North Korean Economy Watch

Here are some articles about it:

North Korea’s Kim Jong Il arrives in China, amid internal, external tensions
Washington Post
Lauren Keane
5/4/2010

Kim Jong-il Arrives in China
New York Times
Choe Sang-hun
5/3/2010

North Korean leader in China seeking cash, clout
Los Angeles Times
Barbara Demick and John M. Glionna
5/3/2010

North Korea’s Kim seeks lifeline in China
Reuters
Royston Chan
5/3/2010

Kim Jong-il Stops Off in Chinese Boomtown
Choson Ilbo
5/5/2010

Who Is with Kim Jong-il on His China Trip?
Choson Ilbo
5/4/2010

North Korea’s Kim ‘visits China’
BBC
5/3/2010

Here are some photos of his train.

According to the Daily NK:

The chairman of North Korea’s State Development Bank, Jeon Il Chun visited China on April 8, reportedly to try and bring Chinese investment to Daebong Mine, located near Hyesan, Yangkang Province.

Daebong Mine is one of North Korea’s major gold mines, managed under the auspices of the No. 39 Department of the Central Committee, a special department charged with raising funds for Kim Jong Il’s personal use. Jeon Il Chun is the person in charge of the No. 39 Department.

Attempts to sell shares in a gold mine directly controlled by the 39 Department, Kim Jong Il’s own private safe, to China seem to indirectly imply that Kim is suffering from a debilitating foreign currency supply crisis.

One Daily NK source in China who is well-acquainted with North Korean affairs reported that while Jeon was in China, he met with the management of three or four Chinese enterprises which already have investments in North Korea, and suggested investment conditions under which the North could transfer some of its mineral rights to them and receive capital investments in return.

The source said, “For now, as far as I know, executive managers of the No. 39 Department have been in contact with Chinese enterprises. Since the Workers’ Party is trying to sell shares in a gold mine, it seems the funding of the Party might be serious.”

“It is not clear whether or not this attempt was done on Kim Jong Il’s instructions, but attracting foreign investment in a gold mine is not a commonplace affair,” the source pointed out, adding that an investor has not yet been put in place.

What is the Daebong Mine for?

The Daebong Mine is a relatively large gold mine on the border of Woonheung and Gapsan in Yangkang Province. Until 2001, a Yangkang provincial foreign currency earning enterprise and the foreign currency earning department of the People’s Safety Agency jointly managed it. However, in May, 2002, it became a No. 39 Department affiliated enterprise.

The No. 39 Department has been raising private funds for the leader and Party operations under the Finance and Accounting Department of the Central Committee since the mid-1970s. According to defectors, it has the highest authority and the largest funds of all North Korea’s foreign currency earning enterprises. Especially, it has the ability to mobilize tremendous financial resources since it manages and controls supplies of gold and silver and rare non-ferrous metals.

A source from Yangkang Province explained, “According to Chongjin University of Mining and Metals and Kim Chaek University of Technology, the purity of the gold from the Daebong Mine is more than 76 percent, while production from Hoichang and Eunsan in South Pyongang Province is 63 percent and 61 percent respectively. More than 150kg of solid gold is produced annually, so this mine is known as the ‘loyalty mine’.”

“People say that the government earns four or five million dollars a year through this mine. Neither Yangkang Provincial Committee nor Hyesan Municipal Committee is involved with the business of the mine.”

The source added, “Since the No. 39 Department deals with the mine, only those discharged soldiers with good family backgrounds are dispatched there by the Central Committee. In October of last year, around 200 discharged soldiers with good family backgrounds came to the mine.”

Almost all the gold produced in the Daebong Mine is stored in Swiss and Austrian banks in gold bars.

A Chinese company had a contract with the DPRK’s Musan Mine which has been canceled for an unknown reason.

Click here to see what I believe is the mine’s location.

Read the full article here:
No. 39 Department Hawking Shares in Key Gold Mine
Daily NK
5/3/010
Lee Sung Jin

According to Yonhap:

A North Korean remake of the Chinese opera A Dream of Red Mansions will premiere in Beijing next month, a Chinese-language daily reported Thursday.

