North Korean Economy Watch

Daily NK
Lee Sung Jin
11/26/2007

An insider North Korean source said in a phone conversation on the 22nd, “With long-term suspension of exports for the break in China’s investment in North Korea’s iron ore production, the lives of citizens and the Musan Mine laborers have become extremely difficult. There have been talks that this might be the 2nd March of Tribulation (Mass starvation period in the 1990s).”

The South Korean Chamber of Commerce and Industry released a report, the “North Korean Underground Resource Joint Development Strategy” on the 21th saying that China has cleared with a clean stroke North Korean minerals, Musan Mines being a representative example.

The report introduced the contract which gave 50-years-mining rights to the Musan Mine in North Hamkyung, which is North Korea’s best iron ore, for 70 hundred million Yuan (approximately DSD950 million) to China, which can take 10 million tons of iron ores from Musan every year for 50 years.

However, investment in Musan Mine, which was considered the China’s representative investment in North Korean underground resources, was ruptured due to the fact that opinions surrounding on the retrieval ways of shares and investment funds could not be narrowed down. Accordingly, Musan Mine laborers going through difficulty with the operation of the mine have fallen into a severe hardship in living.

The South Korean intelligence authorities confirmed the veracity of the breakdown in investment negotiation early June of this year.

North Hamkyung Province’s Musan Mine is a strip mine containing 30 hundred million tons of coal reserves, 13 hundred million tons of coals capable of digging and several hundred tons of steel concentrate, has offered these materials to the Kim Chaek and Sungjin Steel Mills, but with the unreliable operation of these mills, mining came to a halt in early 2000.

In 2005, the North Korean government closed an investment contract with the Chinese Tonghua Steel Group Consortium and China’s investment in Musan Mine began the fall of that year. As the exports of iron ore started, the North Korean authorities resumed the provision system to mine laborers and their families.

With the influx of many goods including food, gasoline, and construction materials as a reward for exporting iron ore to China, the lives of citizens in Musan have stabilized in these last two years.

However, the volume of production was known to have rapidly decreased with the cease in iron goods export to China and the rupture in joint investment with China.

The source said, “With the cease in iron ore exports to China, provision to the miners have ceased, which has incurred significant damage. We are in the ‘March of Tribulation’ again. When we are barely able to get by, something else occurs.”

The source introduced the current situation of withdrawal for Musan Mine laborers, “With only 500 thousand won (approximately USD 152), a person can get out of mining. It takes 100,000 won at the mina labor department and another 100,000 won to receive a diagnosis at mine hospitals and about 300,000 won to receive approval from the Safety Agency and the county labor department leaders as bribes. The despair of people are so heavy that people hope to come out of mining, even with the granting of provisions.”

Korea Times
Andrei Lankov
11/18/2007

Until recently it would have been just a minor exaggeration to say that Korea is a country without national minorities. The only exception to this rule are the ethnic Chinese who began to move to Korea in the late 19th century. Nowadays, South Korea is home to some 20,000 ethnic Chinese who are considered citizens of Taiwan.

North Korea also has its ethnic Chinese community, whose members, needless to say, hold passports of the People’s Republic of China. The ethnic Chinese of the North are descendants of people who moved there in the 19th century. In the late 1940s, most of them went back, but a few chose to stay, creating a small but unusual community, one of the few minorities in a society which sees its own homogeneity as a source of pride.

From the very beginning of their history, the North Korean huaqiao (as foreign nationals of China are known) found themselves in an unusual and controversial situation. Their presence was not really welcomed: in the 1950s and early 1960s the North Korean authorities went to great length to “cleanse” the land of all non-Korean elements, including citizens of supposedly friendly countries. Hence, the Chinese were strongly encouraged to go back to China.

However, the Chinese themselves were not very enthusiastic about this move: most of them had spent their entire lives in Korea. It was also important that China in the 1960s and 1970s was in an even worse state than North Korea. It had lower living standards, and hardly fared much better in terms of political freedom: Kim Il-sung’s dictatorship might have been bizarre, but it was more predictable and perhaps less brutal than the moody rule of Chairman Mao. People still went to China, to be sure, but they were not in a hurry.

