North Korean Economy Watch

By Benjamin Katzeff Silberstein

Yonhap reports a new agreement between North Korea and China to build a bridge over the Tumen River, connecting Tumen City in China and Namyang in North Korea:

North Korea and China have signed an agreement to build a new bridge over the Tumen River that runs between the two nations, Chinese officials said on Wednesday, in the latest sign that economic ties between Pyongyang and Beijing remain largely unaffected despite the North’s nuclear and missile programs.

The agreement was signed in Pyongyang on Tuesday by North Korean Deputy Foreign Minister Pak Myong-guk and the Chinese Ambassador to North Korea, Li Jinjun, the Chinese Embassy said in a statement.

The new bridge will link the North Korean border city of Nanyang and the Chinese border city of Tumen, where bilateral trade with North Korea is bustling.

Financial terms of the deal were not disclosed.

During the signing ceremony, Li told Pak that the new bridge “will provide greater convenience for people of the two countries and trade ties” and “will also contribute to improving infrastructure of the China-North Korean border,” according to the statement.

Tumen is, of course, close to the larger city of Yanji (연길) and the two are well connected by highway.

It is perhaps symbolic of China-North Korea relations on the more local level that the announcement comes amidst news of increased signs of North Korean nuclear and rocket activity. Often, economic activity and ties between Chinese and North Korean border regions goes largely unaffected by regional political tension.

Read the full story:

Yonhap News

N. Korea, China sign deal to build new bridge over Tumen River

09/16/2015

Yonhap News

Institute for Far Eastern Studies (IFES)

North Korea recently promoted its cooperation with foreign companies, highlighting a North Korean cement company that has received investment from a French corporation. This is viewed as a strategy by North Korea to attract foreign investment by publicizing examples of foreign capital in the country.

On September 1, 2015, North Korea uploaded an article on its foreign website ‘Naenara’ promoting the Pyongyang Sangwon Cement Joint Venture, which the French cement company Lafarge has invested in. President of the company Yun Chae Hyok was quoted as saying, “Through each other’s efforts the company is raising the quality of cement by expediting the modernization of the production process as well as increasing production to contribute actively to the country’s primary construction targets.”

Regarding the Sangwon Cement Joint Venture, the Naenara article stated, “The quality of limestone is good, the reserves are plentiful, and from a transportation perspective, the location is good […] The production process is automated, and the company is using supplementary materials, including limestone, in production, so the outlook is very good.” The article also introduced the company Lafarge. “The French building materials company Lafarge, which has more than 200 cement factories, is a corporation that specializes in the production of cement and plaster as well as aggregate and concrete,” it explained.

Naenara also reported that in 2014 the joint venture company built ‘Affiliate Furnace No. 1,’ and according to a decision made by the board of directors in June 2015, next year it will complete construction of ‘Affiliate Furnace No. 2.’ It is believed that North Korea’s intent in promoting the Sangwon Cement Joint Venture is to attract investment from other foreign companies by publicizing examples of foreign capital in the country.

The Pyongyang Sangwon Cement Joint Venture was created when Lafarge invested in North Korea’s Sangwon Cement Complex. In 2007 the Egyptian company Orascom, which is currently invested in North Korea’s Koryolink, acquired 50% of the shares in Sangwon Cement and prepared to invest in the company, but in December of that year it passed its shares and the related mining rights to Lafarge. At the time Lafarge commented, “Given the rapidly growing demand for cement in North Korea, the potential for Sangwon Cement Factory is large.” The company went on to update factory equipment and expand investment in machinery and facilities.

According to Yonhap:

Inter-Korean trade in the first seven months of this year recovered to levels before Seoul imposed blanket sanctions against the North for the sinking of its naval ship, government data showed Thursday, thanks to increased exchange via a joint industrial complex.

According to the Korea Customs Service (KCS) data, the value of cross-border trade reached US$1.53 billion in the January-July period, which is roughly on par with $1.56 billion reported for January-July of 2009. The total also marks a 22.4 percent increase from $1.25 billion worth of goods traded in 2014.

In the seven-month period, South Korea shipped some $716 million worth of intermediate goods and components to the North and brought in $816.5 million in assembled products.

The increase was attributed to a rise in the unit cost of products traded through the joint industrial park in the North’s border city of Kaesong.

