North Korean Economy Watch

Pictured above (Google Earth): Jongju County

According to Mining.com:

Privately-held SRE Minerals on Wednesday announced the discovery in North Korea of what is believed to be the largest deposit of rare earth elements anywhere in the world.

SRE also signed a joint venture agreement with the Korea Natural Resources Trading Corporation for rights to develop REE deposits at Jongju in the Democratic People’s Republic of Korea for the next 25 years with a further renewal period of 25 years.

The joint venture company known as Pacific Century Rare Earth Mineral Limited, based in the British Virgin Islands, has also been granted permission for a processing plant on site at Jongju, situated approximately 150 km north-northwest of the capital of Pyongyang.

The initial assessment of the Jongju target indicates a total mineralisation potential of 6 billion tonnes with total 216.2 million tonnes rare-earth-oxides including light REEs such as lanthanum, cerium and praseodymium; mainly britholite and associated rare earth minerals. Approximately 2.66% of the 216.2 million tonnes consists of more valuable heavy rare-earth-elements.

According Dr Louis Schurmann, Fellow of the Australasian Institute of Mining and Metallurgy and lead scientist on the project, the Jongju deposit is the world’s largest known REE occurrence.

The 216 million tonne Jongju deposit, theoretically worth trillions of dollars, would more than double the current global known resource of REE oxides which according to the US Geological Survey is pegged at 110 million tonnes.

Minerals like fluorite, apatite, zircon, nepheline, feldspar, and ilmenite are seen as potential by-products to the mining and recovery of REE at Jongju.

Further exploration is planned for March 2014, which will includes 96,000m (Phase 1) and 120,000m (Phase 2) of core drilling, with results reported according to the Australia’s JORC Code, a standard for mineral disclosure similar to Canada’s widely used National Instrument 43-101.

Also from Mining Weekly:

SRE Minerals Limited announces the results of exploration and studies in collaboration with the Korea Natural Resources Trading Corporation of the Democratic People’s Republic of Korea

SRE Minerals Limited (“SRE” or “the company”) announced today their joint venture agreement with the Korea Natural Resources Trading Corporation for rights to develop all rare-earth-element deposits at Jongju, North Pyongan Province.

The joint venture company known as Pacific Century Rare Earth Mineral Limited has the rights under the joint venture agreement which includes the exploration, mining, beneficiation and marketing of all REE deposits in the Jongju area for the next 25 years with a further renewal period of 25 years.

Under the terms of the JV agreement SRE has also been granted permission for a National Rare Earth Mineral Processing Plant on site at Jongju, which is situated approximately 150 km north-northwest of the capital city of Pyongyang, within the North Pyongan Province, Democratic People’s Republic of Korea.

Leading Australian mining and geological consultancy, HDR Salva Resources Pty Ltd, has been SRE’s technical representative for the project and has been commissioned to access the mineralised potential of the Jongju REE target* with special reference to detailed mapping, extensive trenching and limited drilling.

HDR Salva Resources (Pty) Ltd.’s initial assessment of the Jongju REE Exploration Target* indicates a total mineralisation potential of 6.0 Bt (216.2 Mt total rare-earth-oxides including light rare-earth- elements such as lanthanum, cerium and praseodymium (mainly britholite and associated rare earth minerals). Approximately 2.66% of the 216.2 Mt TREO consists of heavy rare-earth-elements. A detailed classification of mineralised potential present in the Jongju REE Target* is presumed to be:

• 664.8 Mt @ >10.00% TREO,
• 1.1 Bt @ 4.72% TREO,
• 579.4 Mt @ 3.97% TREO, and
• 3.63 Bt @ 1.35% TREO.

Dr Louis Schurmann said: “The Jongju Target* would appear to be the World’s largest known REE occurrence.”

Technical information in this announcement has been compiled by Dr Louis W. Schurmann, who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Professional Natural Scientist with over 18 years of experience relevant to the styles and types of rare earth mineral deposits under consideration, and to the activities which has been undertaken to qualify as a Competent Person as defined by the Australasian Code for Reporting of Minerals Resources and Reserves (JORC) 2004. Dr Schurmann consents to the inclusion of information in this publication.

Further exploration is planned to recommence in March 2014, which will include 96,000m (Phase 1) and 120,000m (Phase 2) of core drilling. Results from the exploration program will be reported according to the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia (JORC Code (2004 / 2012)).

Investigations by the DPRK’s Academy of Science geologists have also identified several HREE targets*. There are also seven newly discovered carbonatite complexes which have been identified as green-field exploration targets. Exploration programs have been planned to assess their potential in 2014, together with the evaluation of known bastnasite and monazite deposits.

According to the mentioned HDR Salva Resources’ assessment, the Jongju REE Target* also contains economical quantities of rare and critical metals associated with fluorite, apatite, zircon, magnetite, ilmenite, nepheline and feldspar. These commodities will also be addressed during future exploration and further studies.
“This joint venture agreement reinforces the strong and constructive relationship SRE has developed with the DPRK over that time,” he said.

“The REE resource potential of the DPRK, while estimated to be massive has only been lightly explored to date. Given the major economic significance of the effective utilisation of these important minerals to the DPRK, we look forward to working in close co-operation with our partner to progress the development of this excellent opportunity.”

In terms of back ground, the majority of rare earth elements were sourced from placer deposits in India and Brazil in 1948. During the 1950’s, supply came mainly from South Africa, mined from large veins of rare earth-bearing monazite. Then from the 1960’s to 1980’s, rare earths were supplied primarily from the U.S., predominantly from Mountain Pass in California. Competition from China and environmental concerns eventually saw the U.S. operations shut down, and for the last 15 years China has dominated global supply. China today supplies an estimated 90-95% of the global market.

China has recently set quotas to restrict its rare earth exports, and global suppliers have made considerable headway in reducing dependence on Chinese supply. Based on this, several major rare earth companies have been taking advantage of this situation while many junior exploration companies have embarked on exploration programs to add value to small and relatively low-grade REE occurrences.

References to Exploration Target(s)* or Target(s)* in this document are in accordance with the guidelines of the JORC Code (2004). As such it is important to note that in relation to reported Exploration Targets or Target any reference to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report rare-earth mineral resources in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a rare earth mineral Resource.

Further information will be available at www.pcreml.com and www.sreminerals.com

Here is coverage in Voice of America,  Time, The Diplomat.

