Archive for the ‘International trade’ Category

DPRK – China trade 2015

Monday, May 23rd, 2016

According to UPI:

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

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

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

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

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

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

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

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

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

Share

Russia sanctions DPRK

Monday, May 23rd, 2016

According to the Choson Ilbo:

Russia has halted financial transactions with North Korea, and the EU has added 18 individuals and one organization to its North Korea sanctions list.

The international sanctions aim to strangle the flow of hard currency into the North’s nuclear and missile programs.

The Russian central bank last Thursday told all Russian banks to halt financial dealings with North Korean agencies, organizations and individuals on the UN Security Council sanctions list, Radio Free Asia reported.

The order said the banks must immediately freeze bonds held by sanctions targets and close accounts related to the North’s development of nuclear weapons and missiles.

A Russian presidential decree will also take effect soon to close North Korean bank branches and joint venture firms.

But Russia will continue to allow financial transactions between Russian and North Korean banks authorized by the UN.

The measures deal a blow to North Korea because the two countries have only recently increased cooperation.

Russia has been criticized for giving the North Korean regime a lot of leeway by allowing its banks to open accounts for North Korean banks and settling business with North Korea in roubles.

“What’s important is whether the international community including Russia and Switzerland will put their decisions into action,” a diplomatic source said. “If they do, the North will suffer a lot.”

A recent gasoline price hike in the North seems due to Russia’s downsizing of supplies to the North.

The EU has announced its third round of sanctions since the North’s latest nuclear test. This has brought the number of sanctions targets to 66 individuals and 42 organizations. They will be banned from entering EU countries and their assets will be frozen.

Here is coverage in the Joong Ang Ilbo:

Russia’s central bank called for a suspension of all transactions with North Korea, media outlets reported Friday, which follows Switzerland’s toughened sanctions on the regime earlier this week.

The move is in line with the strongest-ever United Nations Security Council resolution adopted in early March to penalize North Korea for its fourth nuclear test and long-range missile launch and curb its weapons of mass destruction program.

The Russian central bank was reported to have issued an order to local banks and financial institutions to suspend transactions with Pyongyang on Thursday, according to Radio Free Asia.

The order stated that transactions with Pyongyang were possible only with the permission of the United Nations.

The central bank further declared an immediate freeze on bonds held by North Korean individuals, agencies and organizations blacklisted by the UN Security Council.

Likewise, Russian financial institutions will have to close any accounts that have possible links to the North’s nuclear and missile programs.

On Wednesday, Switzerland imposed tighter sanctions on North Korea, ordering the freezing of assets held by North Koreans in the country and closure of their bank accounts as well as blocking funds owned by the North Korean government.

The Swiss government made the move to block all funds and economic resources connected with North Korea’s nuclear and missile programs in line with UN Security Council Resolution 2270, which was adopted in March in response to Pyongyang’s nuclear test in January and a ballistic missile test in February.

This included mandatory inspections of all cargo going in and out of North Korea, a ban on exports of coal, iron and other mineral resources from the North, as well as prohibiting aviation and rocket fuel exports into the country.

Russia and China, two of the five permanent members of the 15-member Security Council, have generally defended Pyongyang’s stance in the council. They also negotiated some room for leeway in the March resolution on North Korea. How they implement the sanctions will be crucial to cutting the cash flow into Pyongyang’s WMD program.

The Swiss government extended an existing ban on exports of luxury items to include more goods and prohibited North Koreans from studying in Switzerland in higher physics or nuclear engineering.

On Thursday, the European Union expanded its sanctions against Pyongyang, adding 18 individuals and an entity it deemed related to its weapons program to its blacklist.

This brings the EU blacklist to 66 individuals and 42 entities considered to be involved with North Korea’s nuclear and missile development.

When asked about the government’s position on Russia’s sanctions, South Korean Ministry of Unification spokesman Jeong Joon-hee said in a briefing Friday, “We strongly welcome that countries around the world, including China and Russia, are actively taking part in these strong sanctions.”

Read the full story here:
Russian Central Bank Halts Dealings with N.Korea
Choson Ilbo
2016-5-23

Share

DPRK – China Trade (2016)

Monday, May 23rd, 2016

UPDATE 1 (2016-5-23): Reuters reports a drop in Chinese imports of North Korean coal:

China’s imports of coal from its neighbor North Korea reached 1.53 million tonnes in April, down 35 percent on the month and 20.5 percent year-on-year as Beijing sought to comply with a tougher sanctions regime against the country.

North Korean shipments over the first four months of the year remain 23.2 percent higher than the same period of 2015, data from China’s General Administration of Customs showed on Monday.

China’s Ministry of Commerce announced at the beginning of April that it would ban North Korean coal imports to comply with new United Nations sanctions on the country, though it made exceptions for deliveries intended for “the people’s wellbeing” as well as coal originating from third countries like Mongolia.