Two months after the North’s deadly torpedoing of the Navy ship Cheonan in March 2010, Seoul slapped the sanctions on Pyongyang, severing almost all exchanges with the communist North.

In 2010, trade between the two Koreas plunged to just over $1.14 billion, while in the following year, the figure fell to just under $11.2 billion. Trade figures rose to around $1.27 billion in 2012, but nosedived again to $604 million in the following year after Pyongyang pulled out its workers from Kaesong, effectively shutting down the complex for five months.

Almost all of the trade during the seven-month period centered around the Kaesong industrial complex just north of the demilitarized zone that separates the two Korea.

The zone, which was excluded from the sanctions, is home to more than 120 South Korean companies that employ about 55,000 North Korean workers. It was created following the landmark 2000 inter-Korean summit and first churned out products in late 2004.

Besides the exchange via Kaesong, the KCS said there is no other meaningful trade between the two sides, since the sanctions cut off most exchanges with the North, including tourism, commercial transactions and private aid. Even the Kaesong complex is affected because no new investments are permitted.

Related to the rise in trade, Chung Ki-sup, the chairman of the Kaesong Industrial Complex Companies Association, which represents the interests of local firms operating in the North Korean complex, said he wants the two Koreas to hold talks that would ease restrictions.

“Despite the increase in trade, it is fundamentally impossible to expect any real change under the present circumstances,” the entrepreneur said. He pointed out that more trade with the North can benefit the South Korean economy in a period of slow growth.

Read the full story here:
Inter-Korean trade returns to pre-sanctions levels
Yonhap
2015-9-3

According to Yonhap:

The United States has imposed sanctions on two North Korean trading firms under a law banning the transfer of materials related to weapons of mass destruction, according to the State Department.

Polestar Trading Company, Ltd., a North Korean entity in China, and RyonHap-2, a trading firm in the North, were among a total of 22 entities sanctioned by the State Department under the Iran, North Korea, and Syria Nonproliferation Act, the department said in a Federal Register notice.

Affiliated with the North’s Second Academy of Natural Sciences, Pyongyang’s main weapons development agency, RyonHap-2 is believed to be involved in weapons exports and parts procurements.

The State Department notice, published Wednesday, did not provide specific violations committed by the two firms. The sanctions will remain in place for two years, it said.

…

The addition of the two North Korean firms brought to 18 the total number of North Korean entities and individuals that remain under active sanctions under the State Department’s Iran, North Korea, and Syria Nonproliferation Act.

But the U.S. Treasury Department maintains more comprehensive sanctions on counties like North Korea and Iran. About 70 North Korean individuals agencies, entities, and vessels are on the department’s Specially Designated Nationals’ list.

Here is the notice in the Federal Register.

Read the full story here:
U.S. imposes sanctions on 2 N. Korean trading firms
Yonhap
2015-9-5

By Benjamin Katzeff Silberstein 

In Wall Street Journal, Jeyup Kwaak reports on a new defector survey by Seoul National University’s Institute for Peace and Unification Studies (08-26-2015) (added emphasis):

The Seoul National University Institute for Peace and Unification Studies annually surveys more than 100 North Koreans who defected in the prior calendar year. The results provide firsthand insight into developments in the isolated state, though its researchers said they shouldn’t be read as generalized facts due to the small pool of respondents.

[…]

The latest survey, of 146 North Koreans who escaped in 2014, shows significant growth from the previous year in the number of people saying they conducted private business activities and paid bribes to enable them. A little more than half said they received no money from the state, down from last year’s survey but up from the one released in 2013.

Experts say between half and three-quarters of North Koreans’ income comes from quasi-illegal market activities, such as trade of basic goods smuggled in from China, but sporadic crackdowns by national or regional security officials lead to irregular business and bribery. Defectors say officials often collect fees when they set up a booth at a market.

The results themselves do not present a new trend. Several previous defector studies indicate that markets are perhaps the most important source of income and sustenance for many (if not most) North Koreans. However, a few things are interesting to note.

The links may not be entirely clear, but it is at least symbolic that the current survey, albeit with a very small number of interviewees, suggests that support for Kim Jong-un and the leadership may not be waning, at the same time as market activity continues unabated. This at least calls into question an assumption that sometimes occurs that market trade would lead people to become more critical of the regime.