Read the full story here:
Largest known rare earth deposit discovered in North Korea
Mining.com
Frik Els
2013-12-5

According to Yonhap:

Trade between North Korea and its major trading partner China rose 6.2 percent on year in the first 10 months of this year to total US$4.72 billion, data showed Wednesday, despite international sanctions against Pyongyang over its defiant nuclear and missile tests.

The rise suggested that North Korea is becoming increasingly reliant on China, although Beijing is not supportive of Pyongyang’s nuclear ambition.

In the 10-month period, North Korea’s exports to China jumped 12.3 percent on year to account for $2.36 billion, according to data by the China Customs Information Center. The North’s imports gained 1.8 percent to $2.36 billion.

Remarkably this data shows a perfect balance of trade between the DPRK and China (exports=imports). This is a reversal from earlier in the year when it was reported that DPRK – PRC trade volumes had fallen from the previous year. See previous posts on DPRK trade statistics here.

Read the full story here:
Trade between N. Korea, China rise 6.2 pct in Jan-Oct despite sanctions
Yonhap
2013-12-4

This article contains a wealth on information on Chinese investment and financial support of the DPRK.

According to the South China Morning Post:

On his ninth business trip to North Korea this year, Hao Ze has been meeting government officials to finalise his latest investment deal, providing equipment to mine rutile, an ingredient in paints, plastics and sunscreen.

The work at the mineral ore deposit will add to Hao’s growing business empire, which includes a plant manufacturing car parts, a restaurant and a spa – all investments in a country run by a reclusive dictatorship.

Hao is among a growing league of private Chinese investors lured by North Korea’s powerful business potential and undeterred by its unpredictable politics. The investments are fuelling growth in North Korea’s economy, as well as concerns among Western analysts that the boom could encourage more erratic behaviour by the hermit kingdom.

There, Chinese investors dominate certain business sectors – in particular, mining – and its one reason many analysts say that North Korea’s feeble economy appears to be improving.

Before 2011, North Korea had been running a deficit. Two prominent economists have estimated that the country enjoyed a small surplus over the last two years. Last year, the country’s gross domestic product grew by 1.3 per cent, according to Bank of South Korea. The bank did not provide any dollar figures.

Most of these business deals are private and sealed outside of the Chinese government’s control. The exact size of the investments could not be gleaned. But many of the arrangements are profitable and have inadvertently increased Pyongyang’s dependence on its closest ally, Beijing, even as China has shown apparent frustration with the nuclear ambitions of supreme leader Kim Jong-un.

The increase in North Korea’s wealth from the investments could also shift the country’s engagement, or lack of it, with the outside world. Some researchers fear that with more capital, North Korea’s nuclear ambitions might grow bolder. The country will also have less incentive to introduce economic changes. Other researchers express hope that foreign investment creates an opportunity for more fruitful engagement with the outside world and the international community.

Raised in the central province of Zhejiang , Hao’s interest in North Korea was piqued by his grandfather, who fought in the Korean war in the 1950s. The grandson started travelling to North Korea in 2004 with friends to distribute food and money. He cultivated contacts and resourceful middlemen, and relied on those people when, in 2010, he started to import North Korean ginseng and honey to China. His portfolio expanded steadily and now includes a variety of small businesses on the peninsula.

He and several Chinese partners have invested 10 million yuan (HK$12.6 million) in Pyongyang, where he employs about 150 local workers, built an 8,000-square-metre factory compound and runs a restaurant and spa.

“There certainly are risks,” Hao says. “But this place is just like China in the 1980s. It’s highly risky, but it’s also highly profitable if you seize the opportunity.”

The actual size of private Chinese investment in North Korea is hard to gauge. Chinese citizens had poured about US$6 billion into businesses in North Korea by 2011, according to Sheila Miyoshi Jager, an associate professor of East Asian studies at Oberlin College in the United States.

China’s non-financial foreign direct investment in North Korea had reached US$290 million by the end of 2010, according to China’s Ministry of Commerce, a figure included in a report last year by the newspaper Oriental Morning Post in Shanghai. Hao and other academics say the figure is growing as more Chinese investors with an appetite for risk venture into North Korea.

And risks there are. Last year, a rare open row between a Chinese company and the North Korean government drew international attention to Korea’s opaque rules and arbitrary decisions. Chinese fertiliser and mineral producer Xiyang Group said in an August 2012 blog post that, after it had spent four years and 240 million yuan on an iron ore enterprise, North Korean authorities suddenly cancelled the company’s contract last year. The company said it was cheated out of its mining assets after North Korean officials extorted more than US$800,000 from the Chinese firm.

Xiyang called its venture a “nightmare” and said estimates of their losses were US$55.3 million. North Korean state media denied the claims and said the company implemented just 50 per cent of its investment obligations. Beijing has stayed silent about the dispute.

The incident has not dampened the enthusiasm of Chinese investors. Hao says that private businessmen like him are lured by a large pool of cheap labour and lower operating costs. Despite an unstable electrical power supply, utility fees and taxes are much lower than in China.

Almost 90 per cent of the more than 300 Chinese investors surveyed in 2007 reported making a profit in North Korea despite problems such as asset theft and rampant corruption, according to a survey by Marcus Noland and Stephan Haggard, two economists at the Peterson Institute for International Economics in Washington.

“That’s partly because this place is so isolated and so underdeveloped that if you can avoid major problems, there is money to be made,” Noland says.

Hao made big profits in the manufacturing and service industries. Now he’s setting his sights on North Korea’s mining sector, an increasingly important component of the country’s economy that has otherwise been severed from international trade.

That’s partly because of sanctions imposed by the United Nations and Western countries. Hao intends to invest 36 million yuan in his rutile venture, working with a company from Qinghai , which Hao declines to name as the deal is not finalised.

Chinese investors dominate North Korea’s mining industry. According to the US Korea Institute at John Hopkins University in the US, 41 per cent of the 138 Chinese companies registered as doing business in North Korea in 2010 were involved in the mining industry.

However, Zhang Huizhi from Jilin University’s North East Research Centre says that many private Chinese investors are working in North Korea without registering with Chinese authorities.

It’s believed that North Korea has around 200 different minerals and US$6 trillion worth of rare elements and mineral deposits including magnetite, zinc, copper and limestone, according to estimates by the South Korean state-owned mining company Korea Resources.

