North Korea’s crop imports from China plunged 62 percent in October from a year earlier, data showed on Saturday, spawning speculation Pyongyang’s crop yield was not hit as hard by floods this year as was predicted.
According to the data compiled by the Korea Rural Economic Institute (KREI), North Korea imported 22,331 tons of crops such as flour, rice, corn and bean in October from its neighboring country, compared with 59,369 tons a year earlier.
The October figure was also down 38 percent from the previous month, according to the data.
In the first 10 months of the year, the North imported a total of 239,325 tons of crops from its strongest ally, also down 23 percent from the 310,106 tons a year earlier, the data showed.
The data followed projections North Korea’s crop yield would plunge this year, due mainly to unfavorable weather conditions that swept the country in late-summer, exacerbating the chronic food shortage in the poverty-stricken nation.
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North Korea imported a total of 376,431 tons of crops from China last year, following 313,694 tons in 2010 and 203,390 tons in 2009, according to the data.
Read the full story here:
NK’s crop import from China dip 62% in October
Yonhap (via Korea Times)
2012-12-1
This fall Marcus Noland has posted three blog entries which feature DPRK trade statistics with China, the European Union, and Russia. I have put the graphs from these posts here as both an archive and as a quick reference for myself. See Dr. Noland’s original posts (linked above) for his analysis.
Chinese Luxury Goods Exports to the DPRK (Published 2012-9-17):
European luxury exports to North Korea (Published 2012-10-18):
Russian luxury good exports to North Korea (Published 2012-11-14):
North Korea is developing its tourism industry as a way to increase its foreign currency earnings. Recently, there appear an increasing number of tour packages targeted attracting Chinese visitors to the DPRK, with new tour packages actively being promoted.
The Korean Central News Agency (KCNA) reported on October 8 that there are new professional tour programs that are gaining international attention. In the article, new and creative tours were featured, including Mount Paektu tours with [Air] Koryo Airlines and bicycle tours. Mini-golf tours are also reportedly scheduled for next year.
Along with North Korea, Chinese tour companies are also taking interest in this effort and are developing various tour packages via air, land, and sea routes. In June, charted plane tours from Shenyang started, and now new tours from Dalian to Mount Kumgang are also being launched.
Across the border from the North Korean city of Sinuiju is the Chinese city of Dandong, where there are over ten travel agencies that operate daily train tours between the two cities. In fact, during holidays and weekends, more and more Chinese tourists are flocking to the China-North Korean Friendship Bridge that traverses the Yalu River, connecting the two cities.
The recent rise of Chinese tourists to North Korea is attributed to the aggressive marketing schemes of the North Korean government. The State Tourism Bureau teamed up with a Chinese travel company to run a tour to Mt. Paektu. North Korea, faced with international economic sanctions, has limited means to earn foreign currency. The new Kim Jong Un regime is actively seeking ways to earn foreign capital through the tourism industry. Chinese companies are responding positively and swiftly to this change and are coming up with new tourism programs.
North Korea is utilizing its image as ‘closed country’ and ‘hermit kingdom’ to stimulate curiosity among tourists. More and more Chinese are able to enter North Korea without a visa (requiring only their passports) and this is adding to the spike in Chinese tourists to the country. Most Chinese travel agencies are able to make all the necessary travel arrangements to North Korea in less than a week once the interested person submits his/her passport and photos.
However, there are comments from returning visitors that tours are limited to historic and famous sites and somewhat insular as contact with the locals is prohibited. North Korean national security agents accompany all tour groups. Despite this fact, many experts expect the number of Chinese visitors to the DPRK will continue to increase in the future.
Pictured Above (Google Earth): Two Google Earth satellite images of Hoeryong (L: 2002-4-27, R: 2008-12-25) which show the construction of residential apartments buildings as well as the town’s new main market.