Again, too much shouldn’t be read too much into a small study with participants that probably are not geographically or socially representative of North Korea as a whole. Defectors as a group rarely are. But perhaps one could imagine that market trade being so institutionalized and regulated by the regime would make it more synonymous with the regime itself. I.e., if market trading is seen as something positive, maybe this reflects positively on the regime as well — perhaps the market has been co-opted.

The article also reminds us of the rather peculiar combination of dynamics seen under Kim Jong-un. On the one hand, market trade seems to continue unabated domestically, and initiatives like the new special economic zones and the agricultural reforms show that there is at the very minimum some new thinking going on.

But on the other hand, border controls have been tightened to a degree rarely seen since the mid-1990s, according to defector reports. Just today, DailyNK reports (in Korean) that resident in the Sino-Korean borderlands have seen their access to the Amnok river, often used for laundry by locals, increasingly restricted as of late. As the WSJ writes,

Just 614 North Koreans made it to the South in the first half of this year, compared with 2,706 in the 2011 calendar year, according to the most recent ministry data.

The drop in North Koreans who visited China on legal visas so far this year should perhaps also be seen in this context.

Taken together, the tightened border controls on the one hand, and the seemingly changing (one could say “progressive”) rhetoric on economic matters on the other, paint a mixed picture.

In the early days of Kim Jong-un, the question was whether he was a reformer or a hardliner. A few years into his rule, it seems he might be neither and both at the same time.

UPDATE 1 (2016-6-6): Mr. Stammers has been sentenced. According to Reuters (via The Guardian):

A British citizen who worked for a Philippines-based global criminal organisation was sentenced on Friday to more than 15 years in a US prison for conspiring to import 100kg of North Korean methamphetamine into the United States.

Scott Stammers, 47, was sentenced by US district judge Andrew Carter in Manhattan. He was one of five defendants who pleaded guilty in 2015 in a case stemming from a US Drug Enforcement Administration sting operation.

His case is one of several prosecutions to flow out of the 2012 arrest in Liberia of Paul Le Roux, the head of a multinational drug and weapons trafficking enterprise who turned into a top government informant.

On Monday, Joseph “Rambo” Hunter, a former US army sergeant who prosecutors said oversaw contract killings for Le Roux, received a 20-year prison term for conspiring to kill a federal drug agent and an informant.

Prosecutors said Stammers, while living in the Philippines, managed drug and weapons trafficking for an organisation led by Zimbabwe-born Le Roux, who participated in the sting that resulted in his arrest.

Prosecutors said in 2012, Le Roux tasked Stammers and fellow British citizen Philip Shackels with storing and protecting a large amount of North Korean-produced methamphetamine obtained from members of a Hong Kong-based organisation.

Law enforcement in Thailand and in the Philippines later seized the methamphetamine.

In 2013, the same members of the Hong Kong organisation, Ye Tiong Tan Lim and Kelly Allan Reyes Peralta, agreed to supply 100kg of the methamphetamine to purported members of a South American drug cartel, prosecutors said.

The South American cartel members were actually DEA informants, prosecutors said.

Tan Lim and Peralta agreed to deliver the North Korean-produced narcotics in Thailand, where Stammers, Shackels and another defendant, Adrian Valkovic, would provide security, transportation and storage for the drugs, prosecutors said.

The five men were arrested by Thai law enforcement in September 2013 while working on the deal, after Stammers reported to Le Roux that “all main players are now on the ground,” prosecutors said.

Like Stammers, who received a 181-month prison term, the other defendants pleaded guilty to conspiring to import methamphetamine into the US.

Valkovic was sentenced in January to 113 months in prison, Peralta in April received a 91-month term, and Shackles was sentenced to 85 months. Tan Lim’s sentencing is set for Tuesday.

Read the full story here:
UK man jailed for 15 years in US for North Korean drug plot
Reuters
2016-6-3

ORIGINAL POST (2015-4-27): According to the AFP:

A British man pleaded guilty in New York on Thursday to conspiring to import 100kg of dangerously pure North Korean methamphetamines into the United States, American prosecutors said.

Scott Stammers, 46, was one of five defendants arrested by authorities in Thailand in September 2013 on suspicion of preparing to ship the drugs by boat.

He faces 10 years to life in prison when sentenced at a future date by a US judge. Three of the other defendants pleaded guilty earlier this month.