However, many international investors are turned off by North Korea’s cryptic business environment, unstable politics and faulty infrastructure, which have made operating mines and transporting minerals difficult. Chinese businessmen, though, plough ahead thanks to their proximity, access to savvy Chinese middlemen who speak Korean and connections on both sides of the border. “These are the resources not available for other investors,” says Scott Bruce, an associate with the East West Centre in the United States.

Coal mining is a popular choice for Chinese businesses. According to Bruce, many Chinese investors pay far less for North Korean coal than for what’s extracted from other countries. North Korea, however, pays a premium for Chinese coal imports.

“The Chinese investors have to deal with huge risks to get in and out of the country. They often have to build infrastructure to access the minerals, so they are looking for their costs to reflect those risks,” Bruce says.

Since he inherited power in 2011, supreme leader Kim has pledged to revive the country’s economy. In October, Pyongyang announced a plan to establish 14 special economic zones to attract more foreign investment. Last year, the government began allowing North Koreans to work in China. But experts wonder whether Kim is committed to opening economic borders or if he will roll back the few existing reforms, as his father did, for fear of losing authority.

Recent visitors to North Korea do not dispute that the country’s economy may be improving.

“There are a lot more taxis on the road. More people are using cell phones. And you would be surprised to see that the restaurants are actually packed,” says Wu Wenxing, a Chinese businessman who has visited the country five times since last year.

No hard figures are available to indicate the country’s economic performance. But according to ongoing research by Noland and Haggard, the country is likely to have run a surplus in the past two years largely because of growing trade with China.

While analysts are still trying to explain the sudden growth in wealth, many see China’s economic presence, especially in the mining industry, as a major contributing factor. Despite Beijing’s support for the latest round of United Nations sanctions against North Korea, bilateral trade between the two nations hit a record high in the first eight months of this year.

Noland said a wealthier North Korea could mean that the country would be less vulnerable to international pressure.

Remco Breuker from Leiden University in the Netherlands agrees. He says that the international community could be forced to readjust how it engages with North Korea. More international investments, he argues, could prod the country to become a better international neighbour.

“For years it has been the premise of US policy towards the North that if you exert enough pressure, the country will collapse. But it’s not happening, and in fact the country is in the black,” Breuker says. “We have to realise North Korea is here to stay.”

North Korea’s parallel development of nuclear weapons would hamper its economic development, Noland says. Most of the nuclear and missile tests would be followed by UN sanctions, a key detractor for international investors.

Expanding the country’s mineral extraction might have an economic downside. Bruce from the East West Centre says it may convince North Korea that it’s better to sell its resources for short-term cash while delaying productive economic changes that would promote long-term growth.

Sunny Lee, a fellow with the Shorenstein Asia-Pacific Research Centre at Stanford University, says that Beijing would not mind a wealthier North Korea as long as it maintains a good relationship with Beijing.

“Given the economic sanctions from the US and its allies, Pyongyang’s economic dependence on China is bound to deepen,” Lee says.

For businessmen like Hao, all is well as long as business is good. “We are expecting to recoup all our investment next year,” he says.

Read the full story here:
Chinese businessmen seek profitable opportunities in North Korea
or Mining North Korean opportunities
South China Morning Post
Kristine Kwok
2013-11-18

According to Yonhap:

North Korea’s trade with China gained 4.4 percent from a year ago in the first nine months of this year, new data showed Tuesday, raising questions about the effectiveness of sanctions put in place to punish the North for conducting its third nuclear test earlier this year.

Trade volume rose to US$4.69 billion between January and September from $4.49 billion for the same period last year, according to the data released by the China Customs Information Center.

The data, seen by Yonhap News Agency, showed that North Korea’s exports to China jumped 9.4 percent to $2.09 billion during the nine-month period, while its imports from China fell 2.3 percent to $2.6 billion.

A South Korean diplomatic source in Beijing suspected that North Korea’s shortage of hard currency might be a factor for the decline in imports.

“North Korea’s lack of foreign currency may be partly attributable to the fall in imports of Chinese goods,” the source said on the condition of anonymity.

During the first nine months of this year, North Korea’s imports of Chinese crude oil, however, rose to 415,000 tons, compared with 402,000 tons for the same period last year.

China did not export crude oil to North Korea in June and July this year, but resumed crude exports in August, according to the source.

In August and September, China exported 165,000 tons of crude oil to North Korea, the source said.

Read the full story here:
N. Korea-China trade up 4.4 pct in Jan.-Sept. despite sanctions
Yonhap
2013-11-5

According to the Daily NK:

North Korean doctors are being dispatched to the Yanbian Autonomous Korean Prefecture of China in order to bring in much-needed foreign currency, a source has reported.

Lee Wong Jong, the manager of an oriental medicine clinic in Yanji, the capital of the autonomous region, contacted Daily NK on the 1st.

“Most North Koreans in Yanji work in North Korean-run restaurants and IT companies, but lately it’s not been hard to find North Korean doctors, too. These doctors are working legally at Chinese hospitals,” he said.

He continued, “They are obtaining official visas from the North Korean government and moving to China to work. They are not in the country as the result of an agreement between China and North Korea, however. North Korea is providing individual doctors with visas so that they can go and earn foreign currency.”

“I know a North Korean dentist working at a hospital. At the same time, he works to help people like himself who have been granted Chinese visas. He essentially plays the role of an employment agency and helps them find work in other hospitals. Many IT workers have come to China too, and he connects those people with companies and factories, too.”

Lee now fears for his friend, however; “A few months ago I started to see less and less of him, and now he has disappeared without a trace.” He explained, “If the North Korean authorities receive a report that one of their citizens has met with a South Korean they order them to return home, no exceptions.”

On the North’s move to provide visas to its doctors, Lee revealed, “North Korean doctors are not well-regarded in China. No one wants to get treated by a doctor from a backward country, so the authorities can’t form an official agreement with China to send them. Granting visas to individual doctors instead is an unofficial way to bring in foreign currency.”

Doctors are not the only profession to receive permission to work and live in China, Lee explained. “In Yanji there are many North Koreans. You can see young Chinese-Koreans in their early 20s driving around in foreign cars. They manage IT companies that employ North Korean labor, and make good money that way.”

He added, “The number of North Korean workers employed in Chinese firms has skyrocketed over the last few years. They now show no outward signs of awkwardness adapting to life in China.”

Read the full story here:
NK Doctors Working in China
Daily NK
Oh Se Hyek
2013-11-1

According to Yonhap:

North Korea’s crop imports from China more than doubled to hit a yearly high in September, data showed Wednesday.

