North Korean Economy Watch

According to the Daily NK:

Rice prices in North Korean markets have fallen dramatically after the authorities increased levels of food distribution in major urban areas like Pyongyang and Sinuiju, part of state policy of “normalizing” public distribution. Most people are undecided about the policy, but the reality is that grain has been provided by the state both last month and into this, and this is having an effect on market grain prices.

A Pyongyang source told Daily NK on the 21st, “There was five days of distribution in the first part of last month and ten days in the last part, then a further five days at the start of this month, so rice prices fell. The authorities are saying that they are going to give ten days of distribution per month until September, then normalize it completely after that.”

Ten days of distribution at North Korea’s own mandated levels means 4.5kg for workers and a further 2kg for dependent family members.

“When they first heard about [the policy of distribution normalization] they didn’t believe it, but after getting fifteen days distribution last month and another five days this, people are wondering whether this time it could be different,” the source said. “Even last month most people said ‘this will only last for this month,’ but now they have done it this month as well the number of expectant people is rising.”

The source also revealed data on the drop in market grain prices, saying that at one point the price of rice in Pyongyang had declined from 6500-7000won/kg, the approximate price point since the start of the year, to 4500won. “Although it has since climbed back up through the 5000won barrier, it is holding steady,” she added.

However, “From the middle part of April the price started slowly rising again,” she went on, conjecturing, “If distribution is achieved next month as well then it should stay below 6000won, perhaps even staying at around 4000-5000won.”

Aware that Pyongyang is a unique case in the North Korean context, Daily NK has also been checking conditions in other parts of the country, including along the Sino-North Korean border, and has learned that there has been distribution in the North Pyongan Province city of Sinuiju, the Yangkang Province city of Hyesan, and Heoiryeong and Chongjin in North Hamkyung Province, raising the possibility, which sources have echoed, that distribution is occurring nationwide. All the areas checked by Daily NK have also seen rice prices falling sharply thanks to the state distribution.

One Sinuiju-based source explained the situation there, saying, “As far as I know, the official policy of normalizing distribution is not just for our region but all other regions, too. They recently gave us ten days of rice here, so the price in the jangmadang (market) has fallen below 5000won.”

Sources report that between April 14 and 17 the price of rice has fallen to 5400won in Hyesan, 5100won in Hoiryeong, 5200won in Chongjin, and 5000won in Saebyeol County.

A source from Chongjin explained, “On or around April 10th it was selling for 4800won, but has since gone back over 5000won. They have given distribution but exchange rates are not falling, so if distribution ceases at any point, prices will have to rise again.” The same source noted, however, that in Hyesan prices fell, but when the authorities then stopped importing rice from China, they rose again, reaching 6400won. “Rumor has it that they will allow imports again,” the source noted, “but nobody knows when so prices remain high.”

Read the full story here:
Rice Prices Fall on State Distribution
Daily NK
Kim Yong Hun
2013-4-21

UPDATE 1 (2012-8-9): The Ministry of Unification is skeptical that the story below is true.

ORIGINAL POST (2012-8-8): Three good recent posts on economic changes in the DPRK can be found here, here, and here. They describe aspects of the recently discussed 6.28 policy as well as other economic events.

On August 8, Radio Free Asia published a story (in Korean) that claimed that economic changes will be much more “radical” than the “calibrarions” established under the 6.28 policy.

Fortunately, Chris Green translated the article and sent it to me:

North, Announces Discarding of Socialist Planned Economy
Moon Sung Hwee, RFA
2012-08-08

It has emerged that North Korea has officially introduced its ‘new economic management
system’ and announced the abandonment of the planned economy and public distribution.

However, free education and healthcare will remain untouched as the authorities assert that
the ‘new economic management system’ is not the same as ‘reform and opening’.

Moon Sung Hwee in Seoul has the story.

So far only mentioned in information from domestic South Korean government sources, the
shape of North Korea’s economic reform is finally emerging. The North Korean authorities
have officially promulgated the implementation of a ‘new economic management system’
to labor organizations, people’s units and individual factory enterprises, according to inside
sources.

One such source from Yangkang [Ryanggang] Province said, “Starting on August 6th, there have been
lecture meetings in every worker’s organization, people’s unit and factory enterprise about
the ‘new economic management system’. In these meetings, they have been describing the
concrete facts about the ‘new economic management system’ and its implementation.”