The Hong Kong-based Takungpao said the staging of the Chinese classic of the same title, also known as “Hong Lou Meng,” by North Korea’s national Phibada (Sea of Blood) Opera Troupe will be staged in the Chinese capital city from next Thursday through Sunday.

A Dream of Red Mansions is a masterpiece of Chinese vernacular literature, written between 1749 and 1759. It is one of China’s Four Great Classical Novels.

The North Korean version of the opera reportedly debuted in the North last year as part of celebrations marking 60 years of diplomatic relations between the two allies.

North Korean leader Kim Jong-il was reported to have been directly involved in updating the 1961 version created by his father and the regime’s founder, Kim Il-Sung. Former Chinese leader Deng Xiaoping and other Chinese leaders watched the original version of the North Korean performance, newspaper reports from that era show.

The North’s Korean Central News Agency (KCNA) reported last October the North Korean leader and Chinese Premier Wen Jiabao watched the Chinese opera remade by North Korean artists at the Pyongyang Grand Theater, during the latter’s visit to North Korea. China’s Ministry of Culture donated costumes for North Korean artists involved in A Dream of Red Mansions.

The Takungpao report said more than 200 North Korean performers will visit Beijing for the staging of the opera, the largest foreign theatrical company to visit China in recent years.

The newspaper said that the leading and supporting actors are well-known stars in North Korea, most of them educated at the Pyongyang Kim Won Gyun Conservatory (Satellite image here), a higher educational institution for music named after a North Korean composer.

Kim Il-hwang, who stars as the protagonist Jia Baoyu, is the grandson of Kim Jong-hwa, who also played the protagonist in the 1961 version, according to Takungpao.

Read the full story here:
N. Korean version of classic Chinese opera to premiere in Beijing
Yonhap
Kim Young-gyo
4/29/2010

According to the Press Trust of India:

A Chinese tourist train entered North Korea for the first time today, carrying more than 400 passengers including a group of Finnish students, Chinese state news agency Xinhua reported.

The train embarked on the four-day tour from the Chinese province of Liaoning under a new arrangement with North Korea expected to attract tens of thousands of tourists, the agency reported from the provincial capital Shenyang.

The first train is mostly carrying tourists from China but also includes foreigners living in China, notably the Finns, resident in Guangzhou.

The tour comes amid heightened tensions between reclusive North Korea and South Korea, as Seoul has appeared increasingly suspicious that the North was behind the sinking of one of its naval ships last month.

It also follows reports that North Korean leader Kim Jong-Il plans to visit China soon.

Read the full story here:
Chinese tourist train makes first North Korea tour
Press Trust of India
4/25/2010

Michael Rank

Over 30,000 Chinese tourists are expected to visit Pyongyang this year, well above normal levels of around 20,000, and numbers are likely to increase further in future, the head of the Pyongyang-based Korean International Travel Company said recently.

In a rare instance of a North Korean official divulging meaningful statistics, Jo Seong-gyu 조성규 赵成奎 was quoted on a Chinese website as saying that in addition to the average 20,000 Chinese tourists who visit under national agreements, a further 20,000 Chinese visitors a year cross into North Korea as border tourists. He said these had been typical levels since a bilateral tourism agreement was signed in 1988. Although Chinese tourists typically number around 20,000 annually, there had been up to 50,000 in some years, as well as years when levels had dipped sharply, he added.

Jo was speaking to Chinese journalists visiting Pyongyang to mark a newly implemented bilateral tourism agreement. He did not say how many border tourists were expected this year, but several new local agreements have been signed recently, so that number is also likely to increase.