The fifth, 32-year-old Philip Shackels, is scheduled to go on trial in New York on 21 September.

Manhattan US attorney Preet Bharara thanked authorities in Liberia, Romania and Thailand for assisting with the US investigation.

“Stammers’ scheme ended not with the North Korean methamphetamine flooding American streets as he had intended, but rather with a guilty plea in a Manhattan federal court,” Bharara said in a statement.

Defendants Ye Tiong Tan Lim and Kelly Allan Reyes Peralta had belonged to a criminal gang, which had claimed to have stockpiled one ton of North Korean methamphetamines in the Philippines for storage, court documents say.

Read the full story here:
Briton Scott Stammers pleads guilty to North Korean drug smuggling plot
AFP
2015-8-27

Pictured above (Google Earth): Guomenwan Trade Zone

UPDATE 3 (2016-7-1): NK News translates this article from China News Online:

First goods cleared for trade in China-North Korea border zone

On July 1, the Dandong Sino-North Korea border trade zone reported that the first goods imported from North Korea had cleared customs. The shipment totaled 12 tons with 26 different types of products, including matsutake dried mushrooms, honey, Codnopsis grass and other North Korean specialties. The trade zone’s customs entered trial operation on June 26. There are currently 10 Dandong trading enterprises active in the zone, and the North Korean side is also preparing to become more actively involved. The zone plans to eventually feature 300 North Korean goods for sale. Under zone regulations, residents within 20 kilometers of the China-North Korea border at Dandong will be able to trade commodities with North Koreans living 20 kilometers or less from the border after it enters official operation. Up to 8,000 RMB worth of merchandise is exempt from duties and import taxes per individual per day. According to a representative of the zone’s service center, anyone 18 and older can apply for certification of residence within the zone. In the future, after making their selections, those with this documentation will then submit a list of goods purchased to the service center before making payment; the trader then applies for the tax exemption. All imported North Korean goods will require approval by the China Customs Administration.

UPDATE 2 (2016-1-5): Leo Byrne reports in NK News:

“Only the first line of the zone is opened … (The rest) will open this April, according to an official there,” Lee Chang-ju, a PhD candidate at Fudan University, who studies the Sino-North Korea border area and who spoke with people at the tax free zone told NK News.

Lee added the new zone will be open to North Korean companies, but not individuals. As previously reported there will be no tax on transactions there providing they amount to less than 8000 Yuan ($1227).

Photos of the new zone also indicate that it will be divided into numerous areas, each selling different categories of products.

Zones A and B will sell machinery, industrial equipment and electrical equipment, whereas Zone C will be more geared towards North Korean touristic products, seafood, health care products, as well as traditional DPRK items.

“When I went to there, there was nothing to sell, but they said ‘you can general goods just like cosmetics,’” Lee added.

UPDATE 1 (2015-12-30): According to Euro News:

It is supposed to be a key economic gateway to reclusive North Korea.

But two months after its opening, business activity in a trade zone of the Chinese border city of Dandong is flat.

Shops lie empty and customers are in seriously short supply.

Why? The duty-free zone manager is vague.

“Nothing has been decided yet. The space could be rented out…” the manager told reporters.

Dandong is a stopover for North Korean traders and officials travelling between North Korea and northeast China.

It is also a magnet for foreign reporters seeking information on one of the most isolated countries in the world.

This slow start to the new development there is not altogether a surprise.

Previous attempts to set up free trade zones, part of Chinese efforts to coax North Korea into economic reforms, have mostly foundered due to lack of investor interest and fears over doing business with a country under UN sanctions.

China though continues to improve infrastructure on its side of the border.

The opening of a new bridge however is said to have been delayed over North Korea’s failure to build connecting roads.

North Korea’s isolated and small economy has few links with the outside world apart from China, which has been a key partner for decades.

But ties have been strained by North Korea’s banned nuclear programme, which has triggered the UN sanctions on the North.

As relations between China and North Korea have become strained in recent years, China has grown closer to South Korea, Asia’s fourth-largest economy and the North’s main rival.

ORIGINAL POST (2015-8-25): According to Xinhua:

Authorities in northeast China’s Liaoning Province are preparing to open a border trade zone with the Democratic People’s Republic of Korea (DPRK).