According to the source, lecturers have been dispatched from the Central Party to each worker’s organization to organize the lectures on the ‘new economic management system’, and explanatory documents have been sent to the regional Party arms for dissemination in meetings in individual factory enterprises and people’s units.

The source said that the basic contents of the ‘new economic management system’ are that the state will not set the plan or say what items are to be produced; individual enterprises will produce what they wish and decide for themselves the price and by what means production is to be sold, meaning that North Korea is discarding the planned economy that has been the cornerstone of its socialist system.

Notably, production equipment and materials, fuel and energy issues are to be dealt with not by the state but through deals done between factories and coal mines, power stations etc; however, individuals may not establish their own factory enterprises and enterprise Party cadres are to still be employed and made unemployed by the Chosun Workers’ Party.

A source from North Hamkyung Province claimed, “According to the ‘new economic management system’, production, sale, income and distribution are to be decided by the factory enterprises themselves. The only ones who are to continue receiving state distribution are state administrators, educators, medical sector workers; the distribution system for everyone else is to be scrapped.”

In the agricultural sector the ‘new economic management system’ is to be introduced this autumn, with production divided 70-30 in favor of the state according to the plan and any over-fulfillment also going to the agricultural workers.

In terms of timeframe, North Korea has simply said “from now”, but the source personally understood this to mean as soon as each factory enterprise is prepared, with each facing a different situation.

This deliberate vagueness may also be related to the fact that declaring a concrete start date would have incited inflation in the jangmadang, causing widespread side effects. Therefore, the authorities have tried to minimize internal conflict and ensure smooth implementation of the plan.

Meanwhile, according to sources, the reason why lecturers emphasized the continuation of free education and health care was to point up the fact that the ‘new economic management system’ does not mean ‘reform and opening’ as suggested by the imperialist powers; rather, it means ‘our style socialist economic policy’.

The Korea Herald also reported on this story.

In the field of agriculture, the policy changes announced in this story are consistent with the announcements made in regards to the 6.28 policy.

The claim that the state is giving up its role as economic planner, however, is certainly more radical than anything that has been announced before. On the surface it seems implausible that the Kim Jong-un regime, which is doing its best to remind the people of the “good old days” under Kim Il-sung, would scrap the economic model associated with the Great Leader. Additionally, the leadership would have to manage the transition costs of leveraged party cadres and cabinet technocrats who are responsible for the creation and enforcement of economic policies. Finally, since when has Pyongyang ever voluntarily given up authority to local and regional actors?

But maybe these costs are no so large?  Maybe there are enough key North Koreans today who are happy to leave the Stalinist Kim Il-sung economy in the history books? After all, most up-and-coming cadres today will have been born after the “arduous march” and will have no first-hand memories of the Kim Il-sung era. Additionally, maybe the party cadres and bureaucrats who are responsible for economic policies are the very individuals who benefit from from the black- and grey-market activities that keep the official economy afloat? It is plausible (and I believe likely) that the black/unofficial market  in the DPRK is larger (in value terms and numbers of employees) than the official economy. If this is the case, then ending the planning bureaucracy does not necessarily mean their incomes will disappear or even shrink.

Anyway, I am not sure what to make of any of these stories and since I am not in the prediction game, that is fine with me.  As always, I look forward to seeing what the North Koreans are going to do with themselves.

According to the Daily NK:

World Food Programme reports during the month of July, North Koreans received only half the amount of recommended food, rations have been reduced down to half what they should be 300 grams per day.

Between drought and flood damage, crops have suffered and the distribution system is failing to meet the needs of the people.

Due to unrelenting poor weather condition this past July, North Korean food rations per person, already at the minimum recommended amount, were cut in half.

United Nations affiliated organization, the World Food Programme (WFP) recorded that from July 1st until the 15th, food distribution in North Korea was 370 grams per person per day, but during the second half of the month rations were reduced to a mere 300 grams, revealed a Voice of America broadcast two days ago. The World Food Programme puts the recommended amount of food per day at 600 grams minimum.

According to a North Korean based-WFP local official, rations consist of 20-30% rice and 70-80% corn. During the summer, barley, potatoes, wheat and other crops are included in the distribution.

