North Korea’s crop imports from China plunged 62 percent in October from a year earlier, data showed on Saturday, spawning speculation Pyongyang’s crop yield was not hit as hard by floods this year as was predicted.
According to the data compiled by the Korea Rural Economic Institute (KREI), North Korea imported 22,331 tons of crops such as flour, rice, corn and bean in October from its neighboring country, compared with 59,369 tons a year earlier.
The October figure was also down 38 percent from the previous month, according to the data.
In the first 10 months of the year, the North imported a total of 239,325 tons of crops from its strongest ally, also down 23 percent from the 310,106 tons a year earlier, the data showed.
The data followed projections North Korea’s crop yield would plunge this year, due mainly to unfavorable weather conditions that swept the country in late-summer, exacerbating the chronic food shortage in the poverty-stricken nation.
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North Korea imported a total of 376,431 tons of crops from China last year, following 313,694 tons in 2010 and 203,390 tons in 2009, according to the data.
Read the full story here:
NK’s crop import from China dip 62% in October
Yonhap (via Korea Times)
2012-12-1
North Korea has focused on developing Rajin Port, located in the North Hamgyong Province, with the aim of attracting foreign investments.
China and Russia have already secured usage rights to these ports and Mongolia has expressed itsinterest in this endeavor. This indicates a rising popularity and competition to use these ports.
Mongolian parliamentary speaker, Zandaakhuu Enkhbold,met with the DPRK’s Supreme People’s Assembly Chairman and Korean Workers’ Party Secretary Choe Tae Bok on October 19 on his four-day visit to Ulan Bator, the capitol of Mongolia. The officials from both countries agreed on the future possibilities of bilateral trade and cooperation in the fields of information technology and human exchanges. Mongolia is landlocked and expressed interests in cooperating for port leaseswhile Chairman Choe expressed enthusiasm in cooperation in harbor, coal, and mining industries.
The day after the two leaders met, Choson Sinbo, Pyongyang’s mouthpiece in Japan, directly reported on the results of the talk, exposing North Korea’s positive reaction to leasing ports to Mongolians. According to the newspaper, “Rajin Port is the most convenient sea route for Mongolia.”
Mongolia’s and North Korea’s bilateral cooperation on Rajin Port has been received positively as it fits the economic interests of these two countries. For Mongolia, they are interested in exporting coal and other underground resources overseas, as the country is rich in underground resources such as coal, copper, gold, and uranium. However, these resources arecostly to export since Mongolia has to rely on Chinese and Russian railway systems.
Once it is able to obtain lease rights to the Rajin Port, Mongolia should be able to significantly reduce itsshipping costs. Thus far, Mongolia has exported coal mainly to China, but may intend to diversify exports to other countries once it is able to use the port at Rajin.
Furthermore, once freight trains between Hassan in the Far East region of Russia and Rajin begin to operate, it will make it possible for Mongolia to transport coal directly to Rajin Port.
North Korea is most likely to lease Pier No. 2 and Sonbong Port to Mongolia, which are currently not being usedby China or Russia.
More importantly, North Korea is turning to South Korean participation in the development of future Rajin Port development. Choson Sinbo reportedin an article on October 21 (under the title, “Hwanggumpyong and Rason”)that “We (North Korea) sincerely want North and South to cooperate for mutual prosperity through communication and join forces to advance economic cooperation larger than neighboring countries.”
Once inter-Korean relations improve and South Korea joins China, Russia, and Mongolia in the development of Rajin Port, other economic cooperation between these five countries is likely.
A shipment of graphite cylinders usable in a missile program and suspected to have come from North Korea was found in May aboard a Chinese ship en route to Syria in what appears to have been a violation of U.N. sanctions, diplomats said Tuesday.
South Korean officials seized the shipment of 445 graphite cylinders, which had been declared as lead piping, from a Chinese vessel called the Xin Yan Tai, U.N. Security Council diplomats told Reuters on condition of anonymity.
South Korean authorities stopped the ship at the South Korean port of Busan, the envoys said, adding that the cylinders were intended for a Syrian company called Electric Parts.