According to the data compiled by Kwon Tae-jin, a senior researcher at the Korea Rural Economic Institute, North Korea imported 67,208 tons of grains and legumes such as flour, rice, corn and bean in September from its neighboring country, compared with 26,804 tons a month earlier.

The surge was attributed mainly to Pyongyang’s increased imports of corn. The impoverished nation bought a total of 50,613 tons of corn last month, nearly nine times the amount imported the previous month, the data showed.

“The big increase in imports would either mean that Pyongyang is running out of its stock amid the regime’s efforts to increase the ration to people since this spring or that it is try to stabilize market prices,” Kwon said.

“Factoring in the forecast of good harvests for the autumn, the North is expected to enjoy a relatively stable supply of crops at least for the rest of the year,” he added.

Read the full story here:
N. Korea’s crop imports from China hit annual high in Sept.
Yonhap
2013-10-30

According to the Asahi Shimbun:

China is holding petroleum that was heading to North Korea from Iran in an apparent attempt by Beijing to maintain its control over Pyongyang, sources said.

According to Chinese sources, the petroleum was part of North Korea’s contract to import about 500,000 tons of condensate, a light oil, from Iran. North Korea, seeking to diversify its energy sources, started discussions on the deal last year.

The agreement was reached with the cooperation of a major Chinese state-run petroleum company.

The condensate is believed to have been shipped from Iran over a number of occasions on tankers registered to a third nation. But Chinese authorities ordered the tankers to stop when they reached the Chinese coast in the Yellow Sea this spring.

The ships were then towed to ports in Dalian, Liaoning province, and Qingdao, Shandong province. Sources said the condensate remains in those ports, which have restricted access to outsiders.

China is believed to have asked North Korea to pay about $2 million (about 196 million yen) for storage expenses.

“Once China realized that North Korea was beginning to depend on Iran for petroleum, China began using various measures to remain engaged so it can maintain its influence over North Korea,” a diplomatic source knowledgeable about relations between China and North Korea said.

Under the North Korea-Iran contract, Pyongyang is to pay Tehran for the condensate, but the condensate itself must be first sent to a Chinese state-run petroleum company.

“Because North Korea does not have the most advanced refineries, it had to ask China to refine the condensate,” a source in the petroleum industry said.

It is unclear what legal basis China is using for holding up the shipments because condensate and other petroleum products needed for daily living are not banned under U.N. economic sanctions imposed against North Korea.

However, one source involved in the transaction said, “As part of the economic sanctions that were imposed against military actions taken by North Korea, inspections were carried out by Chinese authorities, which asked that the petroleum be kept at the port.”

…

Until now, China is said to have provided about 80 percent of the petroleum used in North Korea. The main means of transport were through a pipeline that runs along the Yalu River between the border of the two nations as well as by ship.

According to Chinese customs statistics, the export volume was about 520,000 tons a year.

…

“Not only has a ban on petroleum export shipments been imposed by China, but the total import volume through the pipeline has also been reduced to one-third the level of the same period of the previous year,” a source involved in trade between China and North Korea was told by a North Korean government source in September.

China remains North Korea’s biggest backer, even with the contract with Iran.

Read the full story here:
China holding up shipment of Iranian petroleum to North Korea
Asahi Shimbun
Koichiro Ishida
2013-10-20

Pictured above (Google Earth): The Hyesan – Jilin Bridge

According to Radio Free Asia:

A bridge across the Yalu River connecting northeastern North Korea with China has reopened after more than four months of repairs and reinforcement work, reviving trade and tourism in the area, sources in North Korea said.

Traders eager to sell their goods lined up on both sides of the bridge between Hyesan city in North Korea’s Ryanggang province and Changbai city in China’s Jilin province as traffic resumed on Thursday.

The 500-foot (150-meter) bridge, initially built in 1936 by the Japanese and renovated in 1985, has been reinforced to accommodate trucks weighing up to 30 tons, double the earlier limit.

It had been closed since May, blocking trade and sending prices of consumer goods soaring at local markets in Hyesan, a source in Ryanggang province said.

Thursday’s reopening of the bridge, one of at least three spanning the Yalu River, took place on the anniversary of the ruling North Korean Workers’ Party without much fanfare, the source said, speaking on condition of anonymity.

“The Yalu River Friendship Bridge reopened officially at 10:00 a.m…. There was no special event or meeting for an opening ceremony,” the source told RFA’s Korean Service.

Another source in the province speaking on condition of anonymity said vehicles bound for China loaded with logs and minerals had lined up near the bridge early that morning in anticipation of a rumored reopening.

On the other side of the river in Changbai, trucks carrying Chinese food items and daily necessities had queued up to cross into North Korea, the source said.

The bridge is also a key gateway for Chinese tourists traveling to North Korea’s famed Mount Baekdu, a popular sightseeing destination.

During the bridge’s closure, local authorities in Ryanggang had lost valuable foreign exchange earnings because tours to the mountain had been limited and export of logs and minerals had stopped.

Sources said that although many locals were relieved that trade would be resumed with the bridge no longer closed, others were concerned about the possibility of a sudden outflow of exports of local resources and goods across to China.

A more popular bridge along the Yalu River lies between China’s Dandong city and North Korea’s Sinuiju city.

Annual trade between North Korea and China, its closest diplomatic and trade ally, is worth about U.S. $6 billion. China also supplies nearly all of North Korea’s energy needs.

Read the full story here:
Bridge Across China-North Korea Border River Reopened
Radio Free Asia
2013-10-14

UPDATE 1 (2013-10-15): Yonhap reports on the activities carried out at the expo:

North Korean companies participating in an annual trade fair with China signed a total of 93 preliminary deals worth US$1.6 billion at the event, China’s state media reported Tuesday.

North Korea and its economic lifeline, China, wrapped up the trade expo, the second of its kind, on Monday in the Chinese border city of Dandong with some 130 North Korean firms attending the five-day exhibition.

The North Korea-China Economic, Trade, Culture and Tourism Expo came as China has been deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.

During the trade fair, preliminary investment deals worth $510 million and export deals worth $1.09 billion were signed, the official China News Service reported.

North Korea and China held the inaugural trade fair last year, with $1.26 billion worth of preliminary deals signed.

In the first eight months of this year, two-way trade between North Korea and China stood at $4.09 billion, compared with $4.1 billion for the same period last year, South Korean government data showed.

