North Korean Economy Watch

According to Yonhap:

North Korea’s exports to China rose 8 percent on-year to US$1.85 billion in the first eight months of this year, thanks to higher exports of coal, ores and woven garments, a South Korean diplomat said Monday.

The North’s imports from China fell 6 percent on-year to $2.24 billion in the eight-month period, with two-way trade totaling $4.09 billion, said the diplomat at the South Korean Embassy in Beijing.

Total trade volume between North Korea and China was little changed in the January-August period, compared with $4.1 billion for the cited period a year earlier, the diplomat said on the condition of anonymity, in a sign that their trade is on a recovery track.

It was not immediately clear, however, whether the rebound in bilateral trade meant that Beijing might ease its tougher stance on Pyongyang’s nuclear weapons program.

“North Korea’s exports of coal and ores to China showed a double-digit growth during the eight-month period, despite declines in their international spot prices,” the diplomat said.

North Korea’s traditional ally has become increasingly frustrated with its wayward neighbor, particularly after the North’s third nuclear test in February in defiance of China. Beijing voted in favor of tougher sanctions by the United Nations Security Council to punish Pyongyang for conducting the nuclear test.

In May, the Bank of China closed accounts with North Korea’s Foreign Trade Bank, which was accused by the U.S. of helping finance the North’s nuclear weapons program.

Last month, China disclosed a list of weapons-related goods banned for export to North Korea, highlighting Beijing’s commitment to enforcing international sanctions against Pyongyang.

Still, many Chinese businesses keep close trading ties with North Korea, supplying key commodities and hard currency to the North.

Yonhap also offered additional information in an artiucle published by the Korea Herald:

However, he said sales of clothing topped $290 million as of end-August, compared to $200 million during the same period last year.

On imports, the North brought in mostly crude oil, food and fertilizers from China, although overall numbers were down 6 percent on-year.

Imports of food and fertilizers were down 57 percent and 27 percent, respectively, with crude imports dipping 6 percent compared to the year before.

The North has been importing less food from China after a good harvest last year.

Read the full story here:
N. Korea’s exports to China rise 8 pct in Jan.-Aug.
Yonhap
2013-10-7

N. Korea-China trade in 2013 largely unchanged from previous year
Korea Herald
29103-10-9

Pictured above (Google Earth): A map of the Khasan-Rajin Port rail service.

UPDATE 15 (2014-4-30): According to a new article in Yonhap, the new railway line is not really being used:

Russia appears to be preparing for a test operation of its newly renovated railway linked to North Korea, but the economic feasibility of South Korea’s joining the logistics project remains to be seen, a Seoul diplomat said Wednesday.

…

“I have been sensing that Russia is preparing to export its coal through the Rajin-Khasan railway in the near future as part of an experiment,” Lee Yang-goo, council general in Vladivostok, told reporters. “But it seems that there is no substantial demand for the rail line now.”

The project is part of Russia’s ambition to set up a rail road linking Asia to the Eurasian region. Last year, South Korea agreed with Russia to extend the track to South Korea.

Seoul officials said that they may be able to finish linking the rail to South Korea’s southern port city of Busan and put it into operation as early as next year, but experts have said feasibility of the plan remains to be seen.

Several factors, including economic and technological ones, should be taken into account before South Korean firms can join the logistics project, the council general said. “The economic feasibility should be reviewed foremost.”

UPDATE 14 (2014-4-9): Russians test coal shipment to Rason. According to the International Railway Journal:

According to the Moscow Times:

Russian Railways has put to use the North Korean port it helped to upgrade recently.

The state-owned railway operator said Tuesday it had started carrying Siberian coal to the port of Rajin, in what may be the first attempt to utilize the harbor after it reopened in September.

“The company has started to provide a full suite of services to ship coal through Rajin to Asia-Pacific countries,” said a statement from Russian Railways logistics subsidiary, RZhD Logistika.

A joint venture between Russian Railways and the North Korean Ministry of Railways has rebuilt one of the port’s wharfs and a rail link connecting it to Russia in a rare example of foreign involvement in the economy of the isolated dictator state. The joint venture, RasonKonTrans, where Russia holds 70 percent, sought to relieve the congestion at Russia’s Pacific ports.

Coal miner and steelmaker Mechel is the sender of the coal consignments, according to Nadezhda Malysheva, chief editor of port industry portal PortNews.

Both Mechel and RzhD Logistica spokespersons declined to comment.

Russian Railways chief Vladimir Yakunin traveled to Rajin for a grand opening of the rail service and the wharf in September. The company invested 9 billion rubles ($250 million) to upgrade both. Russian engineers supervised the work, while Koreans largely contributed with unskilled labor.