Mongolia was the chief beneficiary of the decline in shipments from North Korea, with the country supplying 1.98 million tonnes to China in April, up 34.7 percent on the year.

Australia remained China’s biggest supplier, though the April volume of 5.74 million tonnes was down 12.9 percent compared to last year.

Read the full story here:
China coal imports from North Korea dip 35 percent as sanctions bite
Reuters
2016-5-23

ORIGINAL POST (2016-4-14): Yonhap reports on Q1 2016. Overall trade is up, but this is composed of surging Chinese exports to North Korea and falling imports. Here are the relevant parts of the report:

Trade volume between North Korea and China posted double-digit growth in the first quarter of 2016 from a year earlier despite the United Nations’ punitive economic sanctions imposed on the reclusive country, official data showed Wednesday.

The size of bilateral trade stood at 7.79 billion yuan (US$1.2 billion) in the January-March period, up 12.7 percent from the same period last year, Huang Songping, spokesman of China’s General Administration of Customs, said during a press briefing on the country’s first-quarter trade outcome.

The increased trade volume is attributable to a sharp rise in China’s exports to North Korea in the three months, which posted 14.7 percent growth to 3.96 billion yuan, according to the spokesman.

On the other hand, China’s imports from North Korea contracted 10.8 percent to 3.83 billion yuan, he said.

“Major Chinese exports to North Korea are machinery, electronic goods, labor-intensive products and agricultural goods, while imports mainly are coal and iron ore,” Huang said.

The spokesman indicated that the trade increase should not be viewed as China circumventing the U.N. Security Council sanctions because the latest figure accounts for bilateral trade volume before the sanctions took effect.

China immediately implemented the sanctions after it announced a list of banned trade goods with North Korea on April 5, the spokesman pointed out.

“The China-North Korea trade data for the first quarter has nothing to do with anti-North sanctions,” the official said, also vowing to “follow through with the U.N. sanctions resolution thoroughly.”

Another official from China’s State Council stressed any trade items that concern the public welfare or have no link to North Korea’s nuclear weapons development are not subject to the sanctions.

But the official refused to release the monthly trade figure for March, only saying that the monthly data is not available.

In early March, the U.N. adopted the toughest sanctions it has ever slapped on North Korea as punishment for the communist country’s defiant nuclear test in January and a long-range rocket launch in February.

Read the full story here:
N. Korea-China trade volume up 12.7 percent on-year in Q1
Yonhap
2016-4-13

Share

Not surprising: Inter-Korean trade to fall in 2016

Friday, May 13th, 2016

According to the Choson Ilbo:

Trade with North Korea is expected to be practically zero this year now the joint Kaesong Industrial Complex has been shut down.

According to a 2016 White Paper published by the Unification Ministry on Thursday, last year’s cross-border trade volume was a record US$2.7 billion, up 15.9 percent from 2014, thanks to an increase in trade through the industrial park.

But that accounted for 99.6 percent of all cross-border trade since other trade had already been suspended under earlier sanctions in the wake of the sinking of the Navy corvette Cheonan in 2010.

Now the industrial park has been closed there is no trade left, the ministry said.

Since the North’s latest nuclear test in January, Seoul has also halted humanitarian aid to the North. Last year, Seoul gave Pyongyang humanitarian aid worth W25.4 billion, up 30 percent from 2014 (US$1=W1,167).

Read the full story here:
Trade with N.Korea Falls to Near-Zero
Choson Ilbo
Kim Myong-song
2016-5-13

Share

DPRK participates in Xian trade fair

Friday, May 13th, 2016

According to Yonhap:

North Korea on Friday showed off wild ginseng roots, a tiger painting and other health products at an international trade fair hosted by China’s northern city of Xi’an.

Although North Korea and China have held their annual trade fair in the border city of Dandong, it was unusual for the North to set up booths at a trade exhibition in other parts of China.

International sanctions were tightened in early March following North Korea’s fourth nuclear test in January and launch of a long-range rocket in February.

Forty-five nations, including South Korea, participated in the “Silk Road” trade fair, which is organized by China’s top economic planner and commerce ministry.

North Korea came up with paintings, wild ginseng roots, ginseng tea, cigarettes and some medicine.

Wild ginseng roots, which are highly valued in Korea for its perceived healing benefits, were being sold at 3,600 yuan (US$549.80) per package.

A painting featuring a tiger, which is 4 meters wide and 1.5 meters high, was priced at 100,000 yuan, according to a North Korean representative.

There were about 30 North Korean representatives at the fair.

A source with knowledge of the matter in Xi’an said North Korea applied for booths at the fair, although China had not sent an invitation to the North for the exhibition.

