North Korean Economy Watch

Pictured above: Tumen China (left), Namyang, DPRK (Right)

According to Xinhua:

A border city in northeast China launched Friday bicycle tours to the neighboring Democratic People’s Republic of Korea (DPRK) as tourism to the country booms.

Thirty-five Chinese tourists joined the first self-drive travel by bicycle from Tumen City, Jilin Province, to DPRK’s Namyang city, said organizers. The tourists spent three hours in the DPRK.

The bicycle tour is inexpensive and only needs simple procedures, said an official of the Tumen Tourism Bureau. He said the route is expected to attract more tourists to the DPRK.

Excursions by train from Tumen to the DPRK’s Chilbosan resumed on Wednesday. The tourist train was launched in April 2012, but was later suspended.

Tumen has highway and railway service to the DPRK.

Xinhua also posted this story which offers more context:

Tourism to the Democratic People’s Republic of Korea (DPRK) is booming in northeast China border cities on the back of multiple travel schemes aimed at boosting the regional economy.

On Friday, Zhao Xin beamed with joy as he joined the first group of cyclists from Tumen City, Jilin Province, to DPRK’s Namyang city.

Tumen, under the jurisdiction of Yanbian, a Korean autonomous prefecture in Jilin, is separated from DPRK by the Tumen River. The cross-border city is linked with DPRK by highways and railways.

Amid high spirits, Zhao, a travel agent from Yanbian, was among thirty-five Chinese tourists in the DPRK, visiting the Namyang Railway Station, Kim Il-sun’ s statue, and enjoying local delicacies in a famous downtown street during a one-day visit.

“The city is quite unique and full of energy,” Zhao told Xinhua, hoping that more DPRK cities would join the list of the travel-by-bicycle initiative so that he could enjoy more sightseeing as well as the local gastronomical culture.

For Chen Boyi, taking a train is a splendid choice to tour the neighboring country. Chen said that her excursion during the Workers’ Day holiday helped unravel some mysteries of DPRK.

“Namyang is very clean and the local people warm-hearted,” Chen, 21, said.

Excursions by train from Tumen to the DPRK’s Chilbosan resumed two days before the bicycle tour program. The tourist train was launched in April 2012, but was later suspended.

The train and bicycle tours are the latest effort to ramp up the cross-border tourism.

In April, the city of Ji’an, Jilin, launched regular tourist trains to Pyongyang, Kaesong and Panmunjom in the DPRK, making it the second city after Dandong in the neighboring Liaoning Province with such services.

In 2013, Tumen city simplified applications for non-local visitors, allowing them to enter the DPRK on the same day they arrive in Tumen.

Meanwhile, the DPRK has opened several cities for group tours from China, including Rason, Namyang, Chongjin and the Mount Kumgang.

The schemes have powered the past few years of tourism boom. About 10,000 tourists from Yanbian alone visit the DPRK annually.

With a variety of travel means, it will be more convenient to visit the DPRK, said Ji Run, a tourist who has just wrapped a visit to the country.

“I would like to come back in the future,” he said.

Yonhap also reports:

North Korea and China have simplified border-crossing procedures for Chinese tourists traveling to the North, China’s state media reported Monday, in another sign that Pyongyang is eager to boost tourism income.

The move allows Chinese people who take tours from China’s border cities in Jilin and Liaoning provinces to get a “travel pass” to North Korea within 24 hours, compared with the previous two days, the state-run China Daily reported.

The report did not elaborate when the simplified procedures took effect, but North Korea started a new one-day tour program last week by opening its border to bicycle tourists from China for the first time.

The newspaper carried a photo of Chinese tourists entering North Korea by taking bicycles from the northeastern city of Tumen in Jilin province to the North Korean border city of Onsong.

Last week, China resumed train operations on a route from Tumen to the North’s northeastern port city of Chongjin, after a year of renovation, the report said.

Zhang Weidong, an official at a Chinese travel agency responsible for the train travel, told the newspaper that more than 2,000 tourists used the train in 2012 before the renovation.

“The number is estimated to rise to 7,000 this year,” Zhang said.

The four-day train trip to North Korea costs about 1,900 yuan (US$304), the report said.

North Korea is one of the world’s most secretive and isolated nations, but since last year, Pyongyang has stepped up efforts to attract foreign tourists, including offering more international and domestic flights.