According to a 2001 Chinese publication which cited North Korean sources, in 1958 in the North there were 3,778 Chinese households comprising 14,351 members.[1] In the 1960s numbers dropped on account of the ban on private economic activity, the forced collectivization of agriculture, and the nationalist policies of Pyongyang. These factors conspired to drive the ethnic Chinese away. Thus, by 1980 numbers had fallen to a mere 6,000, of whom half reportedly resided in Pyongyang with most of the balance living near the North Korean border with China.

The situation of the North Korean huaqiao was difficult to describe in one word: they were both discriminated against and privileged. As foreigners, they could not become members of the Korean Workers Party, and this alone made them ineligible for many possible careers (well, no department in the administration or bureaucracy would take them on anyway). However, children of small vendors and vegetable farmers hardly felt too bad when they realized that they would never become district party secretaries or army colonels, their aspirations were milder.

At the same time, the huaqiao were exempt from the many obligations of the average North Korean. For example, they were allowed to have radio sets with free tuning, on the condition that they would not tune in to anything but the official broadcast if some locals were present nearby. They did not attend the boring and time-consuming indoctrination sessions. And one also might surmise that they also enjoyed a much less likelihood of being arrested for some minor improper ties.

Like the ethnic Chinese in South Korea, the North Korean huaqiao have their own schools. According to the same publication, cited by Kim Min-se, in the late 1990s in North Korea there were four Chinese middle schools where students, young citizens of the People’s Republic, studied according to the Chinese curriculum. There were primary schools as well.

However, of all the privileges the most important one was their right to trade. From around 1980, the Korean huaqiao were allowed to go to China or invite their relatives to North Korea. This meant that they were the only group (at least, outside the narrow inner circle of the top families) whose members could go overseas more or less at will. In the 1980s China was beginning its remarkable economic overhaul, and the possibility of using a price differential between two closed markets is the dream of any astute merchant. In few years, most huaqiao made trade their main or only source of income.

They moved back and forth, selling seafood, frog oil, mushrooms and other exotic products, which play an unusually important role in North Korean foreign trade, to China. From China, they brought in garments, cloth, cheap electronics and household items. In the mid-1990s, during the famine, food became a major import item as well. Everything was sold at huge profits, and from around 1990 every huaqiao was seen as a rich person, almost by definition.

However, the numbers of North Korean huaqiao are said to be dwindling nonetheless. The lure of successful China is too great, so they often prefer to leave. They stay in touch with their connections in the North and maintain their business networks, but now they reside in the more comfortable and secure environment of modern China. Their desire to give their children a better education also plays a major role in the repatriation process, another similarity with the shrinking Chinese community in the South.

However, there is another move afoot as well: some Chinese are moving to North Korea to start businesses there, and they might just lay the foundations for a new huaqiao community. But that will be another story, of course.

Bloomberg
Bomi Lim
11/13/2007

North Korea’s Daepung Investment Group will set up a $10 billion fund with China Development Bank to help Chinese firms operating in North Korea, Yonhap News reported, citing the company’s vice president.

The fund will be used to help Chinese companies build roads, railways and ports in North Korea, Daepung Vice President Bae Kyeong Hwan was quoted as saying. Bae didn’t say how much each country will contribute the fund.

Daepung also plans to set up a bank to attract investment from overseas, the report said.

China is North Korea’s biggest trading partner and an important provider of food and fuel. North Korea is isolated from most of the rest of the world and has received virtually no foreign investment.

Daily NK
Moon Sung Hwee
11/13/2007

Recent demand for small-sized TVs has been rapidly increasing in North Korea’s border regions, resulting in a huge price increases.

According to an inside North Korean source, the price of 12-inch (dubbed “chok” in North Korea) and 14-inch TVs, compared with prices this time last year, increased by 50 thousand to 100 thousand won (approx. USD15-30). Despite the increase, these small TVs are selling out, resulting in a supply shortage in stores located throughout the border regions.

Most 12-inch black and white TVs are Chinese-made. These TVs, which could have been purchased for a mere 150,000 won (approx. USD46) up until the end of last year, have recently sold for as much as 250,000 won.