South Korean officials informed the Security Council’s North Korea sanctions committee about the seizure on Oct. 24, the envoys said, adding that China had offered to help investigate the circumstances surrounding the incident.
“It appears the cylinders were intended for Syria’s missile program,” a diplomat said.
“China assured us they will investigate what looks like a violation of U.N. sanctions.” Diplomats said the graphite cylinders appeared to be consistent with material usable in a ballistic missile program and that South Korea would investigate the case with China.
The shipment to Syria was arranged by a North Korean trading company, diplomats said. One diplomat said the Syrian company that was to have received the cylinders may be a subsidiary of the North Korean trading firm.
North Korea is barred from importing or exporting nuclear and missile technology under U.N. Security Council sanctions imposed on Pyongyang because of its nuclear tests in 2006 and 2009.
North Korea imported US$170,000 worth of firearms from Switzerland in the first half of this year, Seoul’s trade agency said Friday.
The communist country brought in about $100,000 of guns such as shotguns, air and gas rifles, and revolvers while importing around $70,000 worth of firearm components, according to the report by the Korea Trade-Investment Promotion Agency, or KOTRA.
The state-run agency said the North had no record of firearm imports from Switzerland since 2009 until last year when it started to ship them in the first half.
Some experts said the new trend may be due to the fact that North Korean leader Kim Jong-un spent his adolescence in the country.
Read the full story here:
N. Korea imports US$170,000 of firearms from Switzerland Yonhap
2012-10-26
Recently, eight companies in the Kaesong Industrial Complex (KIC) informed that they received tax collection notices, a unilateral decision made by the North Koreans.
The Ministry of Unification and KIC reported that out of the 123 companies, 8 companies were informed by the North Korean authorities to pay about 160,000 USD in total in taxes.
Two companies out of the eight notified companies already paid close to 20,000 USD to the North Korean tax authorities.
On top of taxation, 21 companies were notified to submit additional tax documents. This may be to collect additional information for future tax collection purposes.
The tax authorities are also requiring companies to submit documents related to show proof of purchase of raw materials, and submit cost analysis documents and a copy of bank statements showing the history transactions.
Last August, the Central Special Direct General Bureau (CSDGB) notified the Kaesong Industrial District Management Committee of new tax bylaws, which enforces a fine up to 200 times the amount of accounting manipulation and abolish the retroactive taxation system while increasing the number of documents for submission. Furthermore, the North is threatening to restrict access to the KIC, if companies fail to pay owed taxes or do not submit requested documents.
In addition to imposing fines for tax frauds, new tax bylaws demanded by the CSDGB included enforcement of additional taxes in the name of corporate income tax, sales tax, and other taxes.
The unilateral decision by the CSDGB to amend bylaws is a violation of Kaesong Industrial District Law, which requires any revision of the laws must be negotiated between the North and the South. Another problematic issue is that tax imposed on the companies is based on North Korea’s own estimation rather than tax reports submitted by the companies of the KIC.
For the first time last year, tenant companies in the KIC recorded an average operating profit of 56 million KRW, finally operating in the black after years in deficit.
Despite the global economic slowdown, more than 6,000 business representatives from 20 countries signed agreements on more than 200 cooperative projects. Some 72 of the largest projects have a total combined value of $1.26 billion.
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During the 11th Five-Year Plan period (2006-2010), total trade value between Dandong and DPRK amounted to $3 billion. Imports and exports between Dandong and the DPRK reached $1.86 billion in 2011.
So far, trade between Dandong and DPRK accounts for 40 percent of total China-DPRK trade, and the volume of the cross-border cargo trade via Dandong port makes up 80 percent of the total Sino-DPRK trade volume.
UPDATE 4 (2012-10-16):Xinhua reports on the closing of the expo:
The five-day 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, held in the border city of Dandong, concluded on Tuesday with 72 agreements of cooperation intent signed. They have a combined value of 1.26 billion US dollars.
Pan Shuang, vice mayor of Dandong, said more than 6,000 Chinese and overseas people from over 20 countries and regions exhibited at and attended the expo. There were talks on 200 projects.
He said the projects related to industries ranging from aquaculture, clothes manufacturing, chemical production, wind power generation equipment, iron steel production to hotel construction.