Read the full stories here:
Chinese city launches bicycle tours to DPRK
Xinhua
2014-5-2

N. Korea, China simplify border-crossing for Chinese tourists
Yonhap
2014-5-5

According to Yonhap:

North Korea increased imports of vehicles and alcoholic beverages from Hong Kong in 2013, despite an overall drop in bilateral trade, a South Korean report showed Thursday.

The trade representative office for Korea Trade-Investment Promotion Agency (KOTRA) in Hong Kong said Pyongyang spent US$4.36 million to buy vehicles, up 27.5 percent from the year before, a large number of them with over 3-liter engine and seating capacity for more than 10 people.

Cars were the second-largest single product imported by North Korea from Hong Kong after electronic components, the office said.

“The cars were made in other countries and shipped through Hong Kong,” it said.

North Korean imports of alcoholic beverages shot up 51.3 percent last year from 2012, with whiskey and vodka making up the bulk of products shipped. Though liquor products only accounted for 1.4 percent of goods shipped from the former British colony to Pyongyang, its annual growth rate surpassed that of all others last year.

This trend continued into 2014, with North Korea’s purchase of alcoholic beverages soaring 758.8 percent in January and February vis-a-vis the previous year, according to the KOTRA office.

The latest report showed that two-way trade dropped 57.2 percent on-year to $26.99 million, with Hong Kong’s exports falling 53.7 percent. It said no crude oil, grain and fertilizers were shipped to the North.

Imports from North Korea nosedived 87.9 percent to $770,000.

The report showed that in the first two months of this year, Hong Kong’s exports to North Korea was down 67.9 percent on-year, while imports fell 63 percent.

Read the full story here:
N. Korea increases car, liquor imports from Hong Kong in 2013: report
Yonhap
2014-5-1

According to Yonhap:

More than 40 European businessmen in South Korea traveled across the heavily fortified border into North Korea on Tuesday for a rare trip to an inter-Korean factory park amid tensions on the Korean Peninsula, a unification ministry official said.

A 42-member delegation of the Korean-German Chamber of Commerce and Industry in Seoul plan to tour facilities and South Korean factories in the North’s western border city of Kaesong before returning home later in the day, the official said.

The delegation includes officials of the German engineering giant Siemens AG and BMW, a premium German automaker. It also includes Swiss nationals and Austrians, according to the official.

…

Separately, about 40 South Korean business leaders from around the world also plan to visit the factory park in Kaesong on Friday, according to the unification ministry official.

In December, about two dozen officials from the world’s G-20 economies toured the Kaesong complex on the sidelines of their global financial meeting in Seoul.

The sprawling enclave in Kaesong is home to 120 small South Korean plants producing garments and other labor-intensive goods. More than 44,000 North Koreans work in the complex.

Read the full story here:
European businessmen visit inter-Korean factory park in N. Korea
Yonhap
2014-4-29

Not much specific information is available, but the DPRK has signed economic agreements with Russia’s Amur and Sakhalin Regions.

According to RIA Novosti:

North Korea’s Foreign Trade Ministry and the authorities of Russia’s Amur region in the country’s southeast have signed an economic cooperation agreement, the Yonhap news agency reports.

“An agreement on trade and economic cooperation was signed between the DPRK ministry of Foreign Trade and the Amur Regional Government of the Russian Federation,” Yonhap cited Pyongyang’s KCNA state news agency as saying Monday.

According to the Korean Central News Agency, the accord was signed Monday during the visit of Yuri Trutnev, a Russian Deputy Prime Minister and Putin’s official envoy to Russia’s Far Eastern Region.

As part of his North Korea trip, Yuri Trutnev met with the Cabinet’s Vice President Ro Tu-chol and reportedly shared his views on a broader economic cooperation between the two nations, among other issues.

The agreement between Moscow and Pyongyang is another step towards closer economic partnership in the Far Eastern region, after the Amur territory on China’s northern border signed a fraternity and trade deal with Korea’s South Pyongan province in 2011.

A similar economic cooperation agreement was signed last week between Pyongyang and the local government of Russia’s Sakhalin region.