The Russian terminal at Rajin, Asia’s most northerly all-year ice-free port, will at first handle just coal freight from Russia to ship it further to China’s eastern and southeastern provinces. Further plans are to equip it to be able to provide container services.

RZhD Logistika loaded a total of 9,000 metric tons of coal on two freight trains of 130 cars each to carry to Rajin at the end of last month, it said in the statement. The cargo will next go to China’s ports of Shanghai, Lianyungang and Guangzhou.

Current load capacity of port Rajin is 4 million tons of coal a year.

Russia’s biggest coal export port, Vostochny, which sits on the Pacific coast, has the capacity to handle 18 million tons a year, Malysheva said. It and the other key coal port of Vanino operate at the top of their capacity, as exports of the fuel to Asia have increased, she said.

Coal remains the principal fuel for electricity generation at power plants in China. But its coal price declined 10 percent last year because of strong rivalry among Russian suppliers and competition from Australia, the RZhD Logistika statement said.

Even so, the government last week backed a plan to boost development of the coal-mining industry in the country’s Far East to cater to Asian markets. The idea is to have a shorter transportation leg for the shipments, compared with the distance that the coal travels from Siberia.

This Russian-language source has additional information.

Read the full story here:
First Russian Coal Heads to North Korean Port
Moscow Times
Anatoly Medetsky
2014-4-8

UPDATE 13 (2014-4-8): Business organization information. According to the Moscow Times:

A joint venture between Russian Railways and the North Korean Ministry of Railways has rebuilt one of the port’s wharfs and a rail link connecting it to Russia in a rare example of foreign involvement in the economy of the isolated dictator state. The joint venture, RasonKonTrans, where Russia holds 70 percent, sought to relieve the congestion at Russia’s Pacific ports.

…

Russian Railways chief Vladimir Yakunin traveled to Rajin for a grand opening of the rail service and the wharf in September. The company invested 9 billion rubles ($250 million) to upgrade both. Russian engineers supervised the work, while Koreans largely contributed with unskilled labor.

UPDATE 12 (2013-9-23): Rajin-Khasan Railway Section Opens for Service. According to KCNA:

The Rajin-Khasan railway section has been successfully rebuilt in line with the DPRK-Russia Moscow Declaration, signed in August 2001. The section was opened for service on Sunday.

Its opening serves as a landmark in promoting the friendly and cooperative relations between the DPRK and Russia, strengthening the economic and cultural ties in the Asia-Pacific region and ensuring the common prosperity of regional countries.

In the first year of the new century, historic meeting and talks were held between Kim Jong Il, leader of the Democratic People’s Republic of Korea, and V.V. Putin, president of the Russian Federation, resulting in the adoption of the DPRK-Russia Moscow Declaration.

The declaration expressed the will of the two countries to make every possible effort to carry into practice a plan for opening railway transit linking the DPRK, Russia and Europe. Such plan was the first phase for wide-ranging cooperation between the two countries, which came under spotlight of the world.

At that time some forces criticized the plan as a “daydream”, displeased with significant cooperation between the two countries as well as peace and prosperity of the Korean Peninsula.

However, the project plan went into practice in October 2008 on the eve of the 60th anniversary of the establishment of the bilateral diplomatic relations thanks to the unshakable will of the two countries and the active cooperation of their railway workers.

At the ground-breaking ceremony for the project, which was held in front of the DPRK-Russia Friendship Pavilion in the area of Tumangang Railway Station in Rason City, V. I. Yakunin, president of the Russian Railways Company, said that the world would soon witness the longest railway transit, extending more than 10 000 km, through which 100 000 containers would be transported annually from 2013.

At last, the Rajin-Khasan railway section has been successfully rebuilt this year marking the 65th anniversary of the establishment of diplomatic relation between the DPRK and Russia. This would bring a large-scale cooperation project between the two countries into practice, ensuring their and regional development and interests.

The railway section from Rajin to Khasan will be helpful to the economy, transport service and people’s wellbeing of the two countries. It can also develop into an international transit between Asia and Europe.

The facts show the vitality of cooperation documents of the two countries, including the DPRK-Russia Moscow Declaration, and the noble idea carried in them.

The friendly and cooperative relationship between the DPRK and Russia will grow stronger with the geopolitical importance of Northeast Asia.

Choson Exchange offers additional detail and other news from Rason here.

UPDATE 11 (2013-9-22): It appears that Russia – Rajin rail service has been launched (again). According to KCNA:

Rajin-Khasan railway section has been successfully rebuilt and opened for service with due ceremony in Rajin on Sunday.

The opening of the section will greatly contribute to developing the friendly and cooperative relations between Russia and the DPRK.