From January until March, rations were maintained at 395 grams per person, and in April they were increased to 400 grams. In May, rations were reverted back to 395 grams and June again saw a slump, down to 380 grams per person.

The WFP attributes the decline in rations to various natural disasters, such as drought and flooding have led to extensive damage of cropland across North Korea.

The WFP estimates these ration shortages will continue to be severe until harvest time arrives in November.

The flip side of this story is that North Koreans obtain the majority of their food from private and black markets.

The Daily NK tracks rice prices in the DPRK here.

Read the full story here:
WFP Reports July Rations Cut in Half at NK
Daily NK
Kim Tae-hong
2012-8-2

According to the Daily NK:

The World Food Programme (WFP) has revealed that food distribution by the North Korean authorities in April, the month of Kim Il Sung’s centennial birthday, was on the same scale as in the month before.

According to Radio Free Asia (RFA) yesterday, WFP believes that food distribution to the North Korean people this past April was 400g per day, which is 66% of the 600g per day recommended intake.

Nana Skau, the WFP’s North Korea spokesperson explained, “The food distributed by the North Korean authorities was a mix of rice and corn, and depending on the region the mix was either at 2:8 or 3:7.”

She went on, “In April there were many celebrations including Kim Il Sung’s 100th birthday so a lot of public institutions were either closed or distribution from them went down. The reason why our 83 cases of food distribution in 22 counties was one third of the previous month’s total of 220 cases in 59 counties was also because there were many public holidays.”

Meanwhile, WFP has revealed that aid is still entering the country, announcing that “In April 98.5 tons of food arrived in North Korea and in May 2,700 tons of mostly beans and powdered milk is expected to be sent there.”

Read the full story here:
Food Distribution Unmoved by April
Daily NK
Hwang Chang Hyun
2012-05-08

Andrei Lankov writes on the history and evolution of personal income in the DPRK. According to his article in the Asia Times:

When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?

Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.

We could look first at official salaries but this is not easy since statistics on this are never published in North Korea. Nonetheless, it is known from reports of foreign visitors and sojourners that in the 1970s and 1980s, most North Koreans earned between 50 to 100 won per month, with 70 won being the average salary.

Read more below…
(more…)

Andrei Lankov writes in the Asia Times:

When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?

Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.

Read the full story below:

(more…)

According to the Daily NK:

The North Korean authorities have ordered the formation of ‘Day of the Sun Gift Preparation Committees’ at the provincial Party level and subordinate ‘Day of the Sun Gift Subcommittees’ at the city and county scale, Daily NK has learned.

A Yangkang [Ryanggang] Province source who spoke with Daily NK on the 6th explained, “The ‘Day of the Sun Gift Preparation Committee’ was formed at the start of this month by the provincial Party Committee to prepare for the Suryeong’s birthday, and groups of areas were banded together to form the ‘Day of the Sun Gift Subcommittees’.”

“There was no distribution for February 16th,” the source recalled. “Possibly because the central Party received reports of popular discontent about this and asked some searching questions of provincial cadres, now they are running around trying to get ready for April 15th holiday distribution.”

“Enterprise traders are mostly bringing in soy bean oil, soap and towels via Chinese customs. They are printing ‘Day of the Sun 100th Anniversary’ on the towels,” he added.

The formation of the committees has also reportedly had a noticeable influence on levels of public expectation of the April 15th festivities, representing as it does the first time that ‘Gift Preparation Committees’ have been formed since they disappeared without a trace in the mid 1990s.

“They are already saying that each household is going to receive a huge gift for this Day of the Sun, so people are really expecting a lot,” the source said, adding, “The rumor among jangmadang traders is that every house is going to get a DVD player made by Hana Electronics in Pyongyang.”

As the source noted, the move comes following significant public discontent at the lack of gifts on February 16th (Kim Jong Il’s birthday).

On February 21st, Daily NK reported new of that discontent, citing a Yangkang Province source as saying, “There was a flood of criticism about the total lack of holiday distribution for Gwangmyungsung Day, so they began telling every organ, enterprise and people’s unit meeting, ‘That is because we are close to the 100th anniversary of the Suryeong’s birth, and the Party is preparing big gifts for that.’”