Hoeryong is a town in North Hamgyong Province that lies across the Tumen (Tuman) River from China. According to North Korean political narratives it is also the childhood home of Kim Jong-il’s mother, Kim Jong-suk. It has been the the site of a large construction boom in the last five years, and now, according to the Daily NK, Chinese tourists are being brought in on very limited itineraries. According to the article:
The Hoiryeong source explained, “North Hamkyung Province ‘shock troops’ and military unit construction teams have been here for three years on Kim Jong Il’s orders for the construction, and now it is finished.” Local households were asked to contribute 12,000 North Korean Won each to the construction effort, he added.
Hoiryeong used to have few buildings with five floors, but now it has a considerable number of new four and five floor apartment buildings built around the center of the city, as well as a number of newly built commercial facilities. Buildings in the downtown core have also been spruced up with external lighting, a project that began last April.
There are a number of new restaurants in the area. One, ‘Hoiryeonggwan’, has been decorated in the style of Pyongyang’s famous ‘Okryugwan’, something that Kim Jong Il is said to have ordered in December 2010 when he visited the construction site. Elsewhere, restaurants serving spicy marinated beef, duck, dog and Chinese food have also opened their doors.
However, these restaurants only currently open on the weekend or when Chinese tour groups make an advanced reservation, according to the source, who revealed that local people regard the construction effort more as an attempt to generate tourist revenue than to make it a real ‘model city’, as the official propaganda claims.
“Chinese tourists come, then they visit the statue of Kim Jong Suk and the place where she grew up, and then they are taken to one or other of the restaurants,” the source said. “They drink and make merry then go, all without visiting any scenic spots; thus, the authorities make money.”
As with other tourist operations, it is possible that this small step will lead to a softening of restrictive tourism regulations and potentially the arrival of Western tourists. But don’t hold your breath! Chinese tourists have been visiting Sinuiju on a regular basis, but westerners are generally still prohibited from touring the city
Despite the global economic slowdown, more than 6,000 business representatives from 20 countries signed agreements on more than 200 cooperative projects. Some 72 of the largest projects have a total combined value of $1.26 billion.
…
During the 11th Five-Year Plan period (2006-2010), total trade value between Dandong and DPRK amounted to $3 billion. Imports and exports between Dandong and the DPRK reached $1.86 billion in 2011.
So far, trade between Dandong and DPRK accounts for 40 percent of total China-DPRK trade, and the volume of the cross-border cargo trade via Dandong port makes up 80 percent of the total Sino-DPRK trade volume.
UPDATE 4 (2012-10-16):Xinhua reports on the closing of the expo:
The five-day 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, held in the border city of Dandong, concluded on Tuesday with 72 agreements of cooperation intent signed. They have a combined value of 1.26 billion US dollars.
Pan Shuang, vice mayor of Dandong, said more than 6,000 Chinese and overseas people from over 20 countries and regions exhibited at and attended the expo. There were talks on 200 projects.
He said the projects related to industries ranging from aquaculture, clothes manufacturing, chemical production, wind power generation equipment, iron steel production to hotel construction.
AT THE EXPO
At the exhibition, the DPRK delegation exhibited ginseng products, food specialties, hand-made Hanbok, a traditional Korean costume, as well as mining and machinery equipment.
Ri Yong Chol, sales manager of Korea Roksan General Trading Corp., which is a ginseng supplier, said “I came to look for Chinese friends and potential business partners. Our company is also seeking opportunities to set up a subsidiary in China to get better access to the Chinese market.”
A Korean girl wearing brightly-colored Hanbok and traditional ornaments was selling costumes. “Our factory can make 20 such hand-made Hanboks a day. The clothes are for important occasions with exquisite workmanship and high-quality material,” she said.
Liu Songyu, chairman of a Korean garment firm from Yanbian Korean Autonomous Prefecture of Jilin Province, was interested in the business.
“Chinese labor costs have been rising fast. In Yanbian, a garment-factory worker’s salary has risen to 2,000 yuan (319 US dollars) a month. While, if the company had a factory in DPRK, it would save a considerable amount on labor costs. I would give a serious thought to that,” he said.