Present at the ceremony from the DPRK side were Jon Kil Su, minister of Railways, O Ryong Chol, vice-minister of Foreign Trade, Ri Chol Sok, vice-chairman of the State Commission for Economic Development, Jo Jong Ho, chairman of the Rason City People’s Committee, Im Chon Il, consul general of the DPRK to Nakhodka, officials in the field of railways and people in Rason City.

Present there from the Russian side were V. I. Yakunin, president of the “Russian Railways” Company, Alexei Tsijenov, vice-minister of Transport, Sergey Sidorov, first vice-governor of the Maritime Territory Administration, Alexandr Timonin, Russian ambassador to the DPRK, Vyacheslav Tsupikov, consul general of Russia to Chongjin, and Russians including those concerned with the railways.

Diplomatic envoys to the DPRK also attended.

V. I. Yakunin in the opening ceremony said the section has opened for service under Russia-DPRK Moscow Declaration signed by the top leaders of the two countries in 2001.

To press for the renovation of the railways running through the land of Korea will be of great contribution to the development of economic cooperation in the Asia-Pacific region in the future, he stressed.

Minister of Railways of the DPRK in his speech said that the plan of linking DPRK-Russia railways serves as a model of wide-ranging bilateral cooperation which meets the common progress and interests of the two peoples.

He expressed the conviction that the operation of the opened railways section will be successful as it was made on the principle of mutual respect and cooperation between the railway transportation fields of the two countries.

There were congratulatory speeches.

The ceremony ended with the playing of national anthems of the two countries. It was followed by a reception.

According to Yonhap:

After years of work to directly connect railway tracks between Russia and North Korea, a 54-kilometer section linking border areas of the two countries reopened Sunday with a ceremony in Rason, a special economic zone in northeastern North Korea.

A special train carrying a group of reporters arrived at Rajin Port in Rason from Khasan in the Russian Far East, making it the first train to travel between the two countries without changing bogies at the border.

Trains had traveled on the section since the Soviet era. But given differences in track width between the Russian side and the North Korean side, workers had to change bogies every time a train crossed the border.

With the end of overhaul work, North Korea appears poised to promote the development of its special economic zone, while Russia seeks to revitalize the Trans-Siberian Railway by linking it, in the future, to a railway system that would run through the Korean Peninsula.

In 2008, the two countries started work to lay Russia-sized railway tracks from the Russian border area to Rajin Port after Russian President Vladimir Putin and then North Korean leader Kim Jong Il agreed in August 2001 to directly connect the two railway systems.

Moscow shoulders 70 percent of 8.3 billion ruble, or 25.8 billion yen, in costs to lay the new tracks and build the North Korean port, while Pyongyang covers the remainder.

The two countries conducted a trial run on the section using a freight train in October 2011. They initially planned to launch commercial runs in autumn last year, but the plan was delayed until now.

Bloomberg adds the following data:

Initially, the 54-kilometer (33-mile) line will transport Russian coal to markets in the Asia-Pacific region, OAO Russian Railways Chief Executive Officer Vladimir Yakunin said at the ceremony in Rajin. The second phase of the project will involve the construction of a container-handling facility and potentially an oil terminal at the North Korean site, he said.

“Our common objective is for this link and port to be a pilot scheme for the restoration of a single transport system in North and South Korea that would link the peninsula to countries that gravitate to this region, to Europe via Russia,” Yakunin said. The CEO said he hopes the plan will help promote peace between the two Koreas, which remain technically at war following the conflict 1950-53 that divided the countries.

The route is part of a larger project, dubbed the Iron Silk Road, that would connect Russia’s Trans-Siberian Railway to South Korea via the North for an overland route cutting transportation costs to Europe. Success depends on improved ties between South Korea and its isolated Communist neighbor.

Reuters adds the following data:

Yakunin said the railway and container terminal, a project worth 9 billion roubles ($283 million), would work at a capacity of 4 million metric tons a year within two years.

Here is some additional background information:

Practical implementation of the project began in 2008, when RZD and North Korea’s Ministry of Railways signed a cooperation agreement. In October of that year, Tumangan station saw the ceremonial laying of the first link of the rails and sleepers that marked the beginning of the reconstruction of the Khasan – Rajin railway section.

In 2009, a joint venture, RasonKonTrans, was set up by Russian Railways Trading House, a subsidiary of RZD, and the port of Rajin, in order to implement the project. RasonKonTrans has in turn concluded a 49-year leasing arrangement of the railway line between Tumen – Rajin with the Donghae company of North Korea’s Ministry of Railways. The work was financed from RasonKonTrans’ share capital, as well as by funds the joint venture was able to borrow based on the project’s business plan. More than 5.5 billion roubles had been invested in the reconstruction of the Khasan – Rajin railway line and 3.5 billion roubles in the port terminal.