North Korea began giving snacks, rice and other foodstuffs to the people every year on the birthdays of Kim Il Sung and Kim Jong Il, along with things like school uniforms and blankets every 5th and 10th year, in the 1970s. However, the system ceased to function in the 1990s as the country was gripped by famine and economic disintegration.

Meanwhile, sources also report that with the arrival of the early spring lean season, a time when many people on the Korean Peninsula have traditionally struggled to find sufficient sustenance, prices in the market are beginning to creep up.

According to the Yangkang Province source, “Until late last week the Yuan price was 607 won, but now it is up to 635 won. The price of rice has also gone from 3,300 won to 3,800 won.”

Read the full story here:
North Forms Party 4.15 ‘Gift Preparation Committees’
Daily NK
Lee Seok Young
2012-3-5

UPDATE 1: Luke Herman provides some additional infomration here.

ORIGINAL PSOT: January has been quite interesting for DPRK watchers as we are seeing the steps taken to establish the legitimacy of Kim Jong-un. Below I have cataloged some visible components of this process:

Kim Jong-un’s “on the spot guidance” (OSG):

Kim Jong-un began the year with a visit to Kumsusan palace to pay respects to president Kim Il-sung and leader Kim Jong-il. The political and cultural symbolism speaks for itself.

Kim Jong-un’s second guidance trip (reported on the same day) was reportedly to the Seoul Ryu Kyong Su 105 Guards Tank Division. This visit is symbolically important because it was on a guidance trip to this very same division that (according to the North Korean narrative) Kim Jong-il began his “Songun” (Military First) leadership.  According to KCNA (2010-8-24):

An oath-taking meeting of servicepersons of the three services of the Korean People’s Army took place at the Ssangun-ri Revolutionary Site in Sukchon County, South Phyongan Province, on Tuesday on the occasion of the 50th anniversary of Supreme Commander Kim Jong Il’s start of the Songun revolutionary leadership.

The reporter and speakers at the meeting recalled that Kim Jong Il started the Songun revolutionary leadership by providing field guidance, together with President Kim Il Sung, to the Seoul Ryu Kyong Su 105 Guards Tank Division of the KPA on August 25, Juche 49 (1960) stationed in Ssangun-ri.

Here is a satellite image (Google Earth) of the Ssangun-ri Revolutionary Site (쌍운리 혁명사적지,  39°25’3.20″N, 125°44’30.74″E):

Joseph Bermudez wrote more about the Seoul Ryu Kyong Su 105 Guards Tank Division here. Kim Jong-il last visited the unit on 2010-12-31.

The remainder of Kim’s guidance trips in January have been overwhelmingly military in nature:

KPA Air Force Unit 1017
Concert Given by Military Band of KPA
Flight Training of KPA Air Force Unit 378
Demonstration by Players of Western Area Aviation Club (KPA)
Mangyongdae Revolutionary School (KPA)
Lunar New Year Reception
Machine Plant managed by Ho Chol Yong (KPA)
Kim Jong Un Inspects Command of KPA Large Combined Unit 671
Kim Jong Un Inspects KPA Air Force Unit 354
Kim Jong Un Inspects KPA Unit 3870
KPA Unit 169 honored with the title of the O Jung Hup-led Seventh Regiment
Music and dance performace
Hero Street Meat Shop
Pyongyang Folk Village (KPA)
2012 New Year’s concert “The Cause of the Sun Will Be Immortal” given by the Unhasu Orchestra
Seoul Ryu Kyong Su 105 Guards Tank Division
Tribute to Kim Il-sung and Kim Jong-il at (Kamsusan)

The media/propaganda campaign:

1. On Kim Jong-un’s birthday, KCTV ran a much-written-about, hour-long documentary titled, Inheriting the Great Achievement of the Military First Revolution of (Mount) Baekdu, which highlights Kim Jong-un’s bona fides as a great military strategist (see full video here). It also allegedly mentions Jong-un’s mother, though not by name, who was born in Japan.

At this point I don’t have much to add on the film except a translation of Kim Jong-un’s quote in the film, which may be his first official one, provided by C. La Shure in the Korean Studies Digest:

“I am accustomed to working through the night and so am not bothered by it. The most joyous and happiest moments for me are when I can bring joy to the comrade supreme commander. Thus, though I have stayed up several nights, I have worked without knowing weariness. Even when I work through several nights, once I have brought joy to the comrade supreme commander, the weariness vanishes and a new strength courses through my whole body. This must be what revolutionaries live for.”