ORIGINAL POST (2013-10-10): According to Yonhap:

An annual trade fair between North Korea and China kicked off in the Chinese border city of Dandong on Thursday, with some 130 North Korean firms attending the five-day exhibition, organizers said.

The North Korea-China Economic, Trade, Culture and Tourism Expo, the second of its kind, comes as China is deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.

About 500 North Koreans, including a 115-member propaganda troupe, joined the exhibition that features 700 booths for products ranging from foods and garments to mining and machinery equipment, according to the China Council for the Promotion of International Trade (CCPIT), which organized the event.

Of the booths, about 200 were allocated to buyers from Pakistan, Malaysia, India, Russia, Hong Kong and Taiwan, a Dandong branch of the CCPIT said.

North Korea and China held the inaugural trade fair last year, with US$1.26 billion worth of preliminary deals signed.

According to Xinhua:

The second China-DPRK economic, trade, culture and tourism expo has opened in the border city of Dandong in Northeast China’s Liaoning province.

The DPRK’s National Folk Art Troupe performed its ethnic dances at the opening ceremony on Thursday. A 500-member delegation from the DPRK is attending the expo which lasts from Thursday to Monday.

The expo is by far the largest foreign economic and trade event for the DPRK. And more than 90 percent of the country’s foreign trade companies have sent their representatives. Meanwhile there are over 10,000 traders from China.

The expo also attracts companies from Malaysia and Thailand. There are 16 events including promotion of China-DPRK commodities, and DPRK tourism. The DPRK’s investment policies are also to be introduced to attract investors.

The first such expo was held in 2012 with 72 agreements of cooperation signed. They have a combined value of over 1 billion US dollars.

According to KCNA:

The 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO opened on Thursday with due ceremony in Dandong, China.

Colorful events are to be held during the EXPO including trade fair, fine art exhibition, exhibition of photos on tourism and art performance.

Present at the ceremony were officials of the party and government of Liaoning Province and the city and those in the field of culture, economy and trade including Bing Zhigang, vice-governor of the province, citizens in Dandong, Liu Hongcai, Chinese ambassador to the DPRK, and his embassy members and diplomatic envoys of different countries to the DPRK.

Also present there were members of the delegation of the 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO led by Hong Kil Nam, vice-chairman of North Phyongan Provincial People’s Committee, Kim Kwang Hun, DPRK consul general to Shenyang, and Choe Un Bok, chairperson of the General Association of Koreans in China.

An opening speech was made there, which was followed by congratulatory speeches.

The speakers said that the EXPO will be a good opportunity to swap the successes and experience gained in various fields and boost the cooperation between the two countries.

They expressed the conviction that it will contribute to deepening the mutual understanding and trust and promoting the friendly and cooperative relations between the peoples of the two countries.

An art performance was given by the National Folk Art Troupe on the same day.

Prior to this, a reception was given for the participants of the Expo.

Xinhua also published this helpful advice for North Korean policy makers:

China-DPRK economic cooperation is important for maintaining peace and stability in Northeast Asia. China has a long history of investment in the DPRK, and is the country’s biggest trade partner. So what’s it like to do business in the DPRK?

Economic cooperation between China and the DPRK has strengthened as tons of goods are coming in and out the border each day. And the scale of their trade and investment has expanded over the past few decades. But the rapidly developing China-DPRK economic relations have certain problems that need to be solved. Many concerns have been raised in regards to the risk factor when investing in the country.

Today, China’s investment in the DPRK is mainly concentrated on minerals and other strategic resources. And many investors claimed that the main difficulties when they set up businesses in the DPRK is to cope with the country’s frequent policy changes.

Many Chinese companies and manufacturers have come to the exhibition hall for trade talks with the DPRK, and to have a better understanding of the country in which they have invested or intend to invest. The best way to find out the business environment there is to speak with someone who has been there long enough.

“You need to have certain knowledge about the rules and regulations in the DPRK before conducting investments there. A thorough business plan is a good start, and it’s crucial to have a business partner from the DPRK with a strong background,” said Ma Pengxiu, general manager of Dandong Hantong Trading company.

Some Chinese companies that have invested in the DPRK reportedly suffered losses, for which they blame the investment environment in that country. It’s true that enterprises cannot be certain of making profits, no matter which country they invest in they need to cope with local laws and regulations to avoid risks. But it’s also true that the DPRK has to improve its investment environment and make its policies more stable.

“There were companies and individuals who have experienced failures in the investments in the DPRK, so investors in these days are more concerned about the relevant protections from the DPRK side; my advise is to protect your business with a written wontract always,” said Ma.

Needless to say the DPRK delegation at the EXPO this year was well prepared and ambitious in seeking cooperation opportunities with the outside world. The country is keen on drawing investments to beef up its industries. In the meantime the DPRK still needs to take measures to ensure a stable business environment to make it easier for investors to thrive in the country.

Here is a link to the inaugural trade fair post.

Read the full stories here:
N. Korea, China kick off annual trade fair
Yonhap
2013-10-10

2nd China-DPRK Expo opens in Dandong
Xinhua
2013-10-11

Pictured above (Google Earth): The new Yalu/Amnok River bridge under construction

UPDATE 13 (2014-10-31): Opening of new NK-China bridge delayed indefinitely. According to the Daily NK:

The planned opening of the bridge connecting Dandong in Liaoning Province, China with Sinuiju, North Pyongan Province in North Korea has been delayed indefinitely, according a report by China’s state-run Global Times on October 31st.

According to the report, North Korea has not followed the business plan stipulating that it construct access roads to the bridge, and as such, its opening remains on hold. North Korea was charged with construction on access roads for the bridge, but work at the site has yet to begin, in fact, the area continues to be nothing but swathes of farmland.

On the ground in Dandong, the report conveyed the disappointment by many in the area, “This new bridge that was going to be so magnificently built is finished on one side, and a vegetable plot on the North Korean end.” Many traders and people purchasing homes and opening stores in the area were anticipating to benefit from increased commerce between the two cities, which account for 70% of bilateral trade, after the bridge’s completion.

The construction of the new bridge over the Amrok [Yalu] River, to replace the aging “Sino-Korean Friendship Bridge,” was officially proposed by China’s former Vice Minister of Foreign Affairs, Wu Dawei, when he visited North Korea in 2007. However, it was not until October 2009 that former Premier Wen Jiabao visited North Korea to make the deal official, for which China agreed to take on the construction costs. The two countries then finalized plans for the project in February 2010, with China continually pushing for construction to begin in October, only to see them finally begin in December that year after a series of delays.