AT THE EXPO
At the exhibition, the DPRK delegation exhibited ginseng products, food specialties, hand-made Hanbok, a traditional Korean costume, as well as mining and machinery equipment.
Ri Yong Chol, sales manager of Korea Roksan General Trading Corp., which is a ginseng supplier, said “I came to look for Chinese friends and potential business partners. Our company is also seeking opportunities to set up a subsidiary in China to get better access to the Chinese market.”
A Korean girl wearing brightly-colored Hanbok and traditional ornaments was selling costumes. “Our factory can make 20 such hand-made Hanboks a day. The clothes are for important occasions with exquisite workmanship and high-quality material,” she said.
Liu Songyu, chairman of a Korean garment firm from Yanbian Korean Autonomous Prefecture of Jilin Province, was interested in the business.
“Chinese labor costs have been rising fast. In Yanbian, a garment-factory worker’s salary has risen to 2,000 yuan (319 US dollars) a month. While, if the company had a factory in DPRK, it would save a considerable amount on labor costs. I would give a serious thought to that,” he said.
Yanbian is a heavily Korean ethnic populated region in China, where people also wear Hanbok during important occasions.
Elsewhere, Huang Zijun, an authorized dealer of Total Petrochemcial, was overwhelmed to obtain 20 orders from the DPRK delegation during the expo.
“I felt their enthusiasm in promoting business at the expo. I believe the DPRK is a big market for petrochemical products like lubricating oil,” he said.
An economic, trade, culture and tourism expo jointly initiated by China and the Democratic People’s Republic of Korea (DPRK) opened Friday in the border city of Dandong in northeast China’s Liaoning Province.
A delegation of 500 members from the DPRK is attending the 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, which is scheduled to run from Friday to Tuesday, the event’s organizers said.
Over 400 Chinese companies from 12 industries are also attending the expo.
With the theme of “friendship, cooperation and development,” the expo consists of commodity exhibitions, trade fairs, DPRK art performances, craftwork exhibitions, a border trip to the Yalu River and an exhibition for the tourism resources of the two countries.
Supported by the China Council for the Promotion of International Trade, the event is being organized by the Liaoning Provincial Government.
China is DPRK’s biggest trade partner. Statistics show that bilateral trade volume went up 62.4 percent year on year to 5.64 billion U.S. dollars last year.
A source from Dandong described the unusually vibrant scene to Daily NK yesterday, saying, “The North Korean authorities have mobilized companies from Pyongyang and from here in China to sell goods and pitch for joint venture opportunities. There are loads of people; it’s standing room only.”
The source added that North Korean companies attending the event are pushing very hard to attract investment; notably, by distributing their own promotional literature expounding upon the given company’s superior virtues and providing exact contact details for follow-up inquiries. It is not hard to find meetings continuing in local North Korean eateries, as the North Korean side tries to woo potential sources of capital.
Chinese companies are keen to hear about the joint venture opportunities available, the source also said; and with most of the larger enterprises from China’s three northeastern provinces sending representatives to Dandong for the event, which runs until the 16th, most of the city’s hotels are apparently full to bursting.
However, due to past and present cases of lip service being paid to contractual obligations by North Korean companies whose only goal has been to attract funding rather than build business, Chinese representatives are still very cautious about actually signing on the dotted line.
One such representative from a Dandong-based company with a 10-year history of doing business with North Korea pointed out to Daily NK, “We have seen countless examples of companies making contracts and then there being little contact between the partners thereafter. Unbelievably, one manager I tried some minerals business with last year just changed the name of the company and came back again this year.”
UPDATE 1 (2012-6-7): The expo appears to have been pushed back to October 2012. According to KBS:
North Korea and China will jointly hold a fair on economy, trade, culture and tourism in the Chinese border city of Dandong for five days from October 12th.
A Dandong-based newspaper reports that this will be the first comprehensive fair covering several fields that the two countries hold. The paper said the fair will exhibit products, offer trade consultations, hold cultural and art performances and introduce both nations’ tourist attractions.
Roughly 400 Chinese companies exporting to North Korea will participate in the event. About 100 North Korean companies and cultural troupes will partake.