Voice of Russia reports the following:

North Korean’s Foreign Trade Ministry and the government of Russia’s far-eastern Amur region have signed an agreement on trade and economic cooperation, the Yonhap news agency reports with reference to the Korea Central News Agency (KCNA).

The agreement was signed on Monday during a visit to Pyongyang of a Russian delegation led by Deputy Prime Minister and Presidential Plenipotentiary in the Far-Eastern Federal District Yuri Trutnev.

No further details have been immediately available.

A wide range of matters, connected with the development of political, trade-and-economic cooperation will be discussed in the Democratic People’s Republic of Korea (DPRK) by Yuri Trutnev, Russia’s Vice-Premier and Russia’s plenipotentiary presidential representative in the Far Eastern Federal District.

An official at the Russian Embassy to the DPRK said that Trutnev would arrive here by air on Monday by a special flight at the head of a Russian delegation for a three-day visit, TASS reports.

Apart from talks with DPRK officials, the Vice-Premier will attend a ceremony marking the handover of a large consignment of fire-engines to the Korean side.

The delegation will also lay flowers to the Liberation Monument here. The Monument bears an inscription “Eternal glory to the Great Soviet Army that liberated the Korean People from the yoke of Japanese militarists and opened up the road for the Korean people to freedom and independence!”.

The delegation leader will be accompanied by Primorsky Territory Governor Vladimir Miklushevsky, Khabarovsk Territory Governor Vyacheslav Shport, and Amur Region Governor Oleg Kozhemyako.

In March this year, the DPRK was visited by President Rustam Minnikhanov of the Republic of Tatarstan, as well as by Alexander Galushka, Russian Minister for the Development of the Far East. The latter attended a meeting of the Co-Chairmen of the Intergovernmental Commission for Trade-and-Economic, Scientific and Technical Cooperation between the Russian Federation and the DPRK as head of the Russian part of the Commission.

Moscow and Pyongyang actively strengthen economic contacts of late. The delegations of Russia and the DPRK attended a meeting the international “Organization for Cooperation of Railways. It is reckoned that the Organization’s main goals are to develop international freight and passenger transportation, and establish a Common Railway Transportation Space in Eurasia. This year the Organization’s conference is being attended for the first time by South Korea as well.

Tense relations between Pyongyang and Seoul are keeping on at the political level. Nevertheless, Russia is calling on the two countries to reach agreement between each other and take part in implementing the project for linking up the inter-Korean Railway and the Trans-Siberian Mainline Railway (Trans-Sib).

Railway transport is one of important areas of cooperation between Russia and the DPRK. A ceremony marking the completion of the upgrading of the railway section running from the Russian station of Khasan to the North Korean city of Rajin was held in the Republic in September last year. Work has been also completed to bring into being a general-purpose trans-shipment terminal in Rajin the principal port in the Rason trade-and-economic zone.

The upgrading of the infrastructure of the Khasan-Rajin railway leg is viewed as the pilot segment of the reconstruction of the entire Trans-Korea Railway. In prospect, when railway communication from the South Korean port of Pusan via the DPRK to Russia is established in full, an opportunity will open up to reorient to Russia’s Trans-Sib a considerable part of goods, which are currently shipped now via a trans-oceanic seaway from South Korea to Europe.

The possibility is being explored for inviting South Korean businessmen to participate in developing the railway transportation infrastructure o the DPRK, including port facilities.

Here is some comprehensive analysis by 38 North.

Here is some more analysis at the Hankoyreh.

Read the full stories here:
Russia, North Korea Strike Economic Cooperation Deal
RIA Novosti
2014-4-29

N Korea, Russia’s Amur region seal regional cooperation deal
Voice of Russia
2014-4-29

We earlier posted an article on how DPRK-China trade has fallen in the first quarter of 2014. The DPRK has apparently imported zero oil from China in the first quarter of this year.

Grain imports from China also fell.

According to Yonhap:

North Korea’s grain imports from China decreased by more than 50 percent in the first quarter from a year earlier, data showed Sunday.

According to the Korea International Trade Association (KITA), North Korea imported 26,263 tons of grain, including 23,636 tons of flour, 1,241 tons of rice and 1,192 tons of corn, from China in the January-March period.

The North’s imports during the first three months is equivalent to 48 percent of 54,178 tons imported during the same period a year ago, the data showed. Compared with the first quarter of 2012, the country’s grain imports from China decreased about 40 percent.