After an unveiling ceremony, the Guomenwan trade zone in the city of Dandong is expected to open during the China-DPRK Economic, Trade, Cultural and Tourism Expo in October, the provincial government said on Tuesday.

The trade zone, with a total investment of 1 billion yuan (156 million U.S. dollars), has a floor area of 24,000 square meters.

Residents living within 20 km of the border will be able to exchange commodities at the marketplace with people from the DPRK and enjoy a duty-free policy if spending less than 8,000 yuan (1,250 U.S. dollars) per day.

Dandong is the key hub for trade, investment and tourism between China and the DPRK. There are more than 600 border trade enterprises in the city, and trade with the DPRK accounts for 40 percent of the city’s total trade turnover.

I have written about the new trade zone and its location in this 38 North article.

According to the Daily NK:

The number of North Koreans who visited China through legal means has dipped this year.

Data on the number of foreigners who went to China in the first half of this year indicate roughly 89,700 North Koreans crossed into the country, according to figures from China’s National Tourist Office cited by the Voice of America [VOA] on Wednesday.

This a 2.2 percent drop from the 91,800 visitors who were there during the same period last year, indicating the numbers are heading toward a two-year decline, it reported.

The figures from this report are only limited to those who visit through legal means and do not reflect illicit trips or defectors who enter the country.

Roughly 52 percent of North Koreans traveling to China reportedly went looking for jobs at restaurants or factories. The number of job-seekers inched up by 3,300 on-year, according to the VOA.

Men outweighed the number of women from the North, making up roughly 85 percent at 76,500. Only 13,200 were female visitors.

The total number of foreigners who went to China in the first six months of the year was at roughly 12.3 million. The greatest number of travelers came from South Korea at slightly over 2.1 million, while North Korea placed 20th on the list.

Read the full story here:
N. Koreans on visas to China drops
Da
Lee Dong Hyuk
2015-8-20

According to Arirang News:

It has emerged that five North Korean defectors entered the United States as refugees during the months of October and November.

A U.S. State Department report published on Monday shows the five individuals were admitted into the states of Colorado, Illinois and Utah.

Four North Korean refugees were admitted into the U.S in July.

The number of North Korean refugees allowed into the U.S. peaked in 2008 at 37 and has been on a downslide since then, recording just eight last year.

Since 2006, when North Korean nationals were first granted refugee status in the U.S., a total of one-hundred-91 have started new lives in the United States.

Read the full story here:
Five refugees from N. Korea entered U.S. in Oct. & Nov.: U.S. State Dept.
Arirang News
2015-12-8

UPDATE 7 (2016-8-18): I recently received a KOTRA report on the DPRK’s international trade in 2015. You can download the report here. Below are two images that show North Korea’s 2015 trade in relation to previous years and a second of North Korea’s top ten trading partners in 2015:

UPDATE 6 (2016-6-21): N. Korea’s economic reliance on China deepens in 2015. According to Yonhap:

North Korea’s economic reliance on China deepened last year as prolonged international sanctions and frozen economic exchanges with South Korea further jolted its moribund economy, a report showed Tuesday.

Bilateral trade between North Korea and China was estimated at US$5.71 billion in 2015, accounting for 91.3 percent of the North’s total trade, according to Hyundai Research Institute.

The amount jumped from $488 million in 2000, with the ratio more than tripling from 24.8 percent, the Seoul-based think tank said.

“North Korea’s trade is relying more on China in the wake of continued international sanctions and soured inter-Korean relations,” the institute said.

China’s share in North Korea’s exports had skyrocketed from 6.7 percent in 2000 to 92.1 percent in 2015, with the amount rising from $40 million to $2.48 billion.

Imports from China rose from $450 million in 2000 to $2.95 billion in 2015, with the reliance ratio increasing from 31.9 percent to 77.6 percent.

The share of raw materials in North Korea’s export to China rose from 37.9 percent in 2000 to 53.3 percent in 2015, while the share of raw materials in the North’s imports from China tumbled from 28 percent to 1.5 percent during the period.

Sales of mineral resources, such as iron ore and coal, were the biggest source of hard currency for the reclusive state, while Chinese electronics topped the list of imports last year, the institute said.

“North Korea have expanded imports of intermediate goods and sold them as finished goods,” said Lee Yong-hwa, a researcher at Hyundai Research Institute. “North Korea’s income level is believed to have improved as it has expanded imports of Chinese consumer goods and capital goods.”