The reason for the increase in the border region is that the state has strengthened inspections in these areas of those who watch Chinese TVs. The recent preference for small-size TVs comes from the fact that they are relatively easy to conceal.

A majority of border region civilians from North Pyongan to North Hamkyung Province can receive Chinese TV signals, thanks to the close distance. Among the channels able to be viewed is once broadcasted via Yanbian TV and South Korea’s China TV (www.openchina21.com). In accordance with a 2004 agreement between these two companies to promote broadcasting and cultural exchange, diverse South Korean dramas and movies as well as advertisements of South Korean products can be viewed.

The North Korean government collected remote controls to prevent the viewing of Chinese TV along the border region and implemented measures such as sealing the channels. Throughout the China-North Korea border region, inspections conducted by the No. 27 Bureau (under the Central Communications Office) are still very much underway.

The source said, “No. 27 Bureau agents come knocking at the door and turn on the TV at once to verify which channels have been viewed. Further, they inspect the state of sealed channels; if the seal has been damaged, the TV is confiscated.” When inspections take place, 30~50 sets are taken at a time, and in order to retrieve them, several thousand won in bribes is needed.”

However, in cases where these methods have failed to prevent the viewing of Chinese TV, technicians have entered homes and intercepted the circuits inside the TV, re-sealing the attached apparatus with high-strength adhesives. By doing so, the channels are forcibly fixed on Chosun Central TV broadcasting.

When the government carried out such invasive measures, the civilians put up a strong resistance, “Are they planning to just break TVs?” However, the government enforced the regulation of internal equipment, even when faced with civil rebellion.

The source said, “The apparatus inside televisions have been fixed so that people cannot watch Chinese TV channels, and inspections have been occurring randomly, so people have been watching and hiding small-size TVs in their homes.” This activity is reflected in the price increase.

One defector who has experience in selling used TVs in Rajin in North Hamkyung Province said, “Small-size TVs by which people could watch South Korean broadcasting were originally in high demand in South Pyongan, Kangwondo and South Hwanghae.” He said, “Since they cannot pass through customs, they are usually smuggled into and sold on the black market.”

The People’s Safety Agency handed down a decree stating that, “Those who pose a threat to the state and social system will be severely punished. Get rid of all kinds of places offering karaoke, movies, film subscriptions, PCs, and games.” It further emphasized the National Security Agency’s tightening of cell phone regulations along the border region.

Since last year, severe regulation of illegal films (foreign and South Korean DVDs and VCDs) has continually been enforced. Since this year, the North Korean government has gotten headaches from regulating the houses of civilians.

The North Korean government claims that the purpose of the regulations is “Destroying enemy maneuvers and directly impugn acts that pose a threat to society and the system.” North Korea’s opening and reform still seems far off.

Daily NK
Kwon Jeong Hyun
11/12/2007

North Korean authorities recently started regulating motorcycle operation in order to control private market.

Motorcycle is most preferred means of transportation especially for North Korean salespersons. And in North Korea, everybody must get a license from the government to operate cars, motorcycles or even bicycles.

North Korean authorities now give license to only Made in DPRK “Bugang Motorcycle,” which is considerably more expensive than those imported from China.

Choi, a 33 years old resident of Sinuiju visiting his relative in Dandong, China, said on last Thursday “getting operator’s license for Made in China motorcycles has become ridiculously difficult.” According to Choi, only domestic motorcycle owners receive license and popular dissatisfaction increased.

It seems that North Korean authorities want to stop growing of private market by making it impossible to operate motorcycle, a vital part of transportation of goods.

Choi added “even before, someone had to bribe police officer to get a license, but now, bribery doesn’t work for Chinese-built motorcycles at all.”

Why people prefer Made in China? “Korean motorcycles manufactured in Pyongyang cost 1,500 US dollars and often break down. However, Chinese ones cost only 600 dollars while perform far better.”

Choi complained that “some people who operated Chinese motorcycle without license got their bikes confiscated.”

The loots were sent to the Army troops on DMZ.

Chinese motorcycle has become prevalent since 2002 when North Korean residents whose relatives lived in China received it as gift and operated for commercial purpose.