Yanbian is a heavily Korean ethnic populated region in China, where people also wear Hanbok during important occasions.
Elsewhere, Huang Zijun, an authorized dealer of Total Petrochemcial, was overwhelmed to obtain 20 orders from the DPRK delegation during the expo.
“I felt their enthusiasm in promoting business at the expo. I believe the DPRK is a big market for petrochemical products like lubricating oil,” he said.
An economic, trade, culture and tourism expo jointly initiated by China and the Democratic People’s Republic of Korea (DPRK) opened Friday in the border city of Dandong in northeast China’s Liaoning Province.
A delegation of 500 members from the DPRK is attending the 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, which is scheduled to run from Friday to Tuesday, the event’s organizers said.
Over 400 Chinese companies from 12 industries are also attending the expo.
With the theme of “friendship, cooperation and development,” the expo consists of commodity exhibitions, trade fairs, DPRK art performances, craftwork exhibitions, a border trip to the Yalu River and an exhibition for the tourism resources of the two countries.
Supported by the China Council for the Promotion of International Trade, the event is being organized by the Liaoning Provincial Government.
China is DPRK’s biggest trade partner. Statistics show that bilateral trade volume went up 62.4 percent year on year to 5.64 billion U.S. dollars last year.
A source from Dandong described the unusually vibrant scene to Daily NK yesterday, saying, “The North Korean authorities have mobilized companies from Pyongyang and from here in China to sell goods and pitch for joint venture opportunities. There are loads of people; it’s standing room only.”
The source added that North Korean companies attending the event are pushing very hard to attract investment; notably, by distributing their own promotional literature expounding upon the given company’s superior virtues and providing exact contact details for follow-up inquiries. It is not hard to find meetings continuing in local North Korean eateries, as the North Korean side tries to woo potential sources of capital.
Chinese companies are keen to hear about the joint venture opportunities available, the source also said; and with most of the larger enterprises from China’s three northeastern provinces sending representatives to Dandong for the event, which runs until the 16th, most of the city’s hotels are apparently full to bursting.
However, due to past and present cases of lip service being paid to contractual obligations by North Korean companies whose only goal has been to attract funding rather than build business, Chinese representatives are still very cautious about actually signing on the dotted line.
One such representative from a Dandong-based company with a 10-year history of doing business with North Korea pointed out to Daily NK, “We have seen countless examples of companies making contracts and then there being little contact between the partners thereafter. Unbelievably, one manager I tried some minerals business with last year just changed the name of the company and came back again this year.”
UPDATE 1 (2012-6-7): The expo appears to have been pushed back to October 2012. According to KBS:
North Korea and China will jointly hold a fair on economy, trade, culture and tourism in the Chinese border city of Dandong for five days from October 12th.
A Dandong-based newspaper reports that this will be the first comprehensive fair covering several fields that the two countries hold. The paper said the fair will exhibit products, offer trade consultations, hold cultural and art performances and introduce both nations’ tourist attractions.
Roughly 400 Chinese companies exporting to North Korea will participate in the event. About 100 North Korean companies and cultural troupes will partake.
Dandong is China’s largest base for trade with North Korea, with 70 percent of its trade with North Korea running through the border city.
Read the full story here:
N.Korea, China to Hold Joint Industrial Fair in October KBS
2012-6-7
ORIGINAL POST (2011-12-3): Dandong to host Sino-DPRK economic and cultural expo. According to Xinhua:
The northeastern Chinese city of Dandong, which borders the Democratic People’s Republic of Korea (DPRK), will host a Sino-DPRK economic, trade and cultural exposition in June next year, a local Chinese official said Saturday.
A series of activities, including a commodity fair, investment and trade talks, tourism exhibition and arts exhibition, will be staged during the exposition, said a spokesman with the Publicity Department of the Dandong Municipal Committee of the Communist Party of China.