Pyongyang’s reliance on China is expected to further rise this year as it was slapped with additional U.N. sanctions in early March following its fourth nuclear test and long range missile launch earlier this year.

The U.N. sanctions ban exports of mineral resources, including coal, iron, gold and rare earth metals, from North Korea, if the proceeds are used for its nuclear or arms program.

UPDATE 5 (2016-5-23): According to UPI:

North Korea’s trade with China shrank for the first time in six years, according to a South Korean government think tank.

According to a report from the Korea Institute for International Economic Policy, bilateral trade stood at $5.43 billion in 2015, down by 14.7 percent from 2014.

North Korea exports to China were estimated to total $2.95 billion, a decrease of 16.4 percent, and imports, excluding crude oil, were reported at $2.49 billion, a 12.6 percent decrease from 2014, local newspaper Kyunghyang Shinmun reported.

…

But the data from 2015 indicates North Korea was hit hard by a collapse in coal and iron ore prices in the commodities markets, according to the report.

North Korea iron ore initially remained competitive in the Chinese market, staying at a price that was 73 percent of market rates, but became less of a bargain in 2015 when it was priced at 84 percent of market rates, which also dropped precipitously last year.

The report stated China’s economic slowdown and new environmental policies targeting the coal industry played a role in the decline in North Korea coal and other exports, local newspaper Maeil Business reported.

In 2015, commodity prices dropped by more than 20 percent for coal and about 31 percent for iron ore.

Note that these trade data were recorded before new sanctions were implemented in 2016.

Read the full story here:
North Korea trade with China shrinks 15 percent
UPI
2016-5-23

UPDATE 4 (2016-2-1): DPRK – China trade is down. According to Yonhap:

North Korea’s trade with China dipped nearly 15 percent last year apparently due to a chilly bilateral relationship between the two neighboring countries, a report showed Sunday.

The North-China trade volume reached US$4.9 billion in the January-November period, down 14.8 percent from $5.76 billion a year earlier, marking the first double-digit on-year drop since 2000, according to a report by state-run think tank Korea Development Institute (KDI).

Pyongyang’s shipments to its neighbor sank 12.3 percent to $2.28 billion over the cited period, while imports from China plunged 16.8 percent to $2.63 billion.

The trade between the allies has risen an average of 22.4 percent between 2000 and 2014. Only in 2009 and 2014 did it shrink on-year.

The KDI report attributed the sharp decline to sluggish raw material exports, as shipments of anthracite coal and iron ore fell 6.3 percent and 68.5 percent, respectively.

“The chilly relationship between Pyongyang and Beijing and a slowdown in the Chinese economy seemed to affect North Korea’s sluggish trade with China,” said the report. “North Korean leader Kim Jong-un’s New Year message, which called for using home-made products and rejecting foreign-made ones, also had some influence on the downbeat trend.”

The alliance between Pyongyang and Beijing had been described as being “forged in blood,” since China fought alongside North Korea in the 1950-53 Korean War. China is the only country that provides crude oil to the reclusive North.

But their political relations have become strained since 2013, partly because of the North’s defiant pursuit of nuclear weapons and a series of purges of pro-Chinese officials in North Korea.

For 2016, the KDI report noted that there is a higher possibility that bilateral trade will contract further following Pyongyang’s nuclear tests on Jan. 6, as the global community including the United Nations is set to impose sanctions against the reclusive regime.

“North Korean trade will be dragged down by international economic sanctions sparked by the North’s latest nuclear test in the first half of this year,” the KDI said. ” North Korea-China trade has shrank to some extent, following sanctions by the U.N.”

Output at the Kaesong Industrial Complex is up in 2015. According to the Yonhap (via Korea Herald):

Production of companies at the inter-Korean industrial complex in North Korea exceeded $500 million last year for the first time since its opening in 2004, the government said Sunday.

According to the Unification Ministry, a total of 124 South Korean factories operating in the complex produced $515.49 million worth of goods in the first 11 months of last year, up more than 20 percent from the previous year and the highest yearly output even excluding the December tally.

The figure for the entire year is estimated to reach $560 million, given that their monthly production averaged around $50 million in the year, it said.