According to Choi, “Motorcycle can carry a certain amount of goods to inlands and it is so convenient. Even if motorcycle is expensive, everybody wants to own one. People buy seafood on the coast and bring them to the cities or sell small commodities.”

For alluvial gold, price differs among regions, so transporting it fast with motorcycle is lucrative business.

Lee, defected Pyongyang last year, said “In the past, a few rich people bought used Japanese motorcycles like Honda or Yamaha, but now many people operate Chinese ones for commercial purpose.”

Daily NK
Yang Jung A
11/7/2007

Although the North Korean economy has been growing since late 1990s, it is hard to say that the economy has growth on its own.

A senior researcher at the Korea Institute for National Unification, Choi Su Young, released a paper titled “the Latest Tendency of the North Korean Economy” in the October “Finance,” which is issued by Korea Federation of Banks. He pointed out in the paper that “North Korea’s economic reliance on China is getting serious and cited the state’s 1.7 billion dollars in trade with China.”

He explained “On one hand, North Korea exports to China in 2006 increased to 72.7% compared with exports in 2002; on the other hand, imports from China increased to 163.8%. This resulted in a recorded deficit of 760 million dollars. The rate of North Korean trade reliance on China was 48.5% in 2004, and it reached 60% last year.”

He relayed that “In the production industry, North Korea has to rely systematically on China’s raw materials, energy, facilities and parts. North Korea is importing its entire amount of petroleum for transportation and production. Chinese influence on the North Korean economy is so absolute that 70-80% of consumer products are made in China.

Mr. Choi insists that “Although foreign aid and South-North economic cooperation were expanding and its reliance on the influx of foreign currency was great, North Korea was staying in low-growth status, which means North Korea does not have the economic foundation for development.

According to the report, the scale of exchange between the South and the North was rapidly increasing through the annual provision of South Korean rice and free fertilizer supporting and South Korean enterprises’ activities at the Kaesung Industrial Complex.

With the exception of South Korea and China, there are no countries willing to invest in North Korea. Most developed countries turn away from North Korea because the standard and environment related to North Korean investment are significantly inferior to the norm.

He explained that “The North Korean investment environment is inconvenient for foreign investors due to obsolete infra-structures, high distribution costs and limited markets. It is unnecessary to mention the international policies related to North Korea.”

Mr. Choi added that “The scale of North Korean foreign trade was 2 billion dollars in 2000 and reached 3 billion dollars in 2006. Exports amounted to 950 million dollars and imports came to a total of 2.05 billion dollars.”

Daily NK
Moon Sung Hwee
11/7/2007

A source inside North Korea reported on November 5th that the North Korean Ministry of Education lately directed every school to stress the importance of the Korean language education and to encourage the use of the mother tongue.

In a phone interview with DailyNK, the source said, “At workplace, there are those who read out to the workers a handbook titled ‘Let’s maintain our superior morals and actively promote the use of our mother tongue!’”

In the March 2007 edition of “Learning Culture & Language,” Jong Soon Ki, the most well-known linguist in North Korea and a professor at the Institute of Linguistics of Social Science Center, urged the public to stop admiring English and Chinese language, saying, “The difference of our mother tongue between North and South Korea has been getting larger since the division of Korean.”

The source said that the North Korean authorities started to place high importance on the native tongue in an attempt to stop the surge in the use of the Chinese and foreign languages which have been spread to the country through the circulation of South Korean soap operas since 2000.

After the food crisis in the mid-1990s, the number of defectors, border traders, and Chinese businessmen investing in North Korea have increased, which helped the Chinese culture spread into the country. Many young North Korean began to display interest in Chinese movies, Chinese products and the Chinese language. It became popular among them to read out the brand names of Chinese products in Chinese.

In North Korea, people use the Chinese words “yaoyunji (搖運機)” or “yaoyun (搖運)” for a remote control. They do not use its Korean name “wonkyuk-jojonggi,” translated and adopted by the North Korean authorities.

As for a cell phone, people use its Chinese name “Dakeda (大可大)” or “Souji (手機)” rather than its North Korean name “Sonjeonhwa (literally meaning a handphone).” Blue jeans are called “Niuzaiku,” in the border areas, a refrigerator is called its Chinese name “Bingxiang (冰箱)” and VCD “Woicidie.” Indeed, many products or medical supplies are called their Chinese names such as “Kouhong” for a lipstick.