Over the past four years of construction, China accelerated efforts to build a four-lane highway and other advanced features amounting to 2.22 billion RMB [approximately 360 million USD].

As to why the project has not moved forward despite China’s completion of its end of the deal, “North Korea demanded more investment from China for the connecting roads and has done no construction,” the report stated.

Daily NK previously reported in July about the advanced construction efforts on the Chinese side and predicted delays in the bridge’s opening due to failure by North Korea to uphold its end of the contract.

The story is not completely accurate, however, because the North Koreans have at least begun the process of building a road to connect the bridge to Sinuiju. According to Google Earth satellite imagery dated 2014-6-9 we can see the beginning of road construction:

Here is more in the Hankyoreh.

UPDATE 12 (2014-7-18): The Institute for Far Eastern Studies (IFES) offers an explanation for the lack of progress on the DPRK side of the bridge:

New Amnok (Yalu) River Bridge – Present Conditions and Future Outlook

According to recent reports, the New Amnok (Yalu) River Bridge may not be finished by its projected date of September 2014 due to delays in the construction of roads and customs facilities.

The bridge, which will connect the North Korean city of Sinuiju with the Chinese city of Dandong in Liaoning Province, has advanced into the final stages of construction following the recent completion of the control tower and the bridge deck.

When the bridge is completed, the existing Amnok River Bridge (located approximately 10km away from the new bridge) will be restricted to railroad traffic only, and general road traffic to-and-from North Korea and China will be rerouted to the new bridge.

The existing Amnok River Bridge has been cited as a bottleneck for the blooming trade industry between North Korea and China for several reasons. The bridge, built in 1911, accommodates both a railway and roadway, but has only one lane. Furthermore, its old age has sparked safety concerns; trucks weighing over 20 tons have been prohibited from using the bridge.

Reportedly, China has begun construction on a new commerce zone costing 2 billion RMB (330 billion KRW) that will connect with the New Amnok River Bridge from the Chinese side.

The new commerce zone is set to be built on a 380 thousand square-meter plot of land and will include various services such as border checkpoints, customs, quarantine facilities, and immigration. Business facilities such as hotels, shopping centers and other residential and commercial buildings are also expected to be built in this area.

Once construction finishes and operations begin, China is expecting that the new area will accommodate for the passage of up to twenty thousand cars and fifty thousand people per day. It is also predicted that the new trade zone will be responsible for up to 60 percent of the total trade volume passing between the two countries.

However, on the North Korean side, it appears that construction has yet to begin on any of the necessary immigration facilities such as checkpoints and customs.

It has been reported that since construction of the New Amnok (Yalu) River Bridge began in 2010, abrupt changes in the state of affairs and weakening international ties between the two countries has left North Korea without a financier. North Korea had originally projected total construction and operation costs of 20 million USD (approx. 20 billion KRW), but has yet to secure the money from foreign investors.

In the past, the Chinese government persuaded North Korea into constructing the New Amnok (Yalu) River Bridge, but appears to have lost its previous fervor.

Back in 2007, China’s former Vice Minister of Foreign Affairs, Wu Dawei, proposed the construction of the new bridge under the condition that China will be responsible for the entirety of construction costs. In October 2009, former Premier Wen Jiabao visited North Korea and finalized the agreement.

From the outset, plans for the creation of the New Amnok River Bridge were not drawn up by North Korea, but rather strongly demanded by the regional governments in China’s Liaoning province and Dandong city. North Korea set its focus on the repair of the original existing Amnok River Bridge in order to set a fixed limit on the exchange of personnel and materials, citing regime stability as a reason. However, China persisted, promising to provide financial support for the construction of not only a new bridge, but also for customs facilities, immigration, and a highway connecting the bridge to Pyongyang.

At first, China was actively engaged in supplying North Korea with the financial resources necessary for construction. However, with the increase in nuclear tests, missile launches and increasingly negative internal public opinion, as well as the execution of Chinese ally Jang Song Thaek, China seems to have slowed the pace and now carefully monitors its involvement with North Korea.

In order to protect its domestic and foreign image, it is expected that China will complete construction of the infrastructure on their side of the New Amnok River Bridge within the year. China is also expected to offer less support to North Korea, showing an increasingly passive response.

According to recent reports, North Korea is currently in the process of preparing the customs and immigration facilities in Sinuiju—connected to the existing Amnok River Bridge—to handle procedures after construction of the new bridge is finished. The existing facilities are expected to be used due to North Korea’s inability to finish construction of the new immigration facilities and other connecting roads on time.

North Korea’s Central News Agency (KCNA) introduced the New Amnok River Bridge on a television program in August 2013, boasting that over 3,000 lorries and cargo ships will pass over and under the bridge per day. In the program, it is said that the bridge will be completed by September 2014

UPDATE 11 (2014-7-2): The bridge opening is likely to be delayed (again). According to the Daily NK:

The planned opening of a large new bridge across the Yalu River connecting Dandong in Liaoning Province with Sinuiju is likely to be delayed, Daily NK has learned. The cause of the delay is thought to be North Korea’s failure to make good on its contractual obligations.

“The Chosun side took on the job of constructing the roads, but they are making painfully slow work of it. Because the roads are still not finished, people are wondering whether their initial aim of increasing trade volumes is on its way down the drain,” a source close to the project told Daily NK on the 1st.

“China provided a lot of materials and machinery to the North, but there is a story that this machinery was sent for use on other projects rather than for the bridge construction. The Chinese traders who did harbor high hopes for [economic] opening brought on by the bridge are showing their disappointment more and more,” the source explained.

The partially complete New Amrok [Yalu] River Bridge is designed to connect Langtou new city with south Sinuiju at a total cost of 2.22 billion RMB (approximately 357 million USD). It lies 8 km downstream from the ageing “Sino-Korean Friendship Bridge” (formerly the Amrok [Yalu] River Bridge).

The old bridge is currently the only one that connects the two cities, but, built in 1943, it is wholly unfit for purpose. Trucks that weigh more than 20 tons are not allowed on it due to safety concerns, and it also has just one lane, which restricts trade volumes. Traders had hoped that the new bridge would speed up commerce between the two cities, which account for 70% of bilateral trade despite these structural limitations.

