North Korean Economy Watch

According to Yonhap:

Chinese travel agencies are selling tour programs to North Korea’s Mount Kumgang amid Pyongyang’s announcement that it will find a new partner in retaliation for Seoul’s reluctance to resume cross-border tours, tourism sources said Sunday.

Two Chinese agencies in the city of Tongcheng and the southern province of Guangdong are taking reservations for tour programs that include the scenic mountain and other sights, including Pyongyang, the ancient city of Kaesong and the border with South Korea.

However, it was unclear if the programs are related to the North Korea’s decision last week to dump South Korea’s Hyundai Asan for an unidentified new partner for the mountain tours. Sources in Beijing said that the link appears to be weak, as the Chinese programs had been under preparation before Pyongyang’s announcement last week.

North Korea is angry over South Korea’s reluctance to resume tours to the mountain, which had been a key source of foreign currency for the impoverished nation since 1998. They were suspended in 2008 following the shooting death of a South Korean tourist near the resort.

South Korea demands the North agree to a joint on-site investigation into the death and safety measures for tourists.

Some South Korean media reported last week that the North formed a partnership with a Chinese tour organizer to run tours to the mountain, but Seoul’s Unification Ministry said the reported partnership has not been confirmed.

North Korea’s already serious economic troubles have deepened in the wake of U.N. sanctions for its nuclear test last year, while the regime’s failed currency reform has fueled inflation, food shortages and even rare social unrest.

Meanwhile, about 400 Chinese people are scheduled to embark on a tour of key sights in North Korea. In February, Beijing formally granted permission to its citizens to go deep into the communist neighbor, lifting its previous policy of limiting tourism to the border area.

Read the full story here:
Chinese agencies sell tour programs to N. Korea’s Mount Kumgang
Yonhap
4/11/2010

By Michael Rank

Chinese tourism to North Korea seems set to boom, with groups from several provinces about to set off and Pyongyang clearly eager to earn much needed extra revenue.

Tourists are warned that they can’t bring in mobile phones and must “respect Korean customs” by avoiding getting into arguments and “not saying or doing anything which is not good for Chinese-Korean friendship”. They are also told not to aim their cameras at “things which may be seen as the dark side of life”, such as litter or people who are not properly dressed.

But demand is strong despite these restrictions, says a report from the booming, export-oriented province of Zhejiang.

The tourists are mainly middle-aged or elderly and include a large proportion of Korean war veterans, says the report, which notes how Pyongyang was devastated in the war and was the victim of 1,400 American bombing raids.

North Korea agreed to welcome Chinese tourists under an agreement signed in September 2008, but implementation was held up by bureaucracy and problems over high costs, and the doors are only opening this month, according to a report from the southern province of Guangdong. It says people are not put off by the fact that tours are quite expensive at about 5,000 yuan ($730) for five days or 6,000 yuan ($880) for six days, and applicants have to fill in plenty of forms and show their work ID and other documents.

The itinerary is much the same as for Western visitors – Pyongyang, the Myohyang mountains and Panmunjom – although in the North Korean capital the Chinese-Korean Friendship Tower is a must-see, featuring a memorial to the “martyrs” of the Chinese People’s Volunteer Army who fell in the Korean war, including Mao Zedong’s son Mao Anqing.

A total of 800 tourists from Wenzhou in Zhejiang are due to leave on April 20, as well as another group from the provincial capital Hangzhou. There are no direct flights at present, so they have to fly via Beijing, while tourists from Guangdong fly to Dalian or Shenyang and then take the train to Pyongyang via Dandong.

One Zhejiang travel agent goes so far as to say there is so much interest in North Korea that “It will become a tourism destination second only to Taiwan.”

Further tours are planned from Nanjing, Fuzhou, Jiangxi, Shandong and other cities and provinces, and border tourism is also booming, as noted in several reports on NKEW recently. According to the latest report, a tourism agreement has just been signed between the border town of Ji’an in Jilin province and Manpo, just across the Yalu river.

UPDATE: According to Yonhap:

North Korea has told four employees at a South Korean-run mountain resort to leave the communist nation within 24 hours as part of measures to freeze Seoul-held assets there, sources here said Tuesday.

The North has also sealed the key holes of entrances to five facilities and has pasted keep-out stickers, they said. The facilities were built and run by the South Korean government and its state tourism agency.

The workers, ethnic Koreans from China, had been overseeing the maintenance of a family reunion center at Mount Kumgang. The other facilities subject to Tuesday’s asset freeze included a duty free shop run by Seoul’s Korea Tourism Organization.

The North’s measures were seen as an attempt to increase pressure on Seoul to resume a joint tourism program to the mountain resort that had been an important source of foreign currency for the impoverished nation.

