North Korean Economy Watch

According ot the Korea Herald:

The price of rice in North Korea has soared nearly 40-fold in the year after the country’s botched currency reform.

Rice is now traded at around 900 North Korean won per kilogram in Pyongyang’s markets, according to online media outlet Daily NK. This is up 3,990 percent from 22 won late November last year in the newly introduced currency.

The North knocked two zeros off the face value of its old currency on Nov. 30 last year, exchanging 100-won bills for new 1-won notes. Therefore the price of a kilogram of rice, which was 2,200 won in the old currency, was redenominated to 22 won.

Under the currency reform plan, a 100-won note in the new currency should have the exchangeable value of a 10,000-won bill in the old currency. However, due to 4,000 percent inflation, the new 100-won note is now only worth 250 won in the old currency.

The price of rice in North Korea is deemed the benchmark of all prices in commercial trade.

“The apparent purpose of the North Korean currency reform was to reduce the amount of money in the markets to stabilize prices, but it failed to achieve this due to an absolute lack of commodity supplies,” said Cho Myung-chul, a senior fellow at the Korea Institute for International Economic Policy.

“The fact that rice prices jumped 4,000 percent based on the currency’s exchangeable value shows that the effect of the 100-fold revaluation has mostly disappeared.”

After major markets in the reclusive state were shut down in mid-January this year, rice prices in Pyongyang soared, hitting 1,300 won per kilo in early March. They dropped to the 400-won range in May as markets began to function again, but soared over the 1,000-won mark in August due to an exchange rate hike and damage caused by heavy rains.

When the North redenominated its currency, it placed a cap on the amount of money that could be converted per person, telling people to deposit the rest in state-run banks.

The measure, which was aimed at crippling the growing merchant class and reasserting control over market activities, tightened the distribution of food and stirred anti-regime sentiment.

This Daily NK story asserts that the average salary of a general worker is around 1,500 won a month, and it is not paid regularly.

Read the full story here:
N.K. rice price soars nearly 40-fold in a year
Korea Herald
Kim So-hyun
11/20/2010

As the focal point of DPRK-PRC trade, Dandong has seen phenomenal growth in the last 5 years.

Here is just one area in southern Dandong:

Here is a separate area in northern Dandong where Yalu River high-rise development is underway:

And here is another island in the Yalu River:

Dandong has been the focus of increasing media attention over the last 10 years because it has economically benefitted from increased trade (and expected future trade) between the PRC and DPRK.  

Today it is probably the easiest place to collect “survey data” on the DPRK’s business environment. According to a recent article in the Associated Press (via San Francisco Examiner), the DPRK still has a long way to go before foreign investors will see a climate ripe for investment:

Just across the Yalu River from North Korea, this sleepy border town in China’s Rust Belt is booming.

Towering apartment blocks are going up on the city’s western edge near the new Friendship Road Bridge, which will soon be the second bridge connecting Dandong to the North Korean city of Sinuiju.

Offices for trade and export-import companies dot the main road along the riverfront. A new airport is being built. Shops sell North Korean liquor, blueberry wine, ginseng, stamps and music CDs. And North Korean restaurants offer popular Korean dishes such as stewed dog leg and spicy deep-fried dog.

Dandong – like other parts of northeastern China along the 870-mile border – aims to profit from China and North Korea’s growing cross-border trade, now close to $3 billion a year. At a time when the United States and its allies are looking to isolate the Pyongyang regime for its nuclear program and erratic behavior, including this week’s artillery attack on a South Korean island, this hardscrabble part of China is finding that being North Korea’s back door to the world can be a lucrative business.

China already provides an estimated 90 percent of North Korea’s energy needs and most of its food and weapons. And the most recent gauge of trade between the two countries, from 2008, showed an increase of more than 40 percent from the previous year, according to the Council on Foreign Relations.

But even as officials map out grand plans for more cooperation, merchants and small-scale traders say doing business with North Korea remains problematic at best.

The government is unpredictable, they say, and rules change without warning. They tell horror stories about Chinese traders who have lost millions of dollars in goods or equipment that is expropriated or stolen outright. Many now insist on cash-up-front transactions and mostly conduct business on the Chinese side of the border, where they say they have more protections.

Moreover, while North Korean leaders have visited this part of China and professed admiration for China’s economic boom, local Chinese traders and businessmen in close contact with North Koreans say they don’t expect the country to shift to a market economy anytime soon.