Jo said KITC had hired almost 90 Chinese-speaking guides to cope with the expected flood of Chinese tourists. Apart from the usual tourist sights of Pyongyang, the Myohyang mountains and Gaeseong, there are also plans for Chinese tourists to visit the Chinese Korean war cemetery in Hoechang 회창군 county (satellite image here), about 100 km east of the capital, where 134 “martyrs” of the Chinese People’s Volunteers are buried, including Mao Anying 毛岸英, son of Chinese leader Mao Zedong. The 90,000 square metre cemetery is the largest of dozens of such cemeteries in North Korea. Click here for photos of Premier Wen Jiabao visiting the cemetery last October.

Jo said Mt. Chilbo 칠보산 七宝山 on the Sino-Korean border will also be opened to Chinese tourists.

He said the increase in Chinese tourists visiting North Korea was due to a vogue for “red tourism”  – nostalgic tours to revolutionary sites which have become fashionable in China in recent years. These tend to appeal mainly to the older generation who remember the Maoist era, including perhaps the Korean war, and Chinese reports suggest that visitors to North Korea are often in their fifties and sixties.

Jo warned Chinese tourists to behave themselves, saying they should “respect Korean laws and regulations and moral standards and proceed from a standpoint of cherishing Korean-Chinese friendship, mutual understanding and tolerance.”

According to the Choson Ilbo:

North Korea spent more than US$5.4 million on fireworks displays along the banks of the Taedong River in Pyongyang on Wednesday to celebrate former leader Kim Il-sung’s 98th birthday the following day.

A North Korean source on Friday said the North had imported about 60 tons of fireworks from China for the display and invited foreign engineers for technical assistance. “They must have spent more than W6 billion for the fireworks and their display, transportation, and labor,” the source said.

The regime temporarily cut power and banned driving in an area near the Juche Tower for the fireworks spectacular to maximize the effect. The North’s state-run Korean Central Television broadcast the fireworks for an hour from 9 p.m. on Thursday, and reran it the following morning.
…
At the fireworks ceremony, Kim Ki-nam, a close aide to Kim senior and a secretary of the North Korean Workers’ Party’s Central Committee, said, “We put on the fireworks display full of hope today because we have held matchless great men in high esteem generation after generation.” Some interpret this as a hint at the succession from leader Kim Jong-il to his son Kim Jong-un.

You can watch the fireworks show on YouTube: Part 1, Part 2 (the new 10-minute CNC song kicks in at 5:10), Part 3.

Aside: I managed to get a great mp3 of the CNC song.  I am working on a CNC post and you will hopefully be able to donwload  it there.

UPDATE 4: Here is the DPRK Pavilion’s web page (h/t NKNews.org).

UPDATE 3: A video of the DPRK pavilion at the Shanghai expo can be seen here.

UPDATE 2: Voice of America offers a description of the interior of theD PRK’s Pavilion:

Inside, there is a replica of Pyongyang’s Juche Statue, a small waterway that represents the North’s Taedong River, a traditional bridge and large fountain with colored lights.

On top of the fountain, a group of white marble statues of naked boys encircle two others. One boy holds the other up in the air as he lifts a dove into the sky.

In one corner, there is a small cave that contains a reproduction of a mural from the North’s Koguryo Tombs, a World Heritage site.

Along a wall, beneath the phrase “Paradise for the People,” a row of television sets plays videos depicting everyday life in North Korea.

Some of the videos show North Koreans leisurely bowling, playing golf and ice skating. Although some of the footage appears to be recent, other shots seem to be decades old.

Many who visited the pavilion Tuesday say that aside from the fact that there were no lines to get in, they wanted to visit because, as they put it, North Korea is so mysterious.

UPDATE 1:  The Shanghai Expo has posted some information on the DPRK’s Pavilion. Here are some of the details:

Theme: Urban Development of Pyongyang, the Capital of DPR Korea (Prosperous Pyongyang based on the River Taedong Culture)

Pavilion Features: The pavilion perfectly merges national characteristics of DPRK together with its modern beauty. Outer walls are decorated with national flags and a winged steed bronze statue. Main items exhibited in the pavilion include Juche Tower, Taedong River, Korean-style pavilions, rockeries and small stone caves. All of them present a prosperous and modern Pyongyang based on the traditions of DPRK, where education, science, culture and sports have achieved great development during its long history.

