Archive for the ‘International trade’ Category

DPRK – China trade contracts in 2015, but inter-Korean trade increases

Monday, February 1st, 2016

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

Share

North Korea’s nuclear test and trade with China: no discernable impacts so far

Tuesday, January 19th, 2016

By Benjamin Katzeff Silberstein

North Korea’s nuclear tests aren’t usually met with any drastic economic measures from China. So far, the supposed-but-not-really-hydrogen bomb test hasn’t been an exception. According to a piece in Asia Times Online, traders in Dandong have barely noticed any impacts from the latest test. Though fewer North Korean traders appear to be present in Dandong, nothing seems to be greatly out of the ordinary:

According to Initium reporters,  two-way trade in Dandong,  a prefecture-level city China’s  southeastern Liaoning province that sits astride the Chinese-North Korean border, hasn’t been affected. Merchants in the key trade hub told Initium that fewer North Korean merchants had been seen in Dandong recently, but they said this could be tied to a change in procedures with the possibility of a rebound in trade in February.

The piece also contains a look back at what’s happened (and not happened) after North Korea’s previous nuclear tests, though I suspect that isolating the specific causes for any changes in trade is next to impossible:

The North’s second nuke test in 2009 had the gravest impact on bilateral trade. The trade volume decreased by 8.9%. In October of that same year, then Chinese Premier Wen Jiabao visited the North and crafted a set of bilateral cooperation agreements, including the development of special border zones and the construction of the new cross-border Dandong-Yalu River bridge. These efforts led to the best 2 years for the China-DPRK relationships since the end of the Cold War, with then DPRK leader Kim Jong-il visiting China twice. Trade also surged.

After Kim Jong-il’s death in December 2011, bilateral trade lost some steam. But overall volume remained stable. Good times returned and continued until 2013, when the trade volume between the two countries reached $6.545 billion, which was 77% of the DPRK’s total foreign trade.

Read the full article here:

Weighing data: Will North Korea’s nuke test impact trade with China? 
Qin Xuan
Intium Media (and Asia Times Online)
2016-01-18

Share

North Korean workers ordered home after Moranbong debacle

Friday, December 18th, 2015

By Benjamin Katzeff Silberstein

According to Daily NK, North Korean authorities have ordered workers in China home following the cancelled Moranbong Band concert:

Just five days after North Korea canceled Moranbong Band’s Chinese tour and ordered an immediate return of the band back home, the authorities issued an order to all sojourning employees in China, most of whom are employed at trading companies, to report to Pyongyang.

On the 16th, our Daily NK reporter spoke with a source residing in Pyongyang, who informed us that no concrete reason had been given along with the order. And so on the 16th, agricultural workers, forestry workers, traders, and workers affiliated with Mansudae Art Studio boarded a train to return back to North Korea.

This was corroborated by an additional source in the capital.

Our source expressed concern over the drastic measure, wondering if the issue of the Moranbong Band’s canceled tour might be exploding into a bigger issue. “When you call back scores of workers abroad, that’s a pretty big deal,” she pointed out.

One has to wonder whether all workers in China could really have been recalled home, given their substantial numbers. Just to give a sense of the size of this labor force, in 2013 the number of North Korean workers that entered China was around 93,000, according to South Korean statistics. Most likely only a small share was stationed permanently in the country, but even so, recalling each and every one on such short notice sounds like a logistically implausible operation.

Read the full article:
NK orders workers in China back home
Kang Mi Jin
Daily NK
2015-12-18

Share

Tumen Triangle tribulations: The unfulfilled promise of Chinese, Russian and North Korean cooperation

Thursday, November 12th, 2015

Andray Abrahamian has published a report with the US-Korea Institute on developments in the Tumen Triangle.

Here is the report description:

The Tumen Triangle region-where North Korea, China and Russia meet-is, in many ways, the story of regional integration being held back by the political concerns of Pyongyang, Beijing and Moscow. There are long-term forces at work here, such as Moscow’s concerns over Chinese dominance in the sparsely populated Russian Far East. This legacy of mistrust frames cross-border interactions and despite recent warm relations, major cross-border cooperation remains limited.