Read the full story here:
N. Korea shows off wild ginseng roots, tiger painting at China fair
Yonhap
2016-5-13

Share

Taedonggang Beer goes on sale in China

Thursday, April 28th, 2016

According to the Korea Times:

Taedonggang beer, a state-owned North Korean brand, is available in grocery stores in Dandong and Shenyang, China, according to news reports.

“I noticed billboards promoting Taedonggang beer on a street near Dandong Station, and also newspaper advertisements showing the addresses and phone numbers of retail stores,” a source told Radio Free Asia.

The beer is not yet widely distributed in China. Sources from Shenyang and Dandong said they could find only a few stores selling the beer in Xita Street where many Koreans live and in Korean gift shops.

North Korea’s popular beer costs 20 yuan ($3) a bottle, four times the price of regular brands in Chinese grocery stores.

“The beer has a soft, rich flavor with more alcohol than Chinese beers,” said a Chinese man who tasted Taedonggang beer at a restaurant in Dandong.

“However, the price is too expensive for Chinese citizens to drink regularly.”

Read the full story here:
N. Korean beer sale in China
Korea Times
Lee Jin-a
2015-4-28

Share

North Korea looking to expand foreign trade, turning to EU and BRICS

Thursday, April 28th, 2016

Institute for Far Eastern Studies (IFES) 

North Korea is seeking to expand its foreign trade by turning to the EU and BRICS (Brazil, Russia, India, China and South Africa) for cooperation.

In the recently published book Looking at Today’s Choson from 100 Questions and 100 Answers, North Korea emphasized the importance of cooperation with EU and BRICS, saying it will “seek various ways to expand its foreign trade.”

The book noted that with the upcoming Pyongyang International Trade Fair (PITF) in May and September, North Korea is looking for grounds to engage in foreign trade to “further the cooperation with many countries around the world.”

The book also stated that North Korea is engaging in a wide range of international trade such as economic cooperation and looking into cooperative business models with Europe, Southeast Asia, Latin America, the Middle East and Africa as well as with international and regional economic organizations such as the EU and BRICS.

However, seeing as the book does not specify detailed ways in which North Korea will take to cooperate with the EU and BRICS, the plan appears as a mere hope.

While the book admitted the difficulty in building an economically strong country while facing the sanctions imposed by the international community, it emphasized that “it [North Korea] is putting its effort in expanding international trade to directly penetrate the sanctions to build a strong socialist state.”

The book also noted that the diversification of active foreign trade will enable “the expansion of width and depth of distribution through dealing with more countries on various industries on many accounts.” The diversification in this context refers to the people in charge of trade and the methods of trade.

Continuing on the idea of diversification, the book mentioned that “not only does the diversification of foreign trade not contradict itself with the independence of national economic stability, but it actually is an important asset in developing the ability of economic independence and its capability,” meaning that diversification should be a key foundation in building an independent economy.

The book explained that the independence of economy is the enhancement of people’s identity and independence that is linked to the domestication of materials. Therefore, beginning with coke (coal) gasification, Juche-iron, Juche-refractory material production line, Juche-fertilizer, and Juche-textile production line will be completed, for instance.

According to the book, this will be the core foundation in speeding up economic development in association with the domestic materials parring with international market prices to stay in market competition. It also stated that this is “not only a matter of economic efficiency, but also a fierce fight against enemy states in the war of defending socialism.”

Share

North Korean market condition since new international sanctions

Wednesday, March 23rd, 2016

Institute for Far Eastern Studies (IFES)

It has been almost two weeks since the enforcement of new sanctions imposed by the United Nations Security Council (UNSC), and so far North Korea’s domestic economy seems calm. Following the sanctions, North Korea has been preparing for the 7th Party Congress in May with its 70-day campaign (or ‘speed battle’). In order for the people to focus on the preparation, the government has reduced the business hours of markets and has begun controlling the street markets (i.e., ‘grasshopper’ markets).

In particular, it was expected that the sanctions would reduce the inflow of goods into the country which would then lead to a rapid rise in market prices and exchange rates, but so far the market prices appear to have remained relatively stable. According to the Daily NK, a South Korean online newspaper reporting on North Korea, 1kg of rice is selling for 5,100 KPW, 5,150 KPW, and 5,080 KPW in Pyongyang, Sinuiju, and Hyesan, respectively. These prices are relatively similar to the prices prior to when the sanctions were in full effect (i.e., 5,100 KPW in Pyongyang and Sinuiju, and 5,260 KPW in Hyesan).

The exchange rate appears no different. One US dollar exchanges for 8,150 KPW in Pyongyang, 8,200 KPW in Sinuiju, and 8,170 KPW in Hyesan. The rate has been only slightly reduced compared to the rate prior to when the sanctions were put in place (i.e., 8,200 KPW in Pyongyang, and 8,290 KPW in Sinuiju, and Hyesan).