The use of foreign languages has become more prevalent across the country especially since 2003 when the frenzy over Chinese culture was replaced by its South Korean counterpart. It is particularly noticeable that North Korean people no longer call South Korea “South Chosun” as they used to but call it “Hankuk (meaning the Republic of Korea).” In these days, the young people in Pyongyang look down on those who still use the old name, “South Chosun.”

The source said, “South Korean culture is taking over the Chinese one, and the demand for the South Korean films and products is increasing. People learn new words from South Korean soap operas and these words are becoming popular.”
The source added, “I guess this is because South Korea is better off than China, and people have a sense of homogeneity towards South Korean people.”

“Nowadays, when people go to restaurants, they do not use the words “siksa annae” or “siksa pyo,” a Korean name for a menu. Instead, many people just call it “menu” as it is pronounced in English and widely called so in South Korea,” said the source.

The source continued, “We can see how rapidly the South Korean culture has spread into the country by the fact that many people no longer use the Chinese name for a cell phone, Shouji (手機) and instead use the name ‘Hyudaephone’ as it is called in South Korea.” The source said, “At Jangmadang (markets), people casually say the names of South Korean products as they are such as “Cuckoo (rice cooker)” or “Color TV.”

When asked about the popular words adopted from South Korean culture, he listed following words: “diet,” “wellbeing,” “music video,” “sausage,” “single,” “wife,” “dress,” “pop song,” and “fast food.” (See that all of them are English words. In South Korea, people use many English words like the one listed here in everyday life)

32-year old Kim Kyung Wuk (pseudonym), who defected from Kyungsung county of North Hamkyung Province and recently came to South, also confirmed this phenomenon.

Kim said, “In the past when people feel distressed, they expressed their feeling using the word, ‘uljukhada’. But now many young people use the words ‘jajeong’ or ‘stress’ as South Korean people do.” Kim added, “The North Korean people did not know the word ‘stress’ when they first heard it from South Korean movies they watched only three years ago. But now even the old people know the new word.”

Many defectors say that many new words adopted from South Korean TV dramas are being spread into the country especially among the young people such as “miss-Korea (a beautiful woman),” “show (fake),” “ssonda (I will treat you),” “hwakeun (passionate),” “single” and “wife.”

Kim said, “Those who watch South Korean dramas and listen to its music take a great interest in everyday language of the South, and try to adopt it as long as they could escape the state’s regulation.”

Defectors said that the current phenomenon illustrates that North Korean people admire the South Korea and greatly hope for reforms and open-door policy.

Lee Chul Min, the operating manager at the Association of the North Korean defectors said, “For those who live in a closed society, exposure to foreign cultures can be a really fresh experience. It is natural of them to admire more advanced societies and cultures.” Lee added, “The current frenzy over South Korean culture will help bring a change into North Korea and overcome the differences between two Koreas.”

Daily NK
Yang Jung A
11/5/2007

Forty-year old Park Sung Jin (pseudonym), a cloth merchant in Chongjin lately went to Tumun in Jilin Province, China under the pretext that he would visit his relatives there. He looked for Chinese business partners and tried to find items he can sell.

It took guts for Mr. Park to venture a trip to China. However, his efforts might turn out to be fruitless.

Mr. Park needed to get a border pass to go to China, and it costs him a great fortune. The pass allowed Mr. Park to visit his pre-determined destination only once. He paid 1 million North Korean won (approx. US$340) for the pass which he applied for in February, 2006 and received in August, 2007. If he wanted to have it within six months, he had to pay about 4,000 Yuan (approx. USD560).

Applicants for the pass also need to bribe the officials of People’s Committee and Security Agency because they are in charge of issuing visas to China. In fact, Mr. Park had to spend extra money on bribery to go to China for business.

Since it was Mr. Park’s first time to apply for the visa, he went through a relatively simple visa procedure. As for those who apply for the visa more than once, more complicated procedure is waiting. They are asked to state what they had done during their first visit to China.