“The Gaeseong Industrial Complex managed to grow stably, recording more than a 20 percent increase in total output despite North Korea’s shelling in August across the border and various other incidents in and out of the country,” a ministry official said.

There were 54,763 North Korean workers and 803 South Korean managers at the factories in the industrial park located in the North’s border city of Gaeseong as of November.

Here is additional information in the JoongAng Ilbo.

Read the full story here:
N Korea’s trade with China contracts in 2015
Yonhap
Kim Boram
2016-1-31

UPDATE 3 (2016-1-12): Arirang News reports that DPRK-China Trade is off 15% in 2015 to $4.9 billion. China’s exports and imports to North Korea fell 17% and 13%. North Korea’s exports of iron ore to China fell 68%, while shipments of anthracite fell 6.3%.

UPDATE 2 (2015-8-17): Marcus Noland weighs in on the H1 2015 KDI report.

UPDATE 1 (2015-8-11): KDI reports that DPRK-China trade continues to fall in 2015. According to Yonhap:

North Korea’s trade with China plunged more than 10 percent in the first five months of 2015 due mainly to a drop in raw material prices, a report showed Tuesday.

North Korea’s outbound shipments to its neighbor sank 10.3 percent on-year to US$954 million in the January-May period, while imports plunged 14.3 percent to $1.09 billion, according to the report by the Korea Development Institute (KDI).

“Bilateral trade was down 12.5 percent compared to the year before with exports of anthracite coal and iron ore affecting overall numbers,” KDI said. “Compared to the year before, when trade fell 4.8 percent, this year’s drop is more pronounced.”

The think tank based its assessment on data provided by the International Monetary Fund, the United Nations and the Korea International Trade Association.

North Korea’s exports of coal to China declined 1.6 percent in dollar terms, with the number for iron ore nosediving 70.3 percent.

Falling exports and a subsequent drop in earnings were probably felt by Pyongyang, which will have to consider other means of generating hard currency.

Compared to 2013, when the North’s exports of coal reached its peak, this year’s numbers represent a 24.6 percent drop.

“The contraction is noteworthy because the North actually diversified the places it shipped coal to in China,” the KDI said.

In regards to iron ore, exports declined, both in terms of volume and prices, with the weakening of China’s steel industry directly impacting trade. Exports stood at 600,000 tons, down from 1.11 million tons, with the value standing at $22.96 million.

The KDI said Pyongyang’s No. 1 import item from its neighbor was filament yarn, followed by cargo trucks and petroleum products. Imports of yarn and petroleum products were down, while shipments of cargo trucks rose.

In bold above I have highlighted what appears to be bad news for North Korean coal exporters. I was surprised to see this because an earlier report by Bloomberg indicated that North Korean coal exports to China had increased by 25% this year (over 2014).  However, it is worth pointing out that the Bloomberg report focuses on the actual quantity of coal crossing the border and KDI  reports on the value of the coal crossing the border. The only way both reports can be true is if the North Koreans are again taking lower prices from the Chinese for their coal compared to their international competitors. Another explanation for the conflicting reports could arise if there was a significant difference between Chinese customs data (Bloomberg) and that used by the International Monetary Fund, the United Nations and the Korea International Trade Association (KDI). I don’t have enough experience with these data sets to know how consistent they are.

Benjamin Katzeff Silberstein offers a link to the report here (in Korean only).

Read the full story here:
N. Korea’s trade with China tumbles this year: KDI
Yonhap
2015-8-11

ORIGINAL POST (2015-4-26): Yonhap reports that DPRK – China trade has fallen in the first quarter of 2015:

Trade between North Korea and China, its economic lifeline, slipped 13.4 percent on-year in the first three months of this year amid frayed bilateral ties, data showed Sunday.

Bilateral trade volume fell to US$1.1 billion in the January-March period, compared with $1.27 billion for the same period last year, the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA) said, citing Chinese customs data.

China is North Korea’s top economic benefactor, but its political ties with Pyongyang have been strained since the North’s third nuclear test in February 2013.

No crude oil was officially sent to North Korea from China for all of last year.

China’s shipments of crude oil to North Korea were also absent during the first quarter of this year.

South Korean diplomatic sources in Beijing, however, have cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid in the past and such shipments were not recorded on paper.

Read the full story here:
N. Korea’s trade with China dips 13.4 pct in Q1
Yonhap
2015-4-26