The construction of the new bridge was officially proposed by China’s former Vice Minister of Foreign Affairs, Wu Dawei, when he visited North Korea in 2007. However, it was not until October 2009 that former Premier Wen Jiabao visited Pyongyang and sealed the deal, under which China agreed to foot the bill for construction. The two countries then finalized plans for the project in February 2010, and the groundbreaking ceremony was held in December that year.

The Chinese side has demonstrated its intent to see the completion of the four-lane bridge, with its accompanying management, security and inspection infrastructure.

“In accordance with the plan, China has already got a customs office in place to administer the flow of goods over the bridge,” the source revealed. “But the North has slowed right down, and the talk of trade expansion from before has gone away.”

This declining enthusiasm is tangible in the property market in Langtou, the region of Dandong that ought to benefit the most from bilateral economic activity across the new bridge. “Apartment prices remain where they were three years ago, at roughly 4000 Yuan per pyeong,” explained the source. Pyeong is a Korean unit of measuring area, and amounts to 3.305785m².

“The number of people wanting to learn Korean in Dandong is still the same,” he admitted, “but that’s only because they want to watch Korean dramas. They have already given up on the idea of booming trade with North Korea since they saw those who had been successful going to the wall after the execution of Jang Song Taek.”

In addition to problems with the bridge, Daily NK established in May that almost no progress has been made on the development of two Special Economic Zones in the Sinuiju area (see linked article).

UPDATE 10 (2014-1-14): Xinhua reports the bridge will open in 2014:

A new bridge over the river border between China and the Democratic People’s Republic of Korea (DPRK) is expected to open this year, local authorities said on Tuesday.

About 80 percent of work on the Yalu River Bridge is complete, according to the Transport Department of northeast China’s Liaoning Province.

Construction began on the 3 km bridge at the end of 2010, and will cost 2.22 billion yuan (356 million U.S. dollars).

A joint project between the two countries, the bridge will have four two-way lanes upon completion, according to an agreement signed in February 2010. The new route is expected to boost communication and economic cooperation.

The only bridge connecting the nations was built in 1937. Trucks weighing more than 20 tonnes are not allowed on the one-way bridge, considerably restricting trade volume.

UPDATE 9 (2013-11-8): Yonhap releases a photo of the bridge nearing completion:

UPDATE 8 (2013-10-14): According to the Global Times:

A new bridge will link China and the Democratic Republic of Korea (DPRK) by 2014 and greatly boost exchange and trade between the two countries, officials said Monday.

A new border trade complex, complete with customs services, border control and quarantine services, as well as office buildings, hotels and markets will also be operational by 2014, according to Shi Guang, mayor of Dandong city, where the bridge is located.

The whole complex will cover 38 hectares and cost two billion yuan (325.8 million USdollars) to build, Shi said.

The new bridge is 10 kilometers down the Yalu river from the old bridge, which was built in 1937 and has been sole major passage on the China-DPRK border.

The two governments agreed to build the new bridge in early 2010. It will have four lanes and a span of about three kilometers.

The new facilities will be able to handle as many as 20,000 vehicles and 50,000 people a day and Dandong authorities expect that businesses done at the trade complex will account for 60 percent of China-DPRK trade.

UPDATE 7 (2013-10-10): The Institute for Far Eastern Studies (IFES) offers some new information:

The construction of the New Yalu River Bridge, the new suspension bridge over the Yalu River, connecting China’s Dandong city (Liaoning Province) and North Korea’s Sinuiju city (North Pyongan Province) is in its final stages.

Currently, the volume of trade between Sinuiju and Dandong is heavy, and the Yalu River Railway Bridge is saddled with transporting goods. It is hoped that the new bridge will help ease that burden. Several hundred workers are involved in its construction.

According to one Dandong resident, “Despite North Korea’s nuclear test and China’s decision to impose sanctions against the North, construction of the New Yalu River Bridge has been relentless.” The new bridge is considered as an important symbol of Sino-DPRK economic cooperation. Its construction is believed to be well on track.

The total project cost of the construction is estimated to be 2.22 billion CYN (about 390 billion KRW or 3.6 million USD). China is covering the bridge’s construction costs and has reportedly introduced a variety of new technologies to improve the precision and safety of the structure. Once completed, the bridge will be 3 km in length, with the height of its two pylons at 197 meters and the distance between pylons to be about 636 meters.

Travel from Pyongyang to Dandong currently takes 4 hours; that time is expected to be cut in half as the new suspension bridge is located 8 km downstream from the existing railway bridge.

If the construction progresses smoothly, the bridge should open for operation by July 2014. The Korean Central News Agency (KCNA) reported on August 23 that the new bridge should accommodate over 3,000 55-tonne freight cars per day, and 3,000-tonne ships will be able to pass under the bridge.

Along with the new bridge, China and North Korea are also engaged in joint development of a new district in Dandong and the Hwanggumpyong Special Economic Zone (SEZ). Despite the lingering concerns over the development of these areas after the death of former North Korean leader Kim Jong Il, the development has reportedly continued uninterrupted.

Despite the continued international and other sanctions against North Korea, the development of Hwanggumpyeong SEZ is speculated to pick up speed after the completion of the bridge. The Hwanggumpyeong SEZ is a project that North Korea put forth in response to the “May 24 Sanctions” imposed by the South Korean government after the sinking of ROKS Cheonan. These sanctions essentially had brought an end to all inter-Korean economic cooperation and exchanges (with the exception of the operations at the Kaesong Industrial Complex).

Last September, a groundbreaking ceremony for the administrative building in the Hwanggumpyeong SEZ was held. Since then a customs building, security facilities, management office, street lights, and transport inspection office are reported to have been built or are currently under construction.

UPDATE 6 (2013-8-23): New KCTV footage of the bridge can be seen here:

UPDATE 5 (2013-6-4): I wrote an update on the construction of the bridge at NK News.

UPDATE 4 (2012-11-7): The China Daily’s English-language Dandong page reports on the status of the bridge:

Construction on the new bridge, with an investment of 2.22 billion yuan, began at the end of 2011. According to the Dandong government, the main structure of the bridge has been completed. It is expected to become operational in July 2014.

UPDATE 3 (2011-6-25): Adam Cathcart took some pictures of the new bridge construction–so it is progressing!