The final construction phase to create a universal intermodal exchange terminal at the port of Rajin has now begun, including a range of measures ranging from dredging, building a new quay wall and equipping storage yards, through the construction of industrial and office buildings and facilities to laying railway lines within the terminal itself. Yakunin continued:

“The port is designed to handle transhipment volumes of 4 million tonnes of cargo, but that is not the limit. We are confident that the cargo base will expand and that containers will be shipped through the port. The construction of the port terminal is almost complete, and we are already seeing interest from international customers and partners.”

Officials from both countries say they are working together to finalise the timetable and the joint regulations which will govern the movement of trains on this section. To ensure the interoperability of the new line with both North Korea’s railway network and the Russian rail network, there are plans to create a single control centre with the participation of experts from the RasonKonTrans joint venture and the Donghae transport company of North Korea’s Ministry of Railways.

More from RT here.

UPDATE 10 (2013-6-25): It appears that regular rail service never materialized. According to Siberian Times:

Talks in Moscow between Vladimir Yakunin, President of Russian Railways, and Jeong Gil Soo, North Korea’s Minister of Railways (MOR) agreed the final details on the Khasas-Rajin link.

The project is being implemented in accordance with agreements reached in 2000 by Russian President Vladimir Putin and then North Korean leader Kim Jong Il. It is linked to cooperation between the two countries and forms part of a project to restore traffic on the entire Trans-Korean Main Line.

‘Over the long term, this will allow most traffic between South Korea, Europe, Russia and the CIS countries to be sent by rail by the Trans-Siberian Railway,’ said one report.

The new agreement allows for a single control centre ‘with the participation of experts from the joint ventures RasonKonTrans and ZHTK Donghae MOR from North Korea to handle traffic management and facilitate collaboration with the entire railway network in North Korea. The parties also agreed to develop instructions for the movement of trains and a train timetable’, stated RIA Oreanda.

The project involves reconnecting the combined dual-track railway with 1520 mm and 1435 mm gauges on the stretch from the Russian border to the port of Rajin in North Korea, a distance of 54 km. This includes the reconstruction of three tunnels, the repair a border railway bridge and construction of a freight terminal with an annual capacity of 4 million tons at Port Rajin.

The report continued:’The project is being implemented by the joint venture RasonKonTrans, which was specially set up in 2008 and is owned by OAO RZD Trading House and the port of Rajin.

‘The stretch between Rajin and Tuman stations is estimated at 99.8% complete. Work on commissioning the signalling, centralisation and blocking equipment has been completed along the entire section with the exception of Rajin station.

‘The tunnels are now fully ready. As of mid-May 2013, all the work to replace the timber on the Korean border bridge ‘Friendship’ has been carried out. Currently, work is underway to finish the bridge and install the railing.

‘At the port of Rajin, concrete is being laid and building foundations are being installed at the administrative and amenity building, repair shop and spare parts warehouse, work has begun on laying and ballasting the railway lines within the terminals and utility lines are being laid.

‘Equipment continues to be installed at the harbour wall. Work on installing outdoor lighting and fencing the port terminal’s territory is also ongoing’.

UPDATE 9 (2012-4-2) : DPRK and Russia to start cross-border freight train service in October. According to KCNA:

Rajin-Khassan Cargo Train Service to Begin in October

Pyongyang, April 2 (KCNA) — A Rajin-Khassan cargo train service will run from October this year.

Kim Chang Sik, a department director of the DPRK Ministry of Railways, told KCNA that the laying of railroad and renovation of railway stations, tunnels and communications facilities are now under way in the section.

The railway project was highlighted in the historic DPRK-Russia Moscow Declaration, which was signed in August 2001, he said, adding:

In line with the declaration, a cooperation agreement between the DPRK Ministry of Railways and the Russia Railway Holding Corporation was concluded in April 2008 to be followed by an agreement on joint venture between Rajin Port and the Corporation.

A contract on the lease of the Rajin-Tumangang railway was made between the Ministry’s Eastern Railway Ryonun Company and the Rason International Joint Venture Container Terminal, under which the 54 km-section has been rebuilt into a mixed track from October 2008.
A trial train service took place in October 2011 between Rajin of the DPRK and Khassan of Russia.

At least 100,000 containers will be yearly carried along the line.

This section will serve as an international railway container transport line linking Northeast Asia with Europe.

KCNA also offered this video.

Yonhap also reported:

North Korea and Russia will start a cross-border cargo train service in October, Pyongyang’s state media reported Monday, in a move that could make a North Korean port a regional hub for Europe-bound shipments.