2. Kim Jong-un’s “motherly” or “nurturing” traits have also been emphasized — imitating not only Kim il-sung’s appearance but also his public mannerisms (a la Bryan Myers):

Pictured above:  (Top) The cover of B.R. Myers’ book, The Cleanest Race. (Bottom) Kim Jong-un’s visits to KPA Unit 354 (L) and the Mangyongdae Revolutionary School (R)

3. Kim Jong-un has issued several autographs which look remarkably like his father’s (and grandfather’s):

Pictured above: (L) Kim Jong-il’s signature taken from North Korean television. (R) Kim Jong-un’s signature as reported by KCNA on 2012-1-3. The Choson Ilbo also picked up on this.

4. The KCNA web page now has a special content filter built specifically to highlight Kim Jong-un’s activities.  They have also started printing his name in a larger type.

5. Kim Jong-un is now part of the DPRK’s infamous criticism sessions. According to the Daily NK:

“The Central Party is propagandizing the greatness of Kim Jong Eun through criticism sessions, and coming down hard on anybody who is reported to have said anything hinting at any doubt of his greatness,” the source said, adding, “all cadres are being careful not to get caught out by this, without exception.”

6. Kim Jong-un  is being called “father” in the official media.  According to the Daily NK:

Choson Central News Agency (KCNA) on the 25th reported that Kim Jong Eun made a visit to the Mangyondae Revolutionary School. During his visit, Kim Jong Eun was greeted by staff and students as “Dear Father,” a designation stressing loyalty.

Rodong Shinmun, a day before, ran an article entitled ‘The sun shines forever’. It stated “our people broken hearted at the loss of our nation’s Father (Kim Jong Il ) and out of love our father (Kim Jong Eun) warmly welcomed the return of our people from overseas.” This statement showed that Kim Jong Eun has succeeded being called ‘father’ following Kim Jong Il.

The newspaper went on to praise Kim Jong Eun, “our people are all one in our father and persist with single-minded unity and great heart.”

7. The Lunar New Year holiday was co-opted to celebrate the rise of Kim Jong-un. In addition to public ceremonies and performances in honor of one of the three leaders (Kim Il-sung, Kim Jong-il and Kim Jong-un), the practice of distributing holiday rations in the name of the leader was resumed. In a sign of the “back to the future” economic policies which may be on the horizon, the DPRK is rumored to be interested in reviving nation-wide food distribution through the PDS.

8. KCNA announced an amnesty for convicts. Details were scarce.

Institute for Far Eastern Studies (IFES)
2012-1-25

A month into Kim Jong-un’s ascension to power, it is reported that food distribution is likely to resume nationwide in North Korea.

Many experts evaluate this as a symbolic measure to propagate the construction of a powerful economy and improve the lives of the people. For the North Koreans, the most apparent and obvious economic accomplishment is the improvement of the food situation. Thus, North Korea is most likely to take action to normalize food rations as its top priority.

According to a statement made by a South Korean government official on January 20, “Kim Jong-un and his leadership will begin the food distribution as a way to prove to its people about changes forthcoming in the new regime.”He also added, “After years of propagation for the building of a strong and prosperous nation, they must demonstrate it to the people with noticeable results.”

The amount of rations to be provided is still unclear. However, the source emphasized that it was very likely for rice rations to resume, especially with the approaching national holidays, such as the Lunar New Year and Kim Jong-il’s birthday (February 16).

He also commented that “the food distribution will be a nationwide movement and the food ration system will go into effect based on the distribution network of available food supply.”

According to the Food and Agricultural Organization (FAO) and the World Food Programme (WFP), North Korea’s food production in 2011 compared to the previous year rose by 8.5 percent, sitting at about 5.48 million tons (of rough grains or 4.66 million tons of milled grains).

The minimum amount of food consumption in North Korea is 5.4 million tons, but a shortage of about 400,000 tons is expected, including the international food aid and industrial food imports. Among the recent years, this marks the largest deficiency in food supply.

However, such shortages can be overcome with additional food imports and distributing mainly rice reserves.

The last national food distribution in North Korea was in 2005, seven years ago.

