polished grain between November 2013 and October 2014, up 5 percent from a year ago.

Read the full story here:
N. Korea’s grain imports from China halve in Q1
Yonhap
2014-4-27