Pavilion Highlights
Highlight 1: The Juche Tower Model — 4.5-meter-high model of Juche Tower is exhibited in the pavilion.
Highlight 2: Symbol of Taedong River — winding river flows across the pavilion, reminding people of the stretching Taedong River.
Highlight 3: National Section and Stone Caves — national section and stone caves are exhibited on the right side of the pavilion. Inside the cave the world heritage of tomb murals in Jiangxi County and paintings of DPRK style are displayed.

Here are some photos of the DPRK’s pavilion (h/t Daylife):

And here are some photos from the Shanghai Scrap blog:

ORIGINAL POST: According to the PRC’s People’s Daily:

China welcomes countries including the Democratic People’s Republic of Korea (DPRK) to participate in the 2010 Shanghai World Expo, a Foreign Ministry spokesman said Tuesday.

…

DPRK Chamber of Commerce Vice-Chairman Ri Song Un told Xinhua on March 18 that the country had already finished preparatory work for the 2010 Shanghai World Expo, its first Expo appearance.

Situated in an area of 5.28 square kilometers at the core the city of Shanghai to exhibitions, events and forums, the six-month expo starting from May 1 will attract about 200 nations and regions and international organizations’ participation, as well as 70 million visitors from home and abroad.

Read the full story here:
China welcomes DPRK in attending Shanghai World Expo: FM spokesman
People’s Daily
3/30/2010

Michael Rank

China Southern Airlines is planning flights to Pyongyang from the northeastern city of Changchun from June, a Chinese website reports.

It said flights will begin on June 20, but did not say how frequent the service will be or give any further details.

It said the Korean National Travel Company was in talks with the Jilin provincial tourism bureau about tours to North Korea from either Changchun, the provincial capital, or the border city of Yanji.

China Southern has operated Beijing-Pyongyang flights in the past does not do so at present.

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-04-15-1
4/15/2010

As North Korean tours to Keumgang Mountain and other trips aimed at South Korean visitors are all currently frozen, trips into the DPRK by Chinese tourists are beginning to grow. On April 10, a North Korean official revealed that Chinese group tours would be warmly welcomed by Pyongyang, and on April 12, a group of approximately 400 Chinese visitors and officials arrived in the North. Pyongyang and Beijing reached an agreement on tours last February. Cho Seong-kyu, director of the Choson International Tours, stated that his office, responsible for tours for foreigners to North Korea, is preparing a tour course to Pyongyang, Kaesong, Myohyang Mountain and Nampo for Chinese visitors. He explained that since 1988, 20,000 Chinese tourists annually visit Pyongyang, and that many more tour courses were being prepared.

For the past four years, the Chinese government has banned group tours to the DPRK, but that restriction has been completely lifted. Now, tourist trains are being operated and the range of tours offered is growing. Group tours to North Korea were banned in 2006 after Chinese officials were found to have been inappropriately gambling during their trips, but tours will resume on May 12. With 800 Chinese tourists set to board a DPRK-bound train leaving from Hangzhou, it appears that many Chinese are interested in tours of North Korea. On March 18, China’s National Development and Reform Commission and its Bureau of Travel and Tourism released a “Northeast China Tourism Industry Development Plan,” in which it revealed the plan to permit tours to North Korea. Following last year’s measures to improve industry in the northeast provinces, Beijing is now aiming specifically to bolster the tourism industry in the region by arranging overland tours to Russia and North Korea, as well as developing other new domestic and international tour destinations.

In addition to the existing tour to Sonyang-Dandong-Pyongyang, new routes from Baishan (Jilin Province)-Changbai-Hyesan and Yanji-Hunchun-Fangchuan-Rajin/Chungjin have been included. Until now, tour courses to North Korea were limited to Dandong-Sinuiju-Pyongyang, Sanhezhen-Chungjin/Mount Chilbo, and Mount Baekdu-Samjiyon-Pyongyang. As Rajin Port is opened, the Bureau of Travel and Tourism also plans overland trips to the city, in conjunction with a ferry shuttling Chinese tourists to Vladivostok, South Korea, and Japan. In addition, the Yanbian Autonomous Prefecture is promoting the development of a longer tour, from Hunchun through Rajin, on to Pyongyang and even down to Panmunjom.