“I haven’t seen any sign the North Korean government wants to open up,” said Cui Weitao, 47, who has been trading fruit, clothing, plastic bowls and chopsticks to North Korea for the past decade. “If they really wanted, they could learn from China and Russia. If they wanted, they could let people go back and forth and trade freely. . . . If they opened the border, their whole country would benefit.”

His friend, Wang Tiansheng, 47, another small-scale trader, agreed. “The thought of economic reform has been there for years but never happens. Not while the father is alive,” he said, referring to the country’s leader, Kim Jong Il. “Maybe when the son takes office.”

China and North Korea have been close allies since Chinese troops crossed the Yalu River to help North Korea fight American and South Korean troops during the Korean War, which is referred to here as the “War to Resist U.S. Aggression and Aid Korea.”

Yet Chinese leaders themselves consider North Korea’s leader an often-troublesome ally because of his brinkmanship with the United States over his country’s nuclear capability and incidents such as this week’s artillery barrage of Yeonpyeong Island, which killed two South Korean marines and two civilians, and the sinking of a South Korean warship in March.

Chinese leaders are reported to be concerned about North Korea’s economic crisis, and they encouraged Kim to embrace market-based economic reforms when he visited China in May and August this year and met with Chinese President Hu Jintao, according to some Hong Kong and South Korean media reports of the visits.

In a bow to reforms, North Korea sent a dozen mayors and provincial chiefs to northeastern China in October to visit factories and chemical plants. Earlier this month, North Korean Premier Choe Yong Rim visited Harbin, in Heilongjiang province, to discuss joint economic projects.

North Korea agreed to lease two Yalu River islands to China to develop into “free trade zones.” Chinese high-tech companies were encouraged to signed agreements to hire North Korean computer experts. In September, after Kim’s second visit, China established a new 100,000-square-foot marketplace in Tumen – across from Namyang in North Korea – for North Koreans to come on one-day passes to sell or trade their goods.

But the Tumen market in many ways illustrates the difficulties of coaxing North Korea to open up. The vast market is now mostly empty because the North Korean government changed its mind about allowing its citizens to come to China to trade freely, Tumen residents said.

One of the few Chinese vendors in the market during a recent visit, who was selling North Korean crab, shrimp and frozen fish, said he lost a lot of money because his North Korean supplier increased prices without warning.

“It’s been really hard and risky to do business with North Korea, firstly because of the complicated procedures of going there,” the seafood vendor said, speaking on the condition of anonymity. He said Chinese traders need an invitation from a state-owned company and three stamps from three departments.

Once inside North Korea, he said, officials “are very greedy. They asked us for digital cameras or DVD players or even computers. We have to buy them dinner, and booze is a must for every time we meet.”

Even the new Friendship Road Bridge being constructed – to augment the existing single-lane bridge – has been difficult to negotiate. China agreed to foot the bill for building the bridge, more than $200 million. But then North Korea demanded China also build a five-star hotel and other infrastructure on the North Korean side, local businessmen said.

Economists said the experience of the local traders confirms their own research: that while North Korean officials publicly claim to want to pursue economic reform, and may speak of emulating China’s success, North Korea’s ruling elite remains deeply ambivalent about anything that might dilute its grip.

“The state has never been comfortable with the market,” said Marcus Noland, senior researcher with the Peterson Institute for International Economics in Washington, who surveyed 300 Chinese companies operating in North Korea. “They see the market potentially as an alternative path to wealth and prestige, and perhaps political power.”

While trying to “deepen their economic integration with China” at the official level, Noland said, North Korean leaders at the same time take steps “to eradicate this kind of normal trading activity at the border” by denying visas and constantly changing the regulations.

“The Chinese do not trust the North Koreans at all,” Noland said.

According to a recent story in the Wall Street Journal, the second DPRK-PRC bridge in Dandong is still tentative:

Construction of the new bridge was originally slated to start in August. Zhao Liansheng, Dandong’s mayor, said in March that building would start in October, and be finished within three years.

“The new bridge is still waiting for the approval of central government,” said an official from the Dandong Transportation Department. “As far as I know, this project is not definite yet.”

I am not sure of the exact location of the new bridge.  If any readers are aware, please let me know.