Dandong is China’s largest base for trade with North Korea, with 70 percent of its trade with North Korea running through the border city.
Read the full story here:
N.Korea, China to Hold Joint Industrial Fair in October KBS
2012-6-7
ORIGINAL POST (2011-12-3): Dandong to host Sino-DPRK economic and cultural expo. According to Xinhua:
The northeastern Chinese city of Dandong, which borders the Democratic People’s Republic of Korea (DPRK), will host a Sino-DPRK economic, trade and cultural exposition in June next year, a local Chinese official said Saturday.
A series of activities, including a commodity fair, investment and trade talks, tourism exhibition and arts exhibition, will be staged during the exposition, said a spokesman with the Publicity Department of the Dandong Municipal Committee of the Communist Party of China.
The Phibada Opera Troupe of the DPRK, an artists group well known to Chinese people, will give performances during the event, he said.
Adam Cathcart took the time to send me this interesting link to the official Dandong web page. It contains some videos (in Chinese) in which local officials promote the changes they expect to come to this city as it transitions into a regional trade hub.
Below I have added some links to recent blog posts that a re related to Dandong:
Some 4,000 North Koreans are estimated to be working at major construction sites in a suburb of the Kuwaiti capital and living in military-style camps run by the North’s government, a Seoul diplomat said Monday.
Impoverished North Korea has recruited its people to work abroad and reportedly kept most of their earnings, one of the few sources of hard currency for the isolated regime. Along with China and Russia, the Middle East is a major destination for North Korean laborers.
“We have figured out that there are around 4,000 North Koreans working at major construction sites to build homes, hospitals and other facilities in a suburb area of Kuwait City, including Jahar,” the diplomat said on the condition of anonymity.
A North Korean worker in Kuwait earns up to US$500 per month, but nearly four-fifths of the worker’s monthly salary is directly deposited into accounts controlled by the North’s government, according to the diplomat.
“A North Korean worker is believed to actually receive $100 per month, with their jobs ranging from plasterers, carpenters, welders to drivers at the construction sites,” the diplomat said.
In April this year, eight North Korean workers were arrested by Kuwaiti authorities for allegedly bootlegging alcoholic beverages, the diplomat said. Alcohol is illegal in Kuwait, making the illicit business of alcohol bootlegging highly profitable.
As is well known, North Korean embassies self-finance their operational revenue and salaries. They also remit funds back to Pyongyang. As far as I am aware, the DPRK may have the only foreign service that is not a drain on the treasury.
Many times, however, the operations in which DPRK officials get involved take palce in the gray and black markets. I have previously posted about this here, here, here, here, here, here.
This weekend, news surfaced that a North Korean was involved in trading elephant ivory in Africa. According to AllAfrica.com:
The Mozambican customs service on Thursday seized 130 items of carved ivory, valued at about 36,000 US dollars, that a North Korean citizen named Jong Guk Kim was attempting to smuggle out of the country.
According to a press release from the Mozambican tax authority (AT), Jong was returning to Korea, via South Africa, and had already checked in for his flight, when customs officers intercepted him in the departure lounge of Maputo International Airport, and demanded that he open his hand baggage.
The ivory was hidden in several plastic bags. The 130 carved pieces weighed about three kilos.
Ivory can only be exported with the authorisation of the Ministry of Agriculture – if, as seems more than likely, Jong Kim has no such authorisation, the ivory will be confiscated and revert in favour of the state.
The Korean was also carrying 133,300 US dollars in banknotes in his hand baggage. Under current Mozambican exchange regulations, the maximum that anyone can take out of the country without declaring it is 10,000 dollars.
Anything above this sum must be authorised by the Bank of Mozambique.
Jong Guk Kim must now explain how he obtained this money. If he can prove that it came from a legitimate source, he will be allowed to export it – but only through normal banking channels.
The AT also revealed that it had recently seized in Maputo, seven rhinoceros horns, and about a tonne of abalone. Abalone is a genus of marine mollusks, threatened with extinction, due partly to overfishing, and partly to acidification of the oceans arising from climate change.