In terms of value, the North’s imports of Chinese grain amounted to US$11.93 million in the first quarter, down 52 percent from $24.71 last year.

“The drop in the North’s grain imports from China in the period compared with other years seems to be due to an increase in the country’s grain production last year,” said Kwon Tae-jin, a research fellow at the government-funded Korea Rural Economic Institute (KREI). “However, the country may increase its grain imports in the future, as the amount of its grain production is not enough for its people.”

The U.N. World Food Program (WFP) estimates the North produced 5.03 million tons of polished grain between November 2013 and October 2014, up 5 percent from a year ago.

Read the full story here:
N. Korea’s grain imports from China halve in Q1
Yonhap
2014-4-27

According to Yonhap:

South Korea said Friday it will extend 20 billion won (US$19.2 million) in loans to companies that have been in financial trouble for years due to the suspension of their businesses with North Korea.

The decision came four months after South Korean investors called for special low-interest loans to help ease their financial pinch following the shutdown of their businesses.

South Korea has suspended a tour program to Mount Kumgang since 2008 when a female South Korean tourist was shot dead by a North Korean soldier near the mountain resort on the North’s east coast.

Seoul’s move dealt a heavy blow to South Korean companies that invested in the North’s mountain resort, including Hyundai Asan, the inter-Korean business arm of Hyundai Group.

North Korea has since repeatedly called for the resumption of the tour program, which served as one of a few legitimate revenue sources for the cash-strapped country.

South Korean businessmen involved in projects in North Korea suffered further setbacks in 2010 when Seoul slapped sanctions on Pyongyang over the deadly sinking of a South Korean warship blamed on the North.

Under the sanctions, South Korea has suspended inter-Korean projects and banned new investment in the North, except for their joint factory park in the North’s border city of Kaesong.

The unification ministry, which handles inter-Korean affairs, said it expected the latest extension of loans to help ease financial difficulties of the companies.

South Korea has extended special loans worth 62.6 billion won ($60.1 million) to more than 230 local companies involved in cross-border projects with North Korea in recent years.

This week, the North called on South Korea to lift the sanctions imposed on Pyongyang in retaliation for the sinking in March 2010 that killed 46 South Korean sailors.

South Korea has called for, among other things, the North’s admission of its involvement in the sinking in return for lifting of the sanctions, though Pyongyang has refused to take responsibility for the deadly attack.

Read the full story here
S. Korea to extend 20 bln won to firms with ties to N. Korea
Yonhap
2014-4-25

According to Yonhap:

China has launched the second train service to North Korea, state media reported Monday, a move expected to boost travel between the two nations.

The Sunday opening of regular rail services from China’s northeastern city of Jian to the North Korean capital of Pyongyang (via Manpho) makes Jian the second city offering such service after another Chinese border city of Dandong, Xinhua news agency reported.

North Korea is one of the world’s most secretive and isolated nations, but Pyongyang has stepped up efforts to attract foreign tourists since last year by offering more international and domestic flights.

In Jian, Chinese tourists can apply for a one-day round trip, which is available once every four days, to North Korea for US$480 per person, the report said.

Zang Wanghong, director of the Jian Tourist Board, said the tour agency will begin selling the tour package to the North’s western port city of Manpo before May 1, according to the report.

According to Xinhua:

A group of 32 Chinese tourists on Sunday took a train from Ji’an City in northeast China’s Jilin Province for five-day trip to the Democratic People’s Republic of Korea (DPRK).

The opening of the train route makes Ji’an, the second city after Dandong in neighboring Liaoning Province with service to DPRK.

The train from Ji’an can take tourists to Pyongyang, Kaesong and Panmunjom in DPRK, according to Liu Jun, deputy manager of the Ji’an International Travel Agency.

Both Ji’an and Dandong face DPRK across the Yalu River. The distance between Ji’an and DPRK’s capital of Pyongyang is 400 km, while that between Dandong and Pyongyang is about 200 km.

Chinese visitors with ID cards and passports can apply for the 2,980 yuan(480 U.S. dollar) visit in Ji’an. The trip is organized every four days.

Zang Wanghong, director of the Ji’an Tourist Board, said Ji’an will open a one-day tour to Manpo, a port city on the western coast of DPRK before May 1.