If Mr. Park is issued a passport by any chance, he can go to many places for long periods of time. Unfortunately those over the age of 45 are more likely to get a passport (Mr. Park is forty). Moreover, the eligibility for the issue of a passport is much more complicated and it costs big fortune to get one. For instance, those who apply for the issue of a passport are supposed to pay $40 for application fee. However, the applicants need to spend extra money on bribes and other things, and for the most time end up spending more than $500 to get a passport.

Mr. Park is now busy visiting relatives and business partners. He is determined to make money as much as possible during his stay in China so that he can get his money’s worth upon his return home.

There are more theft incidents in Hoiryeong than ever

Lately, 45-year old An Myong Sook, a resident in Hoiryeong city, never hangs out the wash to dry outside. She tells her 15-year daughter not to forget to lock the doors when she leaves home because there are so many thieves in her neighborhood.

Since last year, the construction of apartments and roads has been underway around her area in order to commemorate the 90th birthday of Kim Jong Suk (the late mother of Kim Jong Il). For the construction, many outside workers came to her area, and some of them have broken into neighboring houses.

After having repaired the road laid behind the statue of Kim Jong Suk, the workers have started building the road between Hoiryeong and Chongjin since June. Many workers came to Hoiryeong from Rajin, Chongjin, Kilju, and Hamheung.

However, ever since the outside workers came to Hoiryeong in June, the number of households which lost their belongings or livestock has increased. The local people of Hoiryeong are increasingly complaining that the increase in rice price and theft has to with the presence of the outside workers.

Accordingly, the North Korean authorities have strengthened the punishment for theft. In the past, stealing was considered as a petty misdemeanor. Nowadays, that guilt of theft is sent to labor training facilities. The authorities confiscate all stolen items sold to the third person.

However, it is difficult to get back basic supplies such as clothes once they are stolen, and therefore every household in Hoiryeong is on the alert for theft.

Korea Times
Andrei Lankov
10/21/2007

When I was preparing for a trip to Yanbian, people told me that I would not have any difficulties in communicating with the locals: “They all speak Korean there.” It seems like an exaggeration, but it was not.

Every time my poor and broken Chinese was not up to the task, I asked if somebody around could speak Korean and such a person was found in seconds. Indeed, Yanbian is officially known as the Korean Autonomous Prefecture.

From the 1880s the Koreans began to move to the area in large numbers, and by 1949 when the Communists took power in China, they formed a majority in the borderland areas. In 1945 about 1.7 million Koreans lived in China. About 500,000 of those chose to move back to Korea in the late 1940s, but a million or so decided to stay.

Nowadays, the Korean population has reached two million, so some Korean nationalists even describe this part of China as “Third Korea,” together with the North and South Communist China emulated the Soviet approach to ethnic minorities. Ideally, each minority had to be given some kind of autonomous quasi-statehood.

Within such statehood, the ethnic minority would be provided with the education in their native language, the media in this language and some token representation of the minority in the government agencies. This scheme was applied to Yanbian as well, and in spite of all problems this policy has worked so far. On the one hand, Koreans of the area, unlike Koreans in the former USSR, Japan or U.S., have managed to keep their language.

On the other hand, their loyalties seem to remain firmly with Beijing. The Korean language is widely used in the area. Lively talks in Korean can be overheard during walks through the city of Yanji, the capital of the Prefecture. It is remarkable that the language is used not only by elderly people, but often by youngsters as well.

As stipulated by the law, all shops and government agencies have to display signs in two languages, and it is explicitly stated that the Korean text should not be smaller than its Chinese equivalent. The local newsstands sell a number of Korean language publications, ranging from pulp fiction periodicals with semi-nude beauties on the cover to a solid quarterly which publishes the work of local Korean-language writers (such a quarterly seems to be run on a government subsidy).

The ethnic flavor has even become a tourist attraction. The dog meat restaurants are everywhere, and unlike South Korea, they are not hidden but openly advertise themselves. The images of the hanbok-clad ladies are another feature of local advertisements. The promotion of ethnic features seemingly targets both South Koreans and visitors from other parts of China. It is remarkable that until recently the local Koreans overwhelmingly sent their kids to Korean language schools.