The announcement came more than three years after the two countries launched a project to rebuild two rail lines between Russia’s Far Eastern border town of Khasan and North Korea’s northeastern port city of Rajin.

The North designated Rason, which includes the Rajin port, as a special economic zone in 1991 and has since striven to develop it into a regional logistics hub close to both China and Russia.

In October, North Korea and Russia held a test run on the 54-kilometer-long railway line.

The proposed cargo service can handle 100,000 shipping containers each year, the North’s official Korean Central News Agency said in a dispatch.

The renovation project, if completed, will offer a new route of container transportation between Northeast Asia and Europe, the dispatch said, and could significantly reduce shipping time and costs.

The freight service could also help boost relations between North Korea and Russia, including their economic cooperation, the dispatch said.

The trade volume between North Korea and Russia stood at US$110 million in 2010, the latest year for which statistics are available, according to South Korea’s state-run Korea Trade-Investment Promotion Agency.

Russia maintains friendly ties with North Korea, though its leader Dmitry Medvedev has strongly denounced North Korea’s rocket launch set for sometime between April 12 and 16.

Medvedev made the remarks during summit talks with South Korean President Lee Myung-bak in Seoul last month on the sidelines of an international nuclear summit, according to Lee’s office.

Historical posts on this topic below:

(more…)

…although I cannot find a copy of it anywhere.  It is probably being sent around in PDF form and only available in Chinese.

According to the New York Times:

In a sign of growing concern about North Korea’s nuclear ambitions, China published a long list on Tuesday of equipment and chemical substances to be banned from export to North Korea for fear they could be used in adding to its increasingly sophisticated nuclear weapons programs.

If put into place, the export controls would be some of the strongest steps taken by China, the North’s closest ally, to try to limit the country’s nuclear programs. The announcement indicates that China is now following through on some United Nations Security Council sanctions it approved months ago, according to a noted American arms expert.

The list of banned items was released amid a flurry of reports suggesting that North Korea is accelerating its two nuclear weapons programs. Two weeks ago, new satellite photographs showed that North Korea might be resuming production of plutonium at its newly reconstructed nuclear reactor at Yongbyon. And this week, two American arms experts reported that North Korea appeared to have learned to produce its own crucial components for uranium enrichment.

The move also comes less than a week after China made an unsuccessful attempt to revive talks aimed at persuading the North to give up its nuclear capabilities. The United States continues to resist restarting the talks, which North Korea has used in the past to extract concessions without making long-term changes to its nuclear program.

“The release of the new export control list is a signal China is concerned about the speeding up of weaponization” of North Korea’s nuclear capabilities, said Zhu Feng, the deputy director of the Center for International and Strategic Studies at Beijing University, who called the move “very important.” In particular, he said, the Chinese are concerned about resumption of plutonium production at the Yongbyon complex, the centerpiece of North Korea’s nuclear program.

Another Chinese expert on North Korea, who declined to be identified because of his position in the government, said the publication of the list “says that China is increasingly unsatisfied with North Korea’s actions.”

“This is one of the practical actions to show it,” he said.

Both plutonium and highly enriched uranium can be used in nuclear bombs, but analysts say the North’s plutonium program is much further along. At least two of the three bombs the country has tested used plutonium.

China has long resisted punishing North Korea for its nuclear programs, but has appeared increasingly frustrated as the North’s young leader, Kim Jong-un, has appeared to ignore Chinese pleas for moderation. China agreed to the United Nations sanctions after the North conducted a nuclear test this year over Chinese objections.

The North responded to the sanctions with months of nuclear threats against South Korea and the United States, which, analysts say, ended only after China exerted strong pressure, apparently fearful of instability that could harm its economic progress.

David Albright, the American expert who said China was now implementing the United Nations sanctions passed in March, added that the Chinese ban “will help, since North Korea procures so much from China.” Mr. Albright, the president of the Institute for Science and International Security, added that China could take additional measures to “dramatically increase the inspection of goods into North Korea by road and rail.”

China has moved before to stop the export of other technologies that could be used in nuclear programs, including missile technology, though it did not single out any countries when it did so.

The items on the list China released Tuesday were called “dual-use technologies” because they can be used for either civilian or military purposes, and they included items that could be used to build more chemical weapons and to make biological weapons.

Banned items include Ebola, a virus that can be used for medical research as well as a biological weapon; nickel powder; radium; flash X-ray generators; and microwave antennas designed to accelerate ions. China’s Commerce Ministry, the Ministry of Industry and Information Technology, the General Administration of Customs, and the Atomic Energy Authority jointly published the list.

In a statement, the Ministry of Commerce said the items in the 236-page document were prohibited from being sent to North Korea because “the dual-use products and technologies delineated in this list have uses in weapons of mass destruction.”