Ji’an which boasts a UNESCO world heritage site of the Ancient Koguryo Kingdom hopes to develop tourism based on its own resources and its adjacency to DPRK, said Zang.

Read the full story here:
China starts 2nd rail travel service to N. Korea
Yonhap
2014-4-14

Another Chinese city opens train travel to Pyongyang
Xinhua
2014-4-13

According to Yonhap:

A total of 360 North Koreans fled their home and arrived in South Korea in the first quarter of this year, registering a slight increase from a year earlier, the unification ministry said Tuesday.

According to the data compiled by the ministry, which handles inter-Korean affairs, 153 North Koreans settled in the South in January, 111 in February and 96 in March.

The figure for the quarter was slightly higher than the 319 entrants for the same period in 2013 and the 352 people in 2012, the data showed.

“The 2014 tally was slightly higher than that of the previous two years, but it remains to be seen until the end of this year if it indicates any significant changes,” a ministry official said.

Last year, a total of 1,516 North Koreans settled in the South, up slightly from 2012 when 1,502 people crossed the border, according to ministry data. South Korea is now home to 26,124 North Koreans.

Here is additional data provided by the Choson Ilbo:

From 2006 until 2012, the annual figure stood between 2,500 and 3,000, but it fell to an annual average of about 1,500 when North Korean leader Kim Jong-un took power.

A ministry official said that the number has dropped because the regime has cracked down on defections. “It has tightened border security and is bringing defectors back to the country,” the official added.

Last year, defectors on average earned W1.41 million (US$1=W1,024) in South Korea, just 64 percent of the country’s average pay of W2.18 million. Unemployment among defectors stood at 9.7 percent, more than three times the average of 2.7 percent.

The Daily NK also reports the numbers.

Read the full stories here:
360 N. Korean defectors arrive in South in Q1
Yonhap
2014-4-8

Fewer N.Korean Defectors Reaching South
Choson Ilbo
2014-5-8

According to Yonhap:

U.S. exports to North Korea jumped nearly 20-fold in February from a year earlier, a U.S. radio report said Tuesday.

The volume of trade between the two countries reached US$1.2 million in February, compared with $62,000 a year earlier, the Voice of America (VOA) reported, citing data compiled by the U.S. Commerce Department.

The VOA said that humanitarian assistance provided by U.S. private agencies accounted for 95 percent, or $1.13 million, of the total U.S. shipment to North Korea in February.

The rest of the U.S. exports to the North included poultry, footwear and plastic products, the radio report said.

The U.S., however, imported nothing from North Korea during the cited period, it said.

Read the full story here:
U.S. exports to N. Korea jumps nearly 20-fold in Feb
Yonhap
2014-4-8

Quanhe Customs House will be the border facility for managing Chinese traffic into Rason (and further down the coast). Within the administration building on the site is a poster advertising the plans to expand the customs house to manage more traffic.

The billboard offers a conceptual image of the new facility, a map of the new location, and some informative copy (in Chinese).

Here is a Google Earth image of the proposed construction site in relation to the existing border compound:

Here is a translation of the Chinese on the sign text:

Introduction of Construction Project of Quanhe (Guanghe) Port

1. The Proposed Location
The proposed site is located in Quanhe Village, Jingxin-Zhen of Hunchun City, north side of Quanhe Road. The project covers an area of 180,000 square meters (map below).

2. Construction Project
The total investment of Quanhe Port Project is 299,331,500 RMB, and the total construction area is 16992m2. including Passenger Security Channel (5445m2), Cargo Inspection Channel (2000m2), House For Frontier Inspection (1680m2), Cargo Storehouse (2000m2), Inspection And Quarantine Site (2400m2), Dormitory Restaurant (2567m2), Garage And Boiler Room (900 m2).

Passenger Security Channel: Including each 6 channels for entry and exit, and another 4 vehicle channels for touring bus. Designed annual passenger capacity is 2 million.

Cargo Inspection Channel: Including each 4 channels for entry and exit of cargo and another 1 channel for passenger. The designed annual cargo capacity is 1.65 million tons.

3. Remaining
The existing inspection building will be used as channels for border trade and tourism after the new facilities getting into operation.

Thanks to Berhhard Seliger for the info!