The reason for the stability in the market and the exchange rate is because even though the market hours have been reduced due to the 70-day campaign, the markets actually are running better than before and in some regions the price has gone down for some goods, presumably because some of these items that were exported in large scale via China have been circulated in the North Korean domestic market.

Also, aside from the underground resources (i.e., minerals) — the sanctioned items that used to account for most of the exports — other goods are still sold accordingly, which helps in stabilizing the market. Furthermore, the improvement of the domestic market cannot be taken lightly when considering the stability of the markets. In other words, unless markets are completely closed, people in North Korea wouldn’t consider it an issue.

Meanwhile, despite the international community’s sanctions against the country, including that of the UN Security Council, North Korea is claiming overproduction in areas such as electrical power and minerals in the run-up to the Seventh Party Congress in May. The North Korean propaganda media ‘DPRK Today’ has mentioned about production and the country’s success in confronting the imposed sanctions.

More specifically, since the initiation of the 70-day campaign last month (February 23rd), in order to boost economic success, Namhung Youth Chemical Complex has reportedly turned out 60% more fertilizer; Pyongyang Railway Bureau increased the traffic by 40%; Ryongyang Mine increased its production of magnesite by 20%; and 2.8 Jiktong Youth Coal Mine produced 7,200t beyond its quota. In addition, Kim Jong Suk Textile Mill reportedly has seen more than 40 labors complete the plan for the first half of the year, while Baekdu Hero’s Youth Power Plant has reached 37,000m2 in dam construction. Previously on March 3rd, the Korean Central Broadcasting radio reported that many of the production targets for February in the national economy have been surpassed.

Share

Chinese local governments formally notified of sanctions against North Korea

Monday, March 21st, 2016

By Benjamin Katzeff Silberstein

I’m not sure if this is anything out of the ordinary or if this is the formal routine every time sanctions have been passed. Nevertheless, it’s an interesting development. If sanctions against North Korea are ever to hit the economy where it hurts, Chinese local governments are perhaps the most important implementers since much (or most) of North Korea’s external trade occurs with them. Korea Herald:

China has notified its local governments on how to implement new U.N. sanctions on North Korea, including specific measures on imports from North Korea, a diplomatic source with knowledge of the matter said Monday.

Kim Hong-kyun, South Korea’s chief nuclear envoy, held talks with his Chinese counterpart, Wu Dawei, last Friday as the two nations vowed to fully implement the new U.N. sanctions against North Korea’s fourth nuclear test and rocket launch.

During the talks, Wu told Kim that China has been “in the process of implementing the new U.N. resolution on North Korea,” said the source, who attended the Friday meeting.

“The Chinese side also believes that strong sanctions are needed to show its sincerity on denuclearization,” the source said.

Earlier this month, the U.N. Security Council levied tougher sanctions against North Korea’s fourth nuclear test on Jan. 6 and the Feb. 7 launch of a long-range rocket, both of which violated previous U.N. resolutions.

The new U.N. sanctions require countries to limit or ban imports of North Korean coal, iron ore and other mineral resources if the proceeds are used for the North’s nuclear and missile programs.

One of the potential loopholes is a provision that allows North Korea to continue exports of coal and iron ore if such transactions are for “livelihood purposes.”

Full article here:
China notifies local gov’ts of new U.N. sanctions on N. Korea
Yonhap News/Korea Herald
2016-03-21

Share

China to halt half of coal imports from North Korea, according to Chinese newspaper

Wednesday, February 24th, 2016

By Benjamin Katzeff Silberstein

Dong-a Ilbo recounts the story from Global Times:

The Chinese government will suspend half of trade with North Korea, China’s official Huanqiu Shibao (Global Times) daily reported Tuesday. It said that China will stop importing North Korean coals, which account for 42.3 percent of the China-North Korea trade, next month. The Huanqiu Shibao is a sister paper of the Renmin Ribao, the organ of the Communist Party of China, with a circulation of 2.4 million copies.

The Huanqiu Shibao quoted a trader in Dandong, Liaoning Province that China’s coal trade with North Korea will be suspended, starting March 1 and that it is probably because of the financial sanctions following the North’s satellite launch. The trader was also quoted as saying that China’s Ministry of Commerce or the customs authorities sent an order to Liaoning Province about the trade ban and that half of China-North Korea trade will be halted.

The trade also stressed that while the China-North Korea trade will likely recover from May, it depends on Pyongyang’s attitude. An informed source on China-North Korea trade also told the Dong-A Ilbo in a telephone interview that a Chinese businessman attempted to remit cash to the North via a Chinese bank in Shenyang, Liaoning Province to pay for North Korean iron ores but was informed that he was not allowed to do so. It has yet to be confirmed whether Beijing actually put a ban on imports of North Korean minerals.

Full story here:
China halts half of imports of N. Korean coals
Dong-a Ilbo
2016-02-25

Share