Reuters also adds:

Released by the commerce ministry along with the Ministry of Industry and Information Technology and the China Atomic Energy Authority, the document describes items that could be used to build nuclear and chemical weapons, as well as technology that could build and fuel nuclear reactors.

Yonhap adds:

The ban took effect on Monday (September 23).

Read the full stories here:
China Bans Items for Export to North Korea, Fearing Their Use in Weapons
New York Times
Jane Perlez
2013-9-24

China releases list of goods banned from export to North Korea
Reuters
Megha Rajagopalan
2013-9-23

China issues long list of banned items for exports to N. Korea
Yonhap
2013-9-24

According to the Daily NK:

Following the formal tightening of controls along the Sino-North Korean border for much of this year, it has emerged that smugglers have been suffering at the hands of the National Security Agency (NSA) [More properly Ministry for State Security-MSS]*. NSA officers have been described as engaging in “excessive” interrogation techniques in order to build their credentials and improve their bribe-taking, a source inside North Korea claims.

“A week ago, someone from a family that smuggles second-hand clothes with Chinese merchants was caught by a border patrol as he was receiving the goods, and is now getting interrogated by the NSA,” a North Korean source based in Yangkang Province reported to Daily NK on September 16th. “When I went to meet him at the NSA, I found that his limbs had been broken with a piece of wood. His face was so beaten up I couldn’t even recognize him.”

According to the source, people caught smuggling used items along the border with China used to pay a bribe of around 1000 Yuan approx. $160) to secure their release, but now that has risen to 5000 Yuan (approx. $800). The rise in beatings is believed to have occurred because smugglers are unable to pay the higher bribe rate.

“If smugglers are detained by border guards they are supposed to pay 5,000 won now, and if they don’t have the money they get handed over to the NSA,” the source confirmed. “If that happens they have to pay 5,000 to 10,000 Yuan, but poorer ones find it impossible to do that.”

“To a smuggler living off selling used clothes, 10,000 Yuan is an very large amount of money,” continued the source. “While smugglers’ families may do everything they can to raise the money to pay for the release, selling everything they have wouldn’t make that amount of money.”

“As Chuseok approaches there is a rise in smuggling activity, and this is being used by the border patrols and NSA to make a killing off ordinary people,” the source went on to allege. “Some particularly unsavoury NSA agents first show the relatives the broken limbs of a family member prior to demanding money.”

*Added by NKeconWatch

Read the full story here:
Smugglers Facing Big Fines and Beatings
D
Kang Mi Jin
2013-9-17

According to Yonhap:

The only sign of activity at the North Korean trade promotion agency here in Beijing is the faintly lit banner in front, and it is hard to tell whether the office is open for business.

No one is seen at the reception desk of North Korea’s Investment and Development Group building, located in a northern Beijing suburb, and its front door, though appears to be open, remains stationary for most of a weekday.

“North Koreans are still working there,” said a Chinese cleaner near the building, who only gave his surname Wu.

The Beijing branch of North Korea’s Investment and Development Group was believed to have launched operations early last year, but it appears certain to be a dead duck as the North’s unpredictability continues to keep Chinese investors away.

Its website has not posted any statement since Jan. 23 this year, and there was no response to a phone call made on Aug. 16.

A South Korean diplomatic source in Beijing, who spoke on the condition of anonymity, said the North Korean branch has been dormant since the North’s defiant launch of a long-range rocket last December.

Tensions on the Korean Peninsula soared early this year, with North Korea conducting its third nuclear test and its near-daily war threats during an annual joint military drill between South Korea and the United States.

“We have figured out that operations at the Beijing office of the North’s Investment and Development Group almost ground to a halt,” the source said.

…

China, North Korea’s biggest trading partner and aid donor, has become increasingly frustrated with its wayward ally, particularly after the North’s February nuclear test. In May, the Bank of China closed accounts with North Korea’s Foreign Trade Bank, which was accused by the U.S. of helping to finance the North’s nuclear weapons program.

According to the South Korean Embassy in Beijing, North Korea’s trade volume with China fell 6 percent on-year in the first six months of this year.

The North’s trade with China stood at US$2.95 billion in the January-June period, compared with $3.14 billion a year earlier, embassy officials said.

Exports to China rose 6 percent to $1.36 billion, while imports declined 14 percent to $1.59 billion, they said, citing official data.

Read the full story here:
N. Korea appears to struggle to woo Chinese investors
Yonhap
2013-8-23

UPDATE 1 (2013-8-27): Chinese auto manufacturer announces plans for Rason plant. According to Yonhap:

A major Chinese automaker has expressed its intention to invest in a project to build a car manufacturing factory in North Korea, the North’s media said Tuesday.