UPDATE 2 (2011-2-2): For some time I have been trying to track down the location of the proposed new Yalu River bridge which will connect the DPRK and China.  Thanks to a story in the Daily NK, I was able to map it out on Google Earth:

Pictured above: Location of the proposed Yalu Bridge (Google Earth) [UPDATE-The bridge was ultimately moved from this location]

According to the Daily NK:

According to someone inside the construction company responsible for the bridge’s development, “The development of Xinchengqu has been on the drawing board for two years. This time, the construction of the New River Yalu Bridge was confirmed between China and North Korea. This is a very good chance for us, from now on Xinchengqu will become the center of China-North Korea trade.

According to Dandong’s urban development plan, the bridge will connect Busan-Seoul-Pyongyang-Dandong and Beijing in the future, implying that future trade and cooperation between a reunited Korea and China is being taken into account.

China is providing the construction costs for the New Yalu River Bridge; an estimated one billion Yuan (approximately $145 million).

This particular location is interesting because it completely bypasses the city and county of Sinuiju–where earlier reports (below) described its location.  The bridge actually crosses from China into Sopuk-ri, Ryongchon County (서북리, 룡천군)—in the middle of nowhere.  There is absolutely no infrastructure at this location for administering trade between the DPRK, China, and prospectively South Korea, so it will all need to be built from scratch or moved from Sinuiju. Either way, this is bad news for Sinuiju which today benefits financially as both the capital of North Pyongan Province and as the gateway for the majority of trade between the DPRK and China.  It looks like Ryongchon may be taking some of their business!

In addition, the North Koreans have been widening  the Sinuiju highway and “beautifying” all of the surrounding residential areas in anticipation of greater loads of traffic coming from China.  See more about this here.  This could all be for naught if the Chinese end up building a trade artery south of all this construction!

UPDATE 1 (2010-12-31): (KCNA h/t Aidan Foster-Carter) The ceremony did take place to mark the launch of the bridge’s construction:

Pyongyang, December 31 (KCNA) — A ground-breaking ceremony for a DPRK-China bridge across the River Amnok took place in Dandong City, China, on Friday.

Present there from the DPRK side were its government delegation headed by Kim Chang Ryong, minister of Land and Environmental Conservation, and from the Chinese side Li Shenglin, minister of Transport, Hu Zhengyue, assistant to Foreign Minister, and Chen Zhenggao, governor of the Liaoning Provincial People’s Government, and other officials concerned of the central and local governments of China.

Speeches were made by Kim Chang Ryong, Kim Song Gi, vice-minister of Foreign Affairs, and Choe Jong Gon, chairman of the North Phyongan Provincial People’s Committee, from the DPRK side and Li Shenglin, Hu Zhengyue, and Chen Zhenggao from the Chinese side.

They said that two rounds of General Secretary Kim Jong Il’s visit to China this year marked historic events of epoch-making significance in developing the DPRK-China friendship on a fresh high stage.

They expressed belief that the bridge would make a contribution to demonstrating once again the great vitality and invincible might of the DPRK-China friendship steadily growing stronger.

The bridge will be successfully built as a symbol of the DPRK-China friendship and a structure of the two peoples, they added.

Then followed a ceremony of the ground-breaking for the project.

The Ministry of Transport, the Liaoning Provincial Committee of the Communist Party and the Liaoning Provincial People’s Government of China arranged a reception in connection with the ceremony.

ORIGINAL POST (2010-12-28): According to Daily NK:

It was reported that there will be a ceremony to celebrate the start of construction of the New Yalu River Bridge linking Shinuiju and Dandong, China, before the end of the year.

Yonhap News yesterday quoted Shenyang and Dandong sources saying that both the North Korean and Chinese authorities decided to hold the ceremony this year and have started preparing for the event.

The source in Dandong said, “Instructions that the start of the bridge construction must not slip to next year were handed down from the Chinese government last week, so the governments of Dandong City and Liaoning Province urgently are trying to set a date. It will likely happen the 30th or 31st.”

The source also explained the reason why the Chinese government is hurrying to start the construction, which was supposed to start early next year. “Both China and North Korea intend to show observers domestically and internationally they have the will to construct the bridge.”

In Langtou, Dandong, where one end of the bridge will be built, a construction board has been set up and says the New Yalu River Bridge will connect to Jangseo in the southern part of Shinuiju.

China and North Korea agreed to construct the bridge in October 2009, and in February, the Vice Minister of Foreign Affairs of North Korea, Pak Gil Yon, and Chinese Assistant Foreign Minister Wu Hailong signed the agreement in Dandong, China.

Dandong City had announced plans to start construction of the bridge in October, but it has been delayed for uncertain reasons. It was rumored there was conflict over the construction of the bridge because North Korea had requested additional aid from the Chinese government.

Researcher Jeon Byung Gon of the Korea Institute for National Unification said in a telephone interview with The Daily NK that, “The ceremonial ground-breaking will be a chance to promote the friendship between China and North Korea again.”

Researcher Jeon explained that, “So far, there have been several impediments to trade such as quotas, outdated facilities for transportation, both countries’ border management, etc. However, when the New Yalu River Bridge is constructed, such limitations can be resolved and trade between China and North Korea can be revitalized.”

He predicted, “Since they are trying to carry out the construction in a hurry, economic cooperation and friendship relations between two countries will be taken to the next level.”

Also, from the Choso Ilbo:

A source in Dandong said Wednesday that North Korea and China will start construction of the bridge as early as Friday. The two sides agreed to build the bridge during Chinese Premier Wen Jiabao’s visit to North Korea in October last year, with work expected to start this October.

China insists on having the bridge connect the newly renovated area of southern Dandong and southern Sinuiju, but North Korea wanted it to cross over Wihwa Island in Apnok River and connect Dandong with the old part of Sinuiju. The North claimed the route preferred by China would necessitate building a long embankment but in fact seems to have been nervous that a direct link to Pyongyang would cause security concerns like making it easier for North Koreans to flee.

But the North seems to have caved in. A source said construction will begin in March but a groundbreaking ceremony will be held before the end of this year.

Meanwhile, transport of goods and products has picked up via the Hunchun- Rajin-Sonbong route as part of an economic cooperation project. Around 500 truckloads of coal from China’s Jilin Province were shipped out of Rajin-Sonbong Port on Dec. 7 and are being transported to Shanghai across the East and South seas.

Read the full stories here:
New Yalu Bridge Groundbreaking This Year
Daily NK
Mok Yong Jae
12/28/2010

N.Korea’s Cross-Border Business with China Picking Up
Choson Ilbo
12/30/2010