North Korea is also likely to exert more effort in food processing production to improve the distribution of daily necessities. With relatively little dependence on raw material imports, North Korea is planning to improve the food situation through expanding the food processing production in agricultural, fishery, and livestock industries, with less competition with Chinese products.

KCNA reported that North Koreans celebrated the lunar new year by paying tribute to Kim Jong-il:

On the lunar New Year’s Day, the Korean people are ardently yearning for the leader Kim Jong Il.
People are seen laying flowers or floral baskets before portraits of smiling Kim Jong Il displayed throughout the country, recollecting the undying feats he performed for the country and the people.
An old man, Ri Thaek Ju, living in Sosong District, Pyongyang, told KCNA, “I don’t think the leader left his people. He is among the people. He is greeting the Lunar New Year with us.”

They also laid floral baskets at Kim Il-sung statues (video here):

Floral baskets were placed before the statues of President Kim Il Sung in different parts of the country on the lunar New Year 2012.
Service personnel and Pyongyangites from all walks of life and school youth and children and overseas compatriots staying in the socialist homeland, visited his statue on Ryongnam Hill to pay tribute to him.

…And they also performed plays offering well wishes to Kim Jong-un:

Schoolchildren’s performance “Country of Eternal Sun” took place at the Mangyongdae School Children’s Palace Monday on the lunar New Year 2012.
The performance began with prelude “Please accept, the dear respected Kim Jong Un, our greetings on lunar New Year.”
The performers made a deep bow to Kim Jong Un, representing the unanimous best wishes of the younger generation of the DPRK.

So there are “three generations” of post-revolution North Koreans, and each one now has their own leader to pay homage to on Lunar New Year. Interestingly, Lunar New Year was banned by the DPRK until the 1980s as it was classified as a Chinese holiday. But why ban a cultural holiday when you can co-opt it for political purposes?

The AP also published this story.

Read more about holidays in the DPRK here.

UPDATE 1: On January 24, KCNA reported that Kim Jong-un hosted a banquet for senior members of the North Korean government.

UPDATE 2: On January 25, the Daily NK reported some very interesting information from within the DPRK which further shows how the Lunar New Year has been co-opted as a tool for the legitimization of Kim Jong-un’s rule:

A Chinese trader who resides in Pyeongseong, North Korea, arrived in Dandong on January 21 for the start of the Lunar New Year holiday period. The trader, who in this article we will call ‘John’, received permission to visit China after waiting over a month to leave the country since the death of Kim Jong Il. John met with his suppliers in Dandong to order items he would take back into North Korea, before departing for Shenyang to visit relatives.

Daily NK met with John in Shenyang on January 22 to ask him whether or not the rations announced by North Korean authorities had actually been distributed as planned. As he is a Chinese expatriate, he says he did not receive any rations this time, however “ordinary people did get them. The rations were half white rice and half mixed-grain rice.”

“Even within Pyeongseong, people got different rations depending on what street or neighborhood they live in – some got 3 days worth, others got 5. Our People’s Unit gave 3 days. But that wasn’t the problem; in one area people got grain rice mixed with corn, and the really unlucky amongst them were disappointed to find that their rations had already gone off.”

“On the way here I also heard from people living in Sinuiju who were given corn soup rather than rice of any sort,” John says. Given that corn soup costs roughly half as much to provide as other grain rations, evidently the government distributed corn-based rations in some cities and counties in order to help carry out its plan.

According to John, authorities also offered to supply fish to citizens. “They handed out coupons to buy a sailfin sandfish for 2,800 won and called this an order from Kim Jong Eun.” With this coupon citizens could head to a government-run store and purchase the fish for 2,800 won, however John says that most people declined to buy from the government-run stores when fresh sandfish could be bought from the market for 3,300 won.

Regarding crackdowns on foreign currency, John said that “It would be hard for people like me to live if the government stopped people using the Yuan. When I purchase stock I have to pay for it in Yuan, so if I wasn’t able to do that I wouldn’t be able to trade. That might end up being the case again. The ‘gruppas’ (inspection teams) are showing up to carry out crackdowns on illegal foreign exchange transactions, but this has just driven most people to do it in the privacy of their own houses.”

“Even people who lose their foreign currency in the crackdowns can get it back with a bribe. How can you stop that? Even cadres like foreign currency, so how can it work if they order a crackdown?”