FAW Group Corp., a Chinese state-owned automotive manufacturing firm, signed a letter of intent last week with North Korea’s Rason regional government to invest in the construction of the factory, the North’s Korean Central News Agency (KCNA) reported.

The agreement is a preliminary step to conclude an official deal for the investment.

The deal was made during the third round of the exhibition for international goods held in the North Korean city last week, according to the KCNA.

The impoverished communist country designated Rason, located on its northeastern tip, as a special economic zone and has been actively seeking an overseas investment in the region.

During the exhibition, China’s Heilongjiang regional committee on trade promotion and Rason’s economic committee signed an agreement to boost cooperation. Heilongjiang province is located in the northeastern part of China.

Stressing Chinese firms’ investment in the Rason region, an unidentified official from the Chinese body vowed “to transport goods from its region to Shanghai via Rason ports,” according to the report.

ORIGINAL POST (2013-8-21): According to KCNA:

3rd Rason Int’l Trade Exhibition under Way

Pyongyang, August 21 (KCNA) — The 3rd Rason International Trade Exhibition is going on in the Democratic People’s Republic of Korea.

The exhibition in the Rason Economic and Trade Zone bordering China and Russia is attended by more than 120 entities from countries and regions, including the DPRK, China, Russia, Germany, the U.S., and Japan.

On display at the exhibition are some 78 000 items of exhibits in 410 kinds, covering machinery, steel, electrical, electronic and chemical products, foodstuffs, medicines, building materials, vehicles and sundries.

In this regard, KCNA met Hwang Chol Nam, vice-chairman of the Rason City People’s Committee.

Hwang said:

The Rason City has laid definite institutional guarantee and legal foundations for jointly developing the economic and trade zone and has made a big stride in building infrastructure, paving a way for foreign businesses to smoothly carry on production and trade in the zone.

During the days of the exhibition, foreign businessmen will witness the situation of the developing zone.

Ho Myong Ho, director of the Rason Exhibition Corporation, told KCNA that the current exhibition is the biggest in scale and he believes that it will serve as an occasion for making the trade in the zone gain momentum.

The exhibition will run until August 23.

The Rason Economic and Trade Zone is a special economic zone in the DPRK, where preferential treatment is available.

The zone has developed into a hub for transit transport, trade and investment and financial and tourism service.

2013-8-20 evening news coverage of the opening ceremony can be seen here.

Dr. Bernhard Seliger posted the application form for the trade fair:

Previous posts on the Rason International Trade Fair can be found here.

According to Yonhap:

North Korea’s trade with China fell 6 percent on-year in the first six months of this year, apparently hit by Beijing’s tougher stance against Pyongyang’s nuclear program, a senior Seoul diplomat said Monday.

The North’s trade with China stood at US$2.95 billion in the January-June period, compared with $3.14 billion a year earlier, said the diplomat at the South Korean Embassy in Beijing.

Exports to China rose 6 percent to $1.36 billion, while imports declined 14 percent to $1.59 billion, the diplomat said on the condition of anonymity, citing official data.

“The drop in overall North Korea-China trade in the first six months of this year appears to be affected by tighter inspections by Chinese customs authorities,” the diplomat said.

North Korea’s imports of Chinese crude oil slipped 15 percent from a year ago to 250,000 tons during the six-month period, according to the data.

In particular, the North’s imports of food from China plunged 65 percent to 120,000 tons for the January-June period, the data showed.

Coal shipments from North Korea to China rose 18 percent to 8.33 million tons for the six-month period, despite falling coal prices, according to the data. Coal accounted for 54.8 percent of the North’s total exports to China during the period.

“With the Chinese economy expected to slow down in the second half of this year, China’s demand for North Korean coal is likely to decline,” the diplomat said.

China has become increasingly frustrated with North Korea, particularly after the North’s third nuclear test in February. Beijing voted in favor of sanctions by the U.N. Security Council to punish Pyongyang for conducting the nuclear test.

In May, the Bank of China closed accounts with North Korea’s Foreign Trade Bank, which was accused by the U.S. of helping finance the North’s nuclear weapons program.

Read the full story here:
N. Korea’s trade with China drops 6 pct in H1: diplomat
Yonahp
2013-8-12

According to Kyodo:

China’s exports to North Korea in the first half of 2013 fell for the first time in four years, customs data showed Monday, a sign that Beijing might have increased pressure on Pyongyang over its continued nuclear weapons program.

During the January-June period, China’s exports to North Korea shrank 13.6 percent from a year earlier to $1.59 billion, mainly due to a drop in crude oil shipments, according to the data released by the General Administration of Customs.