The abalones seized in Maputo probably came from South Africa. Abalones occur along much of the South African coast, and the South African authorities require permits for any export of this shellfish.
A tonne of abalone is valued at about five million dollars. It is believed that the ultimate destination of the Maputo abalone was Hong Kong.
I tried to locate the press release by the Mozambique Tax Authority but was unsuccessful.
Read the full story here:
Mozambique: North Korean Caught Smuggling Ivory AllAfrica.com
2012-10-12
North Korea-China Economic, Trade, Cultural, and Trade Expo is scheduled to be held from October 12 to 16, 2012 at Dandong City, Liaoning Province. The expo will be jointly hosted by the China Council for the Promotion of International Trade, Liaoning Provincial Committee, Liaoning People’s Friendship Association, and Dandong Municipal People’s Government.
China accounts for 90 percent of North Korea’s foreign trade. Approximately 70 percent of this trade comes through Dandong. Currently, Dandong is gaining both domestic and international attention as the construction of the New Yalu River Bridge is nearing completion and progress on the Hwanggumpyong and Wihwa Islands Special Economic Zone is advancing.
North Korea-China Economic, Trade, Cultural, and Trade Expo will provide a place for not only product exhibits but will provide consultation for economic and trade cooperation, cultural exchanges and tourism. From the North Korean side, the largest trade investment company and government agency in charge of overseas labor export will be in attendance.
Over 500 booths and sections are ready for the expo and over 5,000 participants from foreign buyers are expected to attend. Over 100 companies and a 300-member economic-and-trade delegation will be coming from North Korea.
This event was an exclusive, invitation-only event, inviting major Chinese companies with investment interest in North Korea. There were over 100 officials from 30 different state-run corporations from North Korea present at the session to provide detailed information about 50 investment projects. The participants were required to pay an entrance fee and news media were prohibited from the event.
China’s Overseas Investment Federation (COIF) and North Korea Investment Office (NKIO) signed an agreementon September 22 to jointly launch the “Special Fund for Investment in North Korea.” NKIO is an overseas investment body subordinate to the Joint Venture and Investment Committee of North Korea (JVIC).
According to a Chinese media source, both states have set 3 billion RMB (476 million USD) as the goal for the fund; but in the initial stage, 1 billion RMB (159 million USD) will be utilized first to develop urgently needed urban infrastructure facilities focusing on mining, real estate, and port industries.
North Korea’s trade with China nearly tripled over the past five years, South Korean government data showed Sunday, underscoring the isolated North’s growing economic reliance on its major ally.
Trade between North Korea and China stood at US$5.63 billion last year, up 284 percent from $1.98 billion in 2007, Seoul’s unification ministry said in a report to the National Assembly.
North Korea’s exports to China almost quadrupled to $2.46 billion in 2011, compared with $580 million in 2007, the data showed. Imports rose to $3.17 billion last year, from $1.39 billion in 2007.
The North’s main export items were coal and iron ore, while primary imports from China were crude oil, gasoline and cargo trucks, it said.
A separate story on the report which also appeared in the Korea Herald featured these additional stats:
China accounted for only 67 percent of the North’s total trading with foreign countries, also including Russia, Thailand and Japan in 2007. But the dependency rate grew to 72.9 percent in 2008 and 82.9 percent in 2010 before hitting 89.1 percent last year, the report showed.
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Annual food imports from China stood at 155,000 tons in 2008 and they have steadily grown to reach 380,000 tons for the whole of 2011, it said.
The same story had data on wages in the Kaesong Industrial Zone:
Another ministry audit report also showed that since 2004, South Korea has so far paid a total of $245.7 million in salary to North Korean laborers working in the Kaesong Industrial Complex, a joint inter-Korean industrial project in the North Korean village of Kaesong.
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The report showed that a North Korean worker in the industrial zone earns an average $128.3 every month as of the first half of this year.
The average monthly pay stood at $68.1 in 2006 before steadily growing to $109.3 for last year.
Read the full story here:
N. Korea’s trade with China nearly tripled over past 5 years
Yonhap (via Korea Herald)
2012-10-7
N. Korea’s trade with China surges due to U.N. sanctions Korea Herald
2012-10-8