In this USKI Special Report, Andray Abrahamian, Director of Research at Choson Exchange examines historical legacies, contemporary relations and shifting strategic priorities between the three countries. The report then focuses trade and investment in the Tumen Triangle region, particularly how the Yanbian Korean Autonomous Prefecture and Primorsky Krai interact with and affect Rason Special City, the center of the Rason Special Economic Zone.

You can download the report here (PDF).

Share

Camp 16 imagery update

Thursday, November 12th, 2015

UPDATE 1 (2015-11-18): There was some follow-up media coverage of this work that claimed Camp 16 is about half the size of Pyongyang. This is not the case. Here are the actual statistics comparing the geographical sizes of Camp 16 and Pyongyang [Measures are approximate using Google Earth measuring tools]:

Pyongyang has 230 mile (371km ) perimeter and area of 679 sq miles (1758 sq km).
Camp 16 has 72 mile (115 km) perimeter and area of 212 sq miles (548 sq km).

So Camp 16 is approximately 31% the current size of Pyongyang. If we included Sungho, Sangwon, and Junghwa, which were moved into North Hwanghae Province, the percentage would drop even further.

ORIGINAL POST (2015-11-12): I previously wrote about Camp 16 in Myonggan here (2013-7-19). Now Google Earth has updated the imagery of Camp 15 with satellite pictures dated 2015-11-2 and 2015-10-15. I reported some of the changes in this RFA report this week, but here they are again…

1. New small hydro power plant. The North Koreans built a dam, drainage canal and small power station near one of the camp’s production facilities:

 Camp-power-station-16-2013-10-3 Camp-16-power-station-2015-10-15

Here is a close up of the plant and a nearby factory that appears to be operational:

Camp-16-2015-10-15-power-plant-factory

2. New housing and possibly a sports field. A new apartment block was built in the camp. It appears to be nearly 160m in length and is composed of just a couple of stories. The building behind it that is probably for livestock. The picture also reveals what appears to be a sports field of some kind next to the housing. The image is not very clear, so this could be something else, but I am not sure what.

Camp-16-New-Housing-2013-10-3 Camp-16-New-Housing-2015-10-15

Here is a closeup of the “sports field”. If you have a better idea what this is, please let me know.

Camp-16-sports-field-close-up

3. New fish farm. The fish farm is small, just over 1,100 sq meters surface area.

Camp-16-fish-farm-2013-10-3 camp-16-fish-farm-2015-10-15

4. Housing Razed. Just north of the fish farm some buildings, which could be small homes or workshops, appear to have been razed:

Camp-16-Housing-razed-2013-10-3 Camp-16-housing-razed-2015-10-15

5. Evidence of continued mining and logging. Below we can see evidence of mining activity since 2013.

Camp-16-mine-activity-2013-10-3 camp-16-mine-activity-2015-10-15

Here are piles of felled trees which indicate the mine also exports lumber:

Camp-16-lumber-2015-11-2

If the minerals that are mined and the lumber that is harvested are exported for hard currency, the transaction would likely involve a trade company under the control of the Ministry of State Security (MSS,  SSD, NSA), however, I am not privy to the details of those transactions.

Share

North Korea’s “Epic Economic Fail” in International Perspective

Wednesday, November 11th, 2015

A new report by Nicholas Eberstadt has been published by the Asan Institute for Policy Studies. According to the summary:

This report brings to the table new research on the dimensions of economic failure in modern North Korea, offers a quantitative view of how nations develop in our modern world, and where North Korea’s awful slide downward fits within this global tableau; offers admittedly approximate long term estimates of overall net resource transfers to the DPRK, including estimates of net transfers from the major state benefactors; and some indications about the interplay between concessionary resource transfers from abroad and the DPRK’s domestic economic performance. It concludes with some observations about the implications of these findings

You can download a PDF of the report here.