China’s exports of crude oil to North Korea in terms of volume and value declined 14.2 percent to 250,000 tons and 20.2 percent to $270 million, while North Korea’s overall exports to its main economic and diplomatic benefactor rose 5.3 percent to $1.37 billion, the data said.

The last time that China’s exports to North Korea fell in the first six months, as well as for the full year, was in 2009, when global trade slumped in the wake of the surprise collapse of U.S. investment bank Lehman Brothers Holdings Inc.

China has been urged by many countries to exercise more influence on North Korea, particularly after Pyongyang went ahead with its third nuclear test in February in violation of U.N. Security Council resolutions.

See also Voice of America here.

Read the full story here:
China’s exports to N. Korea fall for 1st time in 4 years
Kyodo
2013-7-29

UPDATE 1 (2013-7-29): DPRK imports of Chinese grain drop 8.4% in the first half of 2013. According to Yonhap:

North Korea’s imports of Chinese grain fell 8.4 percent on-year in the first half of 2013 mainly due to a better harvest last fall, a report said Monday.

The report by the Korea Rural Economic Institute (KREI) showed Pyongyang’s imports of flour, rice, corn and other grain products reaching 124,228 tons in the January-June period, compared with 135,648 tons a year earlier.

The state-run institute said that while the country imported more than 20,000 tons of grain on average from February onward, last year’s better harvest and overall improvements in food supply conditions led to the first-half decline.

“Overall, import numbers indicate supply and demand of grain is very stable in North Korea,” said Kwon Tae-jin, a research fellow at KREI who compiled the report.

He said besides grain, the communist country imported 139,161 tons of chemical fertilizers from China in the first half, a drop of 35 percent from 213,871 tons purchased in the same six-month period last year.

ORIGINAL POST (2013-7-29): DPRK imports of Chinese grain fall 14.2% in 2013. According to Yonhap (via Global Post):

Imports of Chinese grain by North Korea fell 14.2 percent on-year in the first five months of 2013 mainly due to a better harvest last fall, a report said Wednesday.

The findings by the Korea Rural Economic Institute (KREI) showed Pyongyang’s imports of flour, rice, corn and other grain products reaching 101,170 tons in the January-May period, down from 117,922 tons the year before.

The institute said numbers fell sharply in May when total grain imports stood at just 21,142 tons, which represents an 18 percent drop from the previous year and an 18.2 percent decrease from April. The communist country brought in 25,850 tons of grain from its neighbor in the preceding month and 25,788 tons in May of 2012.

Kwon Tae-jin, a research fellow at KREI who compiled the report, said the sizable drop in imports was probably caused by better grain output last year, which made it unnecessary for the country to buy the commodity from China.

“It can be a sign that things have improved,” he said. The researcher also speculated that the harvest of such produce as barley, wheat and potatoes, which grow in spring, may have been better than in the past.

The experts, who checked raw data provided by the Korea International Trade Association, said the North imported 42.7 percent more chemical fertilizers in the January-May period of this year vis-a-vis the same time period in 2012.

The country brought in 129,967 tons of fertilizer from China, compared to 91,096 tons the year before. Such an increase may exert a positive effect on farm output.

Kwon said that the spike in fertilizers is a sure sign that the North is giving top priority to pushing up agricultural output.

Related to the latest data, a government source hinted that North Korea’s emphasis on agriculture may be aimed at trying to strengthen the leadership of its new leader Kim Jong-un, who took power after the sudden death of his father Kim Jong-il in late 2011.

“Unlike other economic sectors that require time, agriculture is something that can generate results in a short period of time and have immediate impact on everyday lives,” the official who declined to be identified said.

Read the full story here:
N. Korea’s imports of Chinese grain fall 14.2 pct in 2013
Yonhap (via Global Post)
2013-7-3

According to Bloomberg:

China banned its fishing fleet from working in waters off North Korea’s east coast after the totalitarian regime demanded Chinese vessels buy fuel from North Korean suppliers.

The North decreed late last month that Chinese ships, which previously made their own fueling arrangements, had to abide by the rule, China’s Agriculture Ministry said in a June 28 announcement that was posted to its website today.

“Fishing boat owners and and businesses believe that the North Korean decision will have a serious effect on production and operations and job security, causing huge potential risks,” the ministry said.

The statement reflected Chinese concerns after North Korea seized a Chinese fishing boat and its crew on May 5 and demanded a 600,000 yuan ($97,800) ransom. The ship and crew were freed later in May after Chinese diplomats negotiated their release, the official Xinhua News Agency reported.

Here is coverage in The Guardian.

Read the full story here:
China Bans Its Fishing Fleet From Waters Off Eastern North Korea
Bloomberg
2013-7-8