Officials in Seoul earlier said the freezing of assets will have little actual impact as the facilities have hardly been in use since the cross-border tours to Mount Kumgang were suspended in 2008.

Still, the measure symbolizes Pyongyang’s anger over Seoul’s refusal to resume the lucrative project that had earned the regime millions of dollars a year. It also suggests that stronger steps, such as asset confiscations, could come if the South keeps refusing.

On Tuesday morning, North Korean officials began carrying out the measure, a source said without giving any specifics.

“We will respond after we see what the freezing measure will involve,” an official in Seoul said.

The tours, which began in 1998, had been a prominent symbol of reconciliation between the rival states that are still technically at war after the 1950-53 Korean War ended in a ceasefire, not a peace treaty. Nearly two million South Koreans had visited the scenic mountain.

South Korea suspended the program in 2008 after one of its citizens was shot dead by a North Korean guard after entering a restricted area near the resort. Seoul has demanded a state-to-state guarantee of tourist safety as well as a joint on-site probe into the death before the tours can resume.

North Korea says it did everything to assure tourist safety in a deal that leader Kim Jong-il struck with the head of the tour’s main South Korean organizer, Hyundai Asan, last year.

South Korea has protested the North’s decision to freeze the five facilities which include a family reunion center, a fire station and a duty free shop.

Despite threats from the North, the government of South Korean President Lee Myung-bak has shown no signs of backing down. It also rejected the North’s demand that Seoul officials come to the resort to attend the asset freeze, and warned it would hold the North responsible if it causes any damage to resort facilities.

Since taking office in early 2008, Lee halted unconditional aid to the North, linking its resumption to progress North Korea makes in ending its nuclear weapons programs.

Amid the lack of aid from the South, North Korea’s economic troubles have deepened in the wake of fresh U.N. sanctions imposed after Pyongyang’s nuclear test last year, and the regime’s failed currency reform that worsened inflation and food shortages.

Here are some press releases from the Ministry of Unification: Statement 1, Statement 2.

ORIGINAL POST: According to the Associated Press:

North Korea informed South Korea that it will begin quitting a joint tourism project in the communist country this week, officials said Sunday, in another setback to relations between the countries.

North Korea said Thursday that it would freeze some South Korean assets at scenic Diamond Mountain, expel South Koreans working at the site and restart the stalled project with a new partner.

A day later, the North told the South that it will carry out the plan Tuesday, starting with the freezing of the South Korean government-owned assets that include a reunion center for families separated by the Korean War, according to Seoul’s Unification Ministry.

It was not clear when the North would expel South Korean personnel, according to Hyundai Asan, the resort’s South Korean tour operator that relayed the North’s plan to the South Korean government.

The North said it would freeze assets at the site while South Korean officials were in attendance, but the South has no intention of sending officials to comply with the North’s request, ministry spokeswoman Lee Jong-joo said.

South Korea halted tours to the mountain resort on North Korea’s east coast in July 2008 after a South Korean tourist was fatally shot after allegedly entering a restricted military area next to the resort.

The North had recently expressed its willingness to restart the tours, a legitimate source of hard currency for the impoverished regime. But South Korea said the North must first accept a joint investigation into the shooting death.

North Korea’s decision to quit the tour project “is the inevitable consequence entailed by the moves of the South Korean authorities to escalate the confrontation with fellow countrymen,” the North’s government-run Minju Joson newspaper said in a commentary carried by the official Korean Central News Agency on Sunday.

Relations between the two Koreas have worsened since a conservative Seoul government took office in early 2008 with a pledge to get tough with the North.

But North Korea has tried to reach out to Washington and Seoul since last summer in an about-face that analysts and officials say shows the North feels the pain of U.N. sanctions adopted to punish it for its nuclear test in May.

The DPRK wants South Korean officials present for the occasion, but the South has refused.  According to the the AFP:

Seoul on Sunday rejected Pyongyang’s demand that South Korean officials come to a North Korean resort where the communist regime is about to freeze South Korean assets, worsening bilateral ties.

North Korea wants South Korean officials present on Tuesday when it freezes the assets, Seoul’s unification ministry spokesman Chun Hae-Sung said.

However Seoul will not comply with the summons, he said.

The North last week threatened to freeze assets at the Mount Kumgang resort after pressing Seoul in vain to lift its ban on tours to North Korea, which once earned the impoverished state tens of millions of dollars a year.

The North also declared its cross-border tour business deal with South Korean firm Hyundai Asan void, threatening to find a new partner to replace it and to expel some South Korean personnel.

Seoul suspended the cross-border tours in July 2008 after North Korean soldiers shot dead a South Korean housewife who strayed into a military zone.

South