The Phibada Opera Troupe of the DPRK, an artists group well known to Chinese people, will give performances during the event, he said.
Adam Cathcart took the time to send me this interesting link to the official Dandong web page. It contains some videos (in Chinese) in which local officials promote the changes they expect to come to this city as it transitions into a regional trade hub.
Below I have added some links to recent blog posts that a re related to Dandong:
North Korea-China Economic, Trade, Cultural, and Trade Expo is scheduled to be held from October 12 to 16, 2012 at Dandong City, Liaoning Province. The expo will be jointly hosted by the China Council for the Promotion of International Trade, Liaoning Provincial Committee, Liaoning People’s Friendship Association, and Dandong Municipal People’s Government.
China accounts for 90 percent of North Korea’s foreign trade. Approximately 70 percent of this trade comes through Dandong. Currently, Dandong is gaining both domestic and international attention as the construction of the New Yalu River Bridge is nearing completion and progress on the Hwanggumpyong and Wihwa Islands Special Economic Zone is advancing.
North Korea-China Economic, Trade, Cultural, and Trade Expo will provide a place for not only product exhibits but will provide consultation for economic and trade cooperation, cultural exchanges and tourism. From the North Korean side, the largest trade investment company and government agency in charge of overseas labor export will be in attendance.
Over 500 booths and sections are ready for the expo and over 5,000 participants from foreign buyers are expected to attend. Over 100 companies and a 300-member economic-and-trade delegation will be coming from North Korea.
This event was an exclusive, invitation-only event, inviting major Chinese companies with investment interest in North Korea. There were over 100 officials from 30 different state-run corporations from North Korea present at the session to provide detailed information about 50 investment projects. The participants were required to pay an entrance fee and news media were prohibited from the event.
China’s Overseas Investment Federation (COIF) and North Korea Investment Office (NKIO) signed an agreementon September 22 to jointly launch the “Special Fund for Investment in North Korea.” NKIO is an overseas investment body subordinate to the Joint Venture and Investment Committee of North Korea (JVIC).
According to a Chinese media source, both states have set 3 billion RMB (476 million USD) as the goal for the fund; but in the initial stage, 1 billion RMB (159 million USD) will be utilized first to develop urgently needed urban infrastructure facilities focusing on mining, real estate, and port industries.
UPDATE 43 (2015-6-17): Gazprom official claims pipeline not feasible. According to NK News:
The deputy CEO of Russia’s Gazprom told reporters that connecting South Korea to Russian gas supplies is economically attractive but politically infeasible on Tuesday.
The long-gestating pipeline project would extend through the DPRK and provide natural gas to energy-hungry South Korea.
But Alexander Medvedev, speaking from a press conference in Moscow yesterday, said the project was too difficult in the current climate.
“The level of communications, the level of cooperation is not that which would make it possible to speak of advancing to the feasibility study stage, let alone implementing a project to supply gas via North Korea.”
Despite the political hurdles, the project is still interesting from an economic standpoint.
“From the economic standpoint, this would probably be the most efficient option for supplying gas to Korea … There is demand for pipeline gas,” Medvedev added.
…
Despite the numerous roadblocks, the deputy CEO of the world’s largest gas producer remained hopeful that political changes could move the project forward.
“The opportunity remains all the same, but it depends on a resolution of the political issues between the DPRK and the Republic of Korea. There are certain positive signals, but there are negative signals too,” Medvedev said at the press conference.
Post 42 (2014-6-18): According to Leonid Petrov, “Russian GAZPROM postpones Trans-Korean gas pipeline construction project ‘due to unstable political situation in South Korea'”. Here is the source (in Russian).
Post 41 (2014-3-29): According to Yonhap, the Russians and the North Koreans held talks on a number of issues including the Kaesong Industrial Complex, Iron Silk Road, and the gas pipeline. No information on the pipeline was made public.
Post 40 (2013-11-13): The Russians and South Koreans most recently discussed the Russia – South Korea gas pipeline at a presidential meeting in Seoul. No decisions were made. Read more here.
Post 39 (2012-10-4): The Choson Ilbo reports that the pipeline talks are delayed because DPRK is asking for transit rates above the international norm:
A South Korean government source said talks have dragged on because the North is demanding a transit fee that is two to three times more than international rates.
Based on a method of calculation used by Ukraine — about $2 per 1,000 cubic meters of natural gas for 1 km of pipeline — a reasonable fee would be about US$150 million a year given the estimated amount of gas South Korea would import from Russia and the 700-800 km of the gas pipeline running through the North. But the North reportedly demanded $300-500 million a year.
“It’s likely that the North asked for such a high price in the first place to gain the upper hand in future talks,” the source added. “There have been no full-fledged talks yet. At the moment, Pyongyang, Seoul and Moscow are just trying to read each other’s minds.”
Post 38 (2012-2-27): The Daily NK reports on details being discussed in the pipeline talks:
The Republic of Korea Ambassador to Russia, former chief nuclear negotiator Wi Sung Lac, says there has been progress on a gas pipeline connecting Russia, North Korea and South Korea.
“At the moment it is at the stage of enterprises discussing commercial conditions, and I am aware that there has been progress. North Korea and Russia are also discussing issues of transit and transit fees via working-level consultations,” he explained to reporters on a visit to Seoul today.
Wi would not be drawn on what kind of progress has been achieved, saying, “It’s about commercial details and so is hard to explain, but it appears there has been progress on supply quantities and supply conditions.”
Post 37 (2012-2-20): Gazprom reports “progress” in talks with North Korean government. According to Bloomberg:
OAO Gazprom, Russia’s natural gas exporter, said it made progress in talks to supply Korea Gas Corp. (036460) through a pipeline across North Korea, the Moscow-based company said today in an e-mailed statement.
Gazprom and Kogas, as the Korean company is called, plan to meet again in Moscow next month to continue talks, Gazprom said.
The official news website of the Yanbian Korean Autonomous Prefecture in Jilin Province reported on Thursday that the Yanbian Haihua Group inked a deal in Pyongyang on September 1 and established with its counterpart a $7.83 million joint venture company.
Under the deal, Haihua Group holds a 60.46 percent stake while the North Korean side owns the rest, to operate the Chongjin port’s No.3 and 4 wharves for 30 years.
The ports will be capable of processing 7 million tons of cargo a year and be put into use this year.
…
The prefecture’s public relations department and the Yanbian Haihua Group did not comment on the joint venture when contacted by the Global Times yesterday.
Although the Global Times reports a $7.83m price tag, the actual size of the deal appears much larger. According to the Donga Ilbo:
The North Korean regime has received 6.12 million euros ($7.82 million) of rental charges for the 3,180 square-meter (34,229 square-feet) piers and a 4,000 square-meter cargo yard from the Chinese company and paid the money to fund the newly-built joint venture, the newspaper said.
The Chinese company will invest a total of 13 billion won (USD $12m) on developing the port, such as building new equipment and facilities, which accounts for about 60 percent of the entire capital spent on the project.
According to the daily, they have already set up a series of detailed regulations on employment management, profit distribution and the formation of a new board with a goal to raise cargo traffic to one million tons by 2015.
The Yanbian group already spent 60 million yuan ($9.47 million) on manufacturing cranes and building necessary equipment, the newspaper said, and also completed work on stabilizing the 36,000-square meter grounds of the construction site.
They are scheduled to finish manufacturing cranes within the year to begin a full-fledged plan for domestic and international transportation through the port.
Yonhap and the Daily NK reported back in 2010 that this very same Chinese firm had leased the Chongjin Port for exports to South Korea and other parts of China:
The report, citing an anonymous government official from Tumen in China’s far northeast, across the Tumen River from Namyang in North Hamkyung Province, said that the usage rights have been sold to a “Chinese state company, Yanbian Haihua Import-Export Trade Company.”
He predicted, “Yanbian Haihua Import-Export Trade Company will start shipping between Chongjin port and Busan by container ship in September, and will start shipments to southern regions of China soon.”
The anonymous official also revealed that North Korea has agreed to allow the Chinese company to use the railroad between Tumen and Chongjin as part of the deal. The deal, the official said, will “facilitate trade from Tumen,” and added that the Chinese company which inked it is planning to use it to fulfill shipping contracts with three other Chinese companies.
The Chinese company is reportedly investing 10 million Yuan ($1.48 million approx.) in shipping cranes and other construction at Chongjin, and is having 150 freight cars produced to add to 50 already sent.
It would be interesting to know if the fiasco surrounding the Xiyang contract let to a renegotiation of terms of this deal in any way: Either by altering the ownership shares, time horizon, or if greater assurances against ex post expropriation were added. Since the contract is not ever likely to be made public, we may never know.
UPDATE 1 (2012-9-18):The Hankyoreh reports that quite a few ports on the DPRK’s eastern shore are being renovated by the Chinese. According to the article:
North Korea and China will develop 4 or 5 ports in the eastern coastal area of North Korea.
A source in Beijing said on Sept. 17 that it was confirmed through a Chinese government official that “4 to 5 ports in the eastern coastal area of North Korea in locations such as Seon-bong, Rajin, Cheong-jin, Gim-chaek, Dan-cheon, Heung-nam and Won-san are being jointly developed by North Korean and Chinese companies.” The source added that in addition to the two ports that are being developed in Rajin and Chongjin currently, businesses in the two countries are discussing specific conditions for development in the other areas. This is the first time that this information has been confirmed by a Chinese government official.
KCNA reports that a groundbreaking ceremony for a new management board building at the Hwanggumphyong Economic Zone (HGP EZ) took place on 2012-9-15:
Ground-breaking Ceremony for Hwanggumphyong EZ Management Board Building Held
Pyongyang, September 15 (KCNA) — A ground-breaking ceremony for a building of the management board for the Hwanggumphyong Economic Zone to be jointly developed and run by the Democratic People’s Republic of Korea and China, took place on Hwanggumphyong Islet on Saturday.
Present there were Hong Kil Nam, vice-chairman of the North Phyongan Provincial People’s Committee, and officials concerned in the province and Sinuiju City from the DPRK side and Bing Zhigang, vice-governor of the Liaoning Provincial People’s Government of China and officials concerned in the province and Dandong City from the Chinese side.
Speeches were made at the ceremony.
The speakers noted that after leader Kim Jong Il and President Hu Jintao reached an agreement on jointly developing and managing the two economic zones, a series of issues have been settled for the development of the Hwanggumphyong Economic Zone, with a substantial progress made.
They stressed that the joint development and operation of the zone would be conducive to furthering the DPRK-China friendly relations sealed in blood and attaining co-prosperity.
North Korea hopes that the groundbreaking ceremony will mark the beginning of serious SEZ development at Hwanggeumpyong, which remained a sleepy agricultural backwater even after last June’s launching ceremony, a fact that led to rampant speculation about problems related to the legal framework for the development of the area.
However, development began to accelerate once again after Jang Sung Taek, the director of the Chosun Workers’ Party Department of Administration, concluded the establishment of the management committee during his visit to China last month.
Rhetoric emerging from the Chinese side is also more positive than it has been for some time. In a recent media interview, the deputy mayor of Dandong, which borders Shinuiju, commented, “Now that the Hwanggeumpyong Management Committee has been established, construction has begun on basic infrastructure including roads. From the 15th, the business of developing Hwanggeumpyong will formally begin.”
“Both governments have decided to develop Hwanggeumpyong first then go on to discuss the development of Wihwa Island,” he added. “When the construction of the New Yalu River Bridge and bridges to Hwanggeumpyong and Wihwado are complete, China-North Korea trade, culture, travel and other exchanges will become more active and the two countries will grow closer.”
UPDATE 2 (2013-1-17): The latest issue of Digital Globe’s World View magazine contains information on the Musan Mine (page 7):
[…]In a New Year’s message, North Korea’s leader, Kim Jong-un, urged North Korea to become an economic powerhouse by improving productivity. He specifically mentioned the Musan Mine, as it is one of the largest iron ore mines in the region with a reserve of approximately three billion tonnes of ore. This announcement comes after a Chinese investment firm, Tianchi Industry and Trade, pulled out of the mine in the early fall of 2012. North Korea demanded a price increase of 20%, on top of the 50-year lease that had been in place since 2005. With the price increase, Tianchi did not feel the location could remain profitable, and North Korea refused to renegotiate. As a result, the associated smelter in China was shut down in September 2012. The presents a loss for the Jilin provincial government in China, which had extended a rail line 42 kilometers to the border to transport ore north after it was processed at the smelter. With the departure of the Chinese investment firm, the Musan Iron Ore Mine is currently operated by North Korea’s Ministry of Mines. The mine has the potential to produce 1.5 million tonnes of ore a year if the North Koreans can operate it at its former capacity under Tainchi.
UPDATE 1 (2012-10-17): The Choson Ilbo has picked up on this story first reported in the Hankyoreh last month, yet they have a different English name for the Chinese company. According to the article:
The Chinese apparently baulked at a price increase of more than 20 percent demanded by the North, although international iron ore prices are plummeting in the wake of the global recession. They won 50-year extraction rights for the mine in 2005.
A smelter in the Chinese province of Jilin near the border with North Korea and operated by Tianchi Industry and Trade, the Chinese partner to the Musan Mine, closed down in September, according to a source in Yanbian on Tuesday. The smelter used to process iron ore extracted at the mine.
The source added, “There’s been no progress in the implementation of plans to lay a railway line and a slurry pipeline between Nanping and Musan.”
Tianchi Industry and Trade turned down the North’s demand, saying it makes hardly any profit as is given wages for North Korean workers and transportation costs.
Tianchi, a private trading company based in Yanbian, has served as a conduit for iron ore produced at the Musan Mine to the Chinese market since the early 1990s. It obtained the extraction rights to the mine in 2005 after concluding a trilateral joint-venture contract with Tonghua Iron and Steel, a Chinese state-run iron and steel mill, and [North] Korea Ferrous Metals Export and Import Corporation.
Tianchi hired North Korean workers and extracted 1 to 1.5 million tons of iron ore at Musan every year, which it supplied to Tonghua and other companies.
But the first cracks in the deal appeared in 2009, and iron ore production had been intermittent since then and stopped completely this year.
The Jilin provincial government has also been hit because it already laid a 41.68 km railway line leading to the border town of Nanping since November last year.
ORIGINAL POST (2012-9-13): We have already heard about Xiyang. Today the Hankyoreh tells us about problems with the Musan Mine…
Pictured Above (Google Earth): Musan Mine
According to the article:
However, not all business between North Korea and China is rosy. An iron-smelting factory in Helong City, Jilin, that was visited on Sept. 5, had to close its doors. It used to be a place where iron from across the Yalu River was brought from North Korea‘s Musan iron mine and processed. A railroad was expected to run from the two cities by October of last year in order to increase the amount of iron brought into China. But the construction was never completed. A Chinese company called the Yanbian Cheon-ji Industry Trading Company had rights to the Musan mine for fifty years starting in 2005.
There are many guesses as to why this happened: “North Korea was asking for a price increase of 20% while the price of iron has declined in the rest of the world;” “There was trouble between the Chinese government and the new Kim Jong-un regime on negotiating development rights;” “There was a downfall of development due to differences with foreign investors about investing in electrical power.” No one knows clearly what the reason was, and there are still busy trying to figure out what is the real situation.
Here is the original story:
China adjusts to influx of cheap North Korean labor Hankyoreh
Song Kyung-hwa
2012-9-13