Read the full stories here:
In Chinese Border Town, Trade With North Korea Can Be Lucrative but Problematic (Dandong, China).
Associated Press (via San Francisco Examiner)
Keith B. Richburg
11/26/2010

Border Bridge Reflects Dilemma
Wall Street Journal
Jeremy Page
11/28/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-22-1
11/22/2010

The Chosun Sinbo reported on November 15 that North Korea has erected hundreds of cellular signal towers throughout the country, providing phone service to every province, city, and town in North Korea. According to the report, the expansion of the North’s 3G network has really taken off in 2010, and the number of subscribers within the country has grown 2.5 times in the latter half of the year, as has the available coverage area.

This initiative has focused on setting up hundreds of cell towers near major highways, cities, and industries important to economic advancement. It was also reported that industry insiders had revealed that not only towns, cities, and provinces were targeted for the expansion of cellular service, but that there was a plan to erect towers in the back country, as well, and that authorities aimed to extend service to every village in the country by next year.

To this end, the Chosun Sinbo reported, the Pyongyang-based DPRK-PRC JV Checom Joint Venture Company has set up a “flow manufacturing process and is producing hundreds of high-performance cellular phones each day” and, “Related sectors are testing new devices and actively working on a project aimed at modifying the operating software to suit the needs of North Koreans.”

The paper also reported that North Korea’s academics and scientists collaborated to develop such a system in a short time, and that the system was also integrated into the nation’s Intranet. This system is different from the previous configuration in that videos, recordings, and text messages can be sent both ways, so that the system better supports an exchange of information rather than merely a transfer.

The paper emphasized that by providing distance education service to every local academic office, city and town library, and science and educational facility, the North has enacted a state-of-the-art, nationwide education system. In addition, by providing the infrastructure for real-time interactive lectures, workers and children in every region of the country can easily pursue their education by actively participating in a wide range of lectures.

According to the Choson Ilbo:

The North Korean regime is enacting sweeping changes to the law to bolster state control. A source familiar with North Korean affairs on Tuesday said four North Korean laws covering economic planning were revised in April and laws governing management of Pyongyang were revised in March.

The revised laws, which the source claims to have seen, “show the central regime’s intention to control everything, from the economy to the daily lives of the people.” North Korea has changed or enacted at least 17 different laws since November last year, just before a botched currency reform.

The revised economic planning law deletes a phrase in Article 17, which stipulated that the economy is planned “in line with methods that are presented from lower levels.” According to the source, the regime inserted the phrase when it announced timid economic reforms in July 2001 in order to give more authority over production to individual factories and businesses. “The deletion of the phrase demonstrates the intention to retrieve that authority,” the source said.

Instead, the terms “provisional figures” and “control figures” were revived after their omission in 2001. “The term ‘provisional figures’ refers to the potential output each factory sets, while ‘control figures’ represent the actual output amount assessed by the central government,” the source said. “So the terms strengthen the centralized economic planning regulations of the past.”

In Article 27, a new clause was inserted which reads, “The planning of the people’s economy is a legal task.” The source said, “This means that the partial freedom given to individual factories over production has now been taken away completely.”

The law on the management of Pyongyang, which was revised on March 30, also stresses the role of the state. Originally, maintenance and management of the capital were up to the Pyongyang City People’s Committee. But under the revision it falls into the hands of the State Planning Committee and the Cabinet. Also, all Pyongyang residents over the age of 17 have been ordered to carry their resident identification cards at all times.

Also added were articles that bind the central government to guarantee housing and the supply of necessities for the residents of Pyongyang. This shows the clear intention of the regime to take charge of housing and goods supply. “Labor and commercial laws also contain clear intentions to bolster government control,” the source said.

Kim Yong-hyun of Dongguk University, said as conditions worsened after the failed currency reform and North Korean leader Kim Jong-il’s son has been lined up to succeed his father, “the regime seems to feel that tighter internal control is better than aggressive reform. Even if North Korea is looking to partially open up through economic cooperation with China, this will be difficult to achieve with such a conservative approach.”

The Donga Ilbo also covered the story.

Read the full story here:
N.Korea Reverts to Hardline State Control
Choson Ilbo
11/17/2010

Here is the text from the MacArthur Foundation:

North Korean Contingency and Prospects of China’s Military Intervention (PDF)
Park Changhee considers whether China would intervene with its military in the event of breakdown. A number of contingencies could occur in North Korea which could pose a direct threat to Chinese security and, Park argues, the prospect that the reunification of North and South Korea could result in a unified Korea as a U.S. ally means that China’s security is at stake even without direct threats in the form of refugee flows or instability among China’s Korean community. He concludes that given what is at stake on the peninsula for China, South Korea should expect and plan for Chinese involvement in a regime crisis in North Korea.

A Review of the Legacies associated with a Sudden Change in North Korea (PDF)
Shin Beomchul reviews legal issues surrounding regime collapse and reunification. Regime breakdown and reunification pose challenges in light of international law and South Korean domestic law. The latter especially could be problematic as South Korea will have to determine how to integrate the civil, criminal, and public legal codes of the two countries, and could also have to draft and enact a new constitution.

The Economic Impacts of a North Korean Collapse (PDF)
Deok Ryong Yoon considers the economic consequences of regime collapse. Regime collapse followed by rapid reunification could shock South Korea’s economy in the short term, producing a capital outflow, devaluation of the won, and asset market crashes. Over the longer term, South Korea will have to manage the unification of labor markets and currencies, and will have to cope with the potentially steep administrative costs of national reunification.

Here is a link to the Ilmin International Relations Institute (IIRI) which produced the papers.

According to the Donga Ilbo:

North Korea has re-frozen and re-seized South Korean facilities at the Mount Kumgang resort that were reopened in the latest reunions of inter-Korean separated families.

An official at the South Korean Unification Ministry said Sunday that the North attached “frozen” labels on dining and container-type lodging facilities and a vehicle maintenance plant at the resort owned by Hyundai Asan Corp. of South Korea.

Pyongyang will also likely attach “seized” labels on a family reunion center owned by the South Korean government where the reunions took place.

You can read about the family reunions here.

Read the full story here:
NK Re-freezes S. Korean Facilities at Mount Kumgang
Donga Ilbo
11/15/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-13-1
11/13/2010

The construction cost for six inter-Korean cooperative industrial parks like the Kaesong Industrial Complex would carry a construction bill of 44 billion Won. According to “Analysis of Examples of Inter-Korean Cooperation in the Construction Field and the Direction of Industrial Park Development within North Korea,” a recent report by the Construction Economy Research Institute of Korea, “Promotion of the North Korean construction market by the [South Korean] construction industry would not only increase the limited demand for the South Korean construction [field], but will also provide new growth to our economy.”

According to the report, there has been almost no cooperative construction project within the construction field since 1988. On the other hand, tourism, industrial parks, physical fitness and religious projects have provided opportunities for construction companies. These projects generally call for construction equipment, materials, technicians and designs from South Korea, and land, labor, aggregate, etc. from the North. If six industrial parks on the same scale as the KIC were to be built, it would cost 43.09 billion Won. Of this, 4.07 billion won would cover government costs, while the actual cost of construction would be 39.02 billion won.

If the KIC, currently undergoing the first phase of construction, were to complete all three phases of the original plan, the 19.9 square-kilometer complex would house 2,000 businesses. The research institute calls for the completion of phases 2 and 3 in the KIC, as well as the construction of industrial parks at Rajin-Sonbong, Sinuiju, Haeju, Nampo, and Wonsan.

Rajin-Sonbong and Sinuiju are both ‘Free Economic Trade Zones’, and as special administrative zones, they offer large-scale industrial plots in an effort to attract foreign capital. In addition, it was agreed at the second inter-Korean summit, in October 2007, that Haeju would be developed. Furthermore, a light-industrial complex in Nampo, on the West Sea, and a heavy and chemical industry in Wonsan have been established.

The industrial zones, however, constitute only part of the construction demand. Roads and rails connecting the complexes, port facilities, power generation plants, cities to support production workers, and other derivative projects would also need to be constructed. In other words, the building of an industrial zone would lead to significant peripheral construction demand, as well.

Assuming that inter-Korean tensions were eased and North Korea decided to open itself up to the South, if construction on the six industrial zones could begin by the middle of next year, it is expected that they could all be completed by 2021. In addition, the construction and operation of the six zones could provide the impetus for quickly improving the North Korean economy, while also boosting the importance of South Korea to the North’s economy.

In order to see this accomplished, the research institute found that the government needs to boost activity in the KIC; expand the distribution network between the KIC, Kimpo, and Kangwa; guarantee free management authority in the KIC; iron out customs and transportation procedures; ensure a steady supply of North Korean laborers; and strengthen the ties between the KIC and North Korea’s domestic economy.

If, in the future, North Korea is to open its doors to cooperation, it is expected that foreign companies will also participate. Therefore, when considering long-term profits, it is necessary to spur interest in North Korea’s construction market. The research institute suggested that it was also necessary to construct a training center to teach North Korean construction workers the technical skills needed to ensure maximum potential.

According to the Daily NK:

A number of criminals judged to have committed their crimes due to poverty were granted an amnesty in commemoration of the 65th anniversary of the Workers’ Party founding in September, in a move characterized as being a result of Kim Jong Eun’s boundless consideration for the North Korean people. However, this has led to serious adverse effects.

A Daily NK source reported on the 12th that, upon a decision of the Standing Committee of the Supreme People’s Assembly, the North Korean authorities reduced the prison terms of around 150,000 criminals across the country in the amnesty, entitled “On the reduction of prison terms for prisoners in commemoration of the 65th anniversary of the Party founding and the Party Delegates’ Conference.”

For example, around 1,500 out of 2,100 prisoners in No. 12 Reeducation Camp under the Reform Department of the People’s Safety Ministry in Pungsan-ri, formerly Jeongeo-ri, Hoiryeong, North Hamkyung Province had their sentences reduced.

According to the source, “Around 250 prisoners were released and three special contributors had their sentences reduced by four years, 20 model prisoners by three years, and around 1,500 other general prisoners by two years.”

He added, “Only violent offenders (robbers, murderers and rapists) sentenced under article 141 of the Penal Code and human trafficking offenders (defector-related offences) under article 117 of the Penal Code were excluded.”

After the head of the camp announced the list of prisoners who would benefit, he reportedly added, “Those who are being released and having their sentences reduced should feel deeply the consideration of the Youth Captain,” going on to say, “The consideration given by the Party is not a gift sent equally to everybody, but only to those who have done well, and gives more consideration to them.”

Generally, amnesties in North Korea are undertaken on every fifth birthday of Kim Il Sung and Kim Jong Il and the founding day of the Party, ratified by Kim Jong Il after the Standing Committee of the SPA submits a proposal to him. The 12 reeducation camps under the PSM then decide the scale of the amnesty, depending on the size of the prison population.

However, the amnesties can have undesirable consequences, and this one is no different; the PSM has been reportedly devoting itself to filling up the empty camps, because each camp contains production units.

The source said, “The PSM was concentrating on criminal investigations even before the official announcement of the amnesty, because they had received indications of the decree. With the help of the Prosecutors’ Office, they caught a lot of people and kept them in detention centers, then after the announcement they started putting them in camps.”

“In 2002, commemorating the 60th birthday of the General (Kim Jong Il), although around 30 percent of the prisoners in each camp were released, the same amount of prisoners filled the former prisoners’ places.”

The 12 reeducation camps in North Korea each have unique production facilities. In the No. 12 Camp in Hoiryeong, for example, there is a wooden goods factory, copper mine, dressing plant, limestone mine and farms. Defectors suggest that the profits from these factories cover 80% of the management costs of the PSM.

The camps can be found all over the country including Pyongyang, Kaechoen and Sariwon in South Pyongan Province, Deokwon in Kangwon Province, Hamheung and Hoiryeong.

Read the full story here:
Kim Jong Eun’s “Magnanimous” Amnesty
Daily NK
Im Jeong Jin
11/13/2010

Click image to see all the prices

According to the Daily NK:

Winter is a tough time for average North Koreans, with a number of demanding economic issues to deal with. This year, as the traditional season for making “kimchi”, the indispensible side dish on any Korean dining table, approaches, ingredient prices in the market are become a focus for concern.

This is only the second winter since the currency redenomination of November 30th, 2009. Since then, prices have fluctuated unpredictably throughout the year due to various economic and political uncertainties. As a result, the overall situation now is not radically different from the period of high prices before the redenomination.

According to one inside source from North Hamkyung Province who spoke with The Daily NK on November 9th, “Wealthy people will have already finished preparations for heating and kimchi by the end of October; however, those belonging to underprivileged groups have not even prepared the kimchi for winter yet.”

According to the source, Chinese cabbage, the core constituent of the most popular form of kimchi, was being sold for as much as 100 won/kg and white radish for 60 won/kg in the market in Hoiryeong in North Hamkyung Province in recent days. The core seasonings for many forms of kimchi, garlic and dried red chili pepper powder, were being sold for 3,800 and 4000 won/kg respectively.