The curriculum at those schools was identical to the schools attended by the Han Chinese, but Korean was the major language of tuition. After graduating from high school, young Koreans can proceed to the local university where they are officially granted preferential treatment at the entrance exams, sort of “affirmative action,” Chinese style. Of course, the life of Koreans was not always easy.

There were periods of restrictions and even open persecution, especially in the crazy decade of Mao’s Cultural Revolution in the late 1960s. At those days, the relations between Beijing and Pyongyang went sour, and this influenced the local Korean community to some extent. A middle-aged ethnic-Korean businessman told me, “Back in the late 1960s, I seldom saw my parents. Because they were members of an ethnic minority, they had to go to ideologicalstruggle sessions every day and had to stay until very late.

”However, that period was an exception. The same person, who is buy no means a fan of the current Chinese system, still admitted when I asked him about discrimination: “Discrimination? Well, almost none, to be frank. They appoint some Han Chinese officials to supervise the administration, but basically I don’t think Korean people here have problems with promotions or business because of their ethnicity.

Sometimes being a minority even helps a bit — it’s easier to get to a university if you come from a minority group.” However, in recent years the situation in the area began top change fast. The Koreans began to switch from their native language to the Chinese (or, to be more precise, Chinese is increasingly seen as a native language by the children born in Korean-speaking families). Schooling in Korea faces a major crisis.

According to statistics, widely known and discussed, the number of children enrolled in Korean schools in 2000 was merely45.2 percent of the 1996 level. In the 1990-2000 period, 4,200 Korean teachers, or some 53 percent of the total, left their jobs because of school closures. It is remarkable that younger people with whom I could talk often have obvious problems with communicating in Korea, and whenever possible prefer to switch to Chinese. In families they still talk Korean to the elders, but Chinese is a natural choice between themselves.

In short, the assimilation began, and it might be unstoppable. Koreans leave their villages and go to the cities where they work and cooperate with Chinese. They often intermarry, and Chinese becomes the sole language of their kids. Like it or not, but the days of the “Third Korea” seems to be over.

Financial Times
Anna Fifield
Richard McGregor
10/18/2007

China suspended key rail freight services into North Korea last week after 1,800 wagons carrying food aid and tradeable goods crossed into Kim Jong-il’s hermit state but were never returned.

Absconding with Chinese wagons would be a strange move for North Korea because Beijing is Pyongyang’s closest political ally and biggest provider of food, goods and oil. Analysts monitoring North Korea said Chinese officials had privately complained to them that the North Koreans were dismantling Chinese wagons and selling them back as scrap metal.

The Chinese railway ministry suspended a number of rail freight services into North Korea on October 11, humanitarian agencies operating in North Korea told the Financial Times. The ministry told international aid agencies that it would not send any more wagons into North Korea until Pyongyang returned the 1,800 Chinese wagons.

Tony Banbury, Asia director for the UN World Food Programme, said that the curtailed service had held up the delivery of 8,000 tonnes of maize and wheat already stockpiled in Dandong, a Chinese border town. “We now have significant amounts of food but we can’t deliver it,” Mr Banbury said.

Reliefweb, a United Nations website for aid agencies, reported that the delivery of food stocks into North Korea had been “critically affected by the cessation of movement of railway wagons from China”.

An official with China’s railway ministry said yesterday that it was not aware of any suspension of freight services into North Korea.

But Fu Xue, of the Dandong Tianda International Freight and Forwarding Company, said there had been delays in the return of wagons but that North Korea had asked for permission from China.

North Korea has frequently failed to pay for goods or to pay back debt. It has also long been accused of relying on currency counterfeiting and drug smuggling to stay afloat.

But purloining Chinese wagons would be a brazen move. China is already thought to be disillusioned by Pyongyang’s refusal to embrace economic reform. It was also angered by North Korea’s decision last year to conduct a nuclear test despite Beijing’s objections.

North Korea has a history of not returning vehicles. In 1998, the late Chung Ju-yung, founder of South Korea’s Hyundai Group, donated 1,001 cows to North Korea to make amends for stealing a cow as he escaped from the north as a boy.

Pyongyang said the cows should be transported on Hyundai trucks. The trucks were never seen again.