North Korea has announced the seizure of South Korean property at the Keumgang Mountain tourist resort, and now Chinese travel agents are signing contracts to sell tours to the resort developed mainly by Hyundai-Asan and South Korean government investment. North Korean authorities have offered six-month contracts allowing the Chinese tour operators to book Keumgang tours, guaranteeing them access to hotels and other facilities in the resort area. Over 1,000 Chinese tourists have already booked tours to Keumgang, to begin after April 20.

North Korea froze South Korean government assets in the resort, including the Visitors’ Center, a spa, and a duty-free store, and deported South Korean employees in a first stage of measures to pressure the South into restarting cross-border tours. On April 13, the North stepped up the measures, freezing Hyundai-Asan and other South Korean private-sector assets, ordering the deportation of employees related to these businesses as well. Korean Central Broadcasting reported on April 8, “Because of south Korean authorities, Hyundai’s tourism agreement and contract have become invalid,” announcing that domestic and international tours would begin again with a new tour operator.

And according to the Choson Ilbo:

The first tour groups from across China started off on their way to North Korea on Monday. China has organized group tours of North Korea since 1988, but they were available only to provinces bordering the North such as Liaoning and Jilin.

But on Monday, a group of 395 Chinese tourists left for North Korea by air or train from Beijing, Shenyang and Dandong, the China National Tourism Administration said. They will gather in Pyongyang before starting an eight-day tour of tourist spots in the capital like the Kim Il-sung statue and Mansudae, as well as Kaesong, Panmunjeom, Mt. Myohyang and Nampo.

Mt. Kumgang is not included in their itinerary, despite threats by the North to find another partner for visits to the scenic resorts. South Korea declined to resume tours there in the wake of the fatal shooting of a tourist in 2008 unless the safety of travelers is guaranteed.

However, some Chinese travel agents are offering tour programs that include Mt. Kumgang.

According to the Choson Ilbo:

A North Korean source saw around 30 identical vehicles crossing the bridge across the Apnok (or Yalu) River into Sinuiju at around 9 a.m. The vehicles were the Chinese compact sedan F3 manufactured by BYD, referred to as the “people’s car” in China due to its popularity. Around 100 cars reportedly crossed the border into North Korea on Tuesday alone. Starting last week, North Korea brought in more than 200 cars, including luxury foreign cars, jeeps and large vans. The total value of the imported cars is believed to be around US$5 million.

The North Korean regime often seeks to ensure the loyalty of senior officials by handing out the latest foreign-made cars on Kim Il-sung’s or Kim Jong-il’s birthday, but the Chinese-made cars imported this time are believed to be gifts for the middle ranks. “To my knowledge, the latest cars are gifts for mid-level officials at North Korea’s prosecution and state security agency and have been allocated to specific people in different regions,” the source said.

North Korea watchers believe the cars were bought to boost the morale of such officials, who were hit hard by the botched currency reform in December. “Failing to take care of mid-ranking officials could jeopardize the transfer of power to Kim Jong-il’s third son Jong-un,” said one North Korea expert. “The purpose of the gifts is to appease discontent.”

Judging from the pictures, it looks like the cars were driven across the Sinuiju/Dandong Sino-DPRK Friendship Bridge.  Satellite image here. 

So it appears the Kim Jong il uses automobiles in the same way foreign governments use international aid in North Korea–to “purchase” influence and support.  If the strategy works on a domestic level (within the DPRK), why does it have so much trouble on an international level?  Feel free to discuss.   

Read the full story here:
Kim Jong-il Imports Hundreds of Cars for Loyal Officials
Choson Ilbo
4/14/2010