On October 25th, 2009, shortly before the currency redenomination, Chinese cabbage was being sold for 200 won, white radish for 150 won, garlic for 3,000 won and dried red pepper powder for 7,000 won in the same market. Thus, many of the effects of the currency redenomination appear to have been disguised by price inflation.

For a family of four, 500kg of Chinese cabbage and 300kg of white radish is needed to see them through the winter. To meet that requirement in full would, at current prices, require 50,000 won for cabbage and 18,000 won for white radish. Add in the price of the seasonings, including salt and green onion in addition to garlic and red pepper powder, and the total price is close to 100,000 won.

Other aspects of winter life are no less problematic. Heating is one example. For a household burning coal, a couple of tons are burnt between November and March. Currently, the price of coal in Hoiryeong market is around 20,000 won per ton. Meanwhile, houses which are heated with wood need roughly enough to fill two ‘Seungli-58’ trucks, or approximately five tons. Such a quantity costs 50,000~60,000 won (7,000 won/cart in Hoiryeong) at the current market price.

Another key factor in a comfortable winter is vinyl for shielding houses against the winter wind. This is now selling for 400 won/m. Most North Korean houses have three windows, to which people living in North Hamkyung and Yangkang Province apply two layers of vinyl, meaning that each household needs ten meters on average, including that to cover the door.

Therefore, taking Hoiryeong market as the average, people need a minimum of 150,000 won to prepare for the winter. When the average North Korean worker’s salary is between 1,500~3,000 won, it is clearly very hard for most to endure the winter in comfort.

According to the source, “The conditions in a household are revealed by the amount of dried red pepper powder in their winter kimchi. An affluent family’s kimchi is red and appetizing, but an poor family’s kimchi is like white kimchi with a few pieces of dried red pepper powder on the top.”

Read the full story here:
The Chilly Economic Wind of Winter
Daily NK
Yoo Gwan Hee
11/10/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-8-1
11/8/2010

North Korea held an extended meeting of the entire Cabinet in order to discuss the types of projects to be pursued in the last quarter of the year, and to strategize on how these projects should be implemented.

On October 28, the CHOSUN SHINBO reported on an article in the MINJU CHOSUN, which is under the control of the North Korean Cabinet. According to the article, efforts are being made to strongly construct the foundation upon which exemplars of the ‘military-first’ era will be erected. Production lines and facilities in all realms of the People’s Economy need to come into alignment with CNC, and efforts need to be made toward modernization, environmental protection, and reforestation. In particular, the Cabinet has pledged to decisively improve city management and restore socialism in cities and agricultural villages. Efforts will be focused on restoring socialist principles to economic management and ensuring that the centrally planned national economy is implemented.

The newspaper also reported that the North’s Cabinet held discussions on how to successfully fulfill all the goals set for the third quarter while creating a strategy to meet all of the targets set for the annual People’s Economy. It is unknown exactly when this meeting was held, but Premier Choi Yong-rim and other Cabinet members were all in attendance, as were city and town People’s Committee representatives, committee members from factories and farming communities, economic planners, and managers from critical factories and organizations.

As officials discuss economic reforms, the sixth annual autumn Pyongyang International Trade Fair was held from October 18-21, and it saw a greater Chinese presence than the thirteenth annual spring trade fair held last May. This could be the result of Kim Jong Il’s August visit to China. According to the newspaper, seventeen countries were represented by over 140 companies (48 from North Korea, 93 from abroad) — This was three countries and over twenty companies more than were at the spring fair. India participated for the first time this fall.

An official from the trade fair told the newspaper that the increased participation from Chinese companies was a direct result of Kim Jong Il’s recent visit to China’s northeastern region and the improved economic relations between Pyongyang and Beijing that came out of that visit. From machinery and equipment to steel products, electronic goods and light industrial products, food, pharmaceuticals, traditional herbal medicines and chemical products, over 57,000 products in over 2,300 different categories were on display. This is more than 600 categories of goods not seen last year.

Foreign companies participating in the fair signed contracts with North Korean offices for sales, technology exchanges, joint ventures, and investment opportunities, building on the ‘Introduction and Negotiations on the Investment Environment of the Democratic People’s Republic of Korea’ held on October 18.