Share

NCNK on pending sanctions legislation

Tuesday, October 27th, 2015

The National Committee on North Korea (NCNA) has published a quick summary piece on sanctions legislation under deliberation in the US Congress. According to NCNK’s web page:

There are currently three related North Korea sanctions bills under consideration in Congress. H.R. 757, introduced to the House by Rep. Ed Royce in February 2015, is broadly similar to a bill that passed the House in the last session of Congress, but wasn’t acted upon by the Senate. In the Senate, S. 1747 was introduced by Senators Robert Menendez and Lindsay Graham in July of this year. Additionally, Senators Cory Gardner, Marco Rubio, and James Risch are co-sponsors of the recently-introduced bill S. 2144.

Although the three sanctions bills are generally similar in scope, there are several key differences among them, including their potential impact on humanitarian operations; the level of discretion the Executive Branch would have in applying sanctions; and language on sanctions targeting North Korea’s mineral industry.

NCNK’s new Issue Brief gives a detailed side-by-side summary of these three bills, noting key provisions and differences between the three.

You can download the Issue Brief here (PDF).

Share

China – DPRK open new shipping route

Friday, September 25th, 2015

According to Xinhua:

A bulk cargo and container shipping route between China and the Democratic People’s Republic of Korea (DPRK) has been put into operation, focusing on coal import from DPRK and grocery export from China, authorities said on Friday.

The route, linking Longkou port of east China’s Shandong Peninsula to Nampo port of western DPRK was the first scheduled shipping line for bulk cargo and container between the two countries. It is serviced by seven ships, which complete one circuit of the ports every ten days, according to Longkou Port Group.

The route was jointly established by Longkou Port Group, Liaoning Hongxiang Industrial Group and a shipping company in DPRK in a bid to promote international trade under China’s “Belt and Road” initiative.

Located at the Bohai Sea coast and built in 1914, Longkou port handled 75.07 million tonnes of cargo and 550,000 TEU of containers last year.

“The opening of the route can help improve the service function of the port and is of great significance for the port’s transformation and upgrading,” said Zhang Haijun, general manager of Longkou Port Group.

Read the full story here:
Bulk cargo and container shipping route links China, DPRK
Xinhua
2015-9-25

Share

North Korea’s domestic impacts of lower coal prices

Tuesday, September 22nd, 2015

By Benjamin Katzeff Silberstein

North Korea is seeing some interesting impacts domestically from the lowered coal exports. DailyNK reports that market trade has picked up in intensity as a result of the lower exports of coal:

Amidst the growing private economy in North Korea, a number of people are growing wealthy by cashing in on the expanding distribution industry. Recently, a growing number of these newly rich are purchasing China’s Jinbei brand of small 2-3 ton load trucks to facilitate business operations, Daily NK has learned.

“Recently, Jinbei trucks coming in from Dandong Customs House through to the Sinuiju customs office in North Korea are becoming very hot items in the transportation market,” a source in North Pyongan province reported to Daily NK on September 16th. “Foreign-currency earning enterprises are importing these smaller Jinbei trucks which are quite different from the 20-30 ton load trucks that were previously the norm.”

This information was cross-checked via an additional source in the same province and a source in South Pyongan Province.

As North Korean coal exports have decreased and domestic market activity has picked up, the small trucks have become more useful for delivering goods to local markets. “Ordinary men use bicycles or motorbikes to distribute goods, but the rich are able to buy these small 2-3 ton load trucks and use those instead,” he explained.

These trucks, as with most vehicles in North Korea, are first imported by foreign-currency earning enterprises and sold unofficially to individuals with the cash to pay up front and in full–i.e. the donju. Because possession of vehicles is still officially forbidden in North Korea, the car remains registered under the name of the affiliated enterprise’s name; the entrepreneurial individual utilizing it kicks back a portion of his–or, less frequently, her– profits to the company.

Read the full article:

DailyNK 

Jinbei trucks roll in, ‘donju’ distribution operations rise

2015-09-18

Share

DPRK – China Trade in 2015 (UPDATED)

Tuesday, August 11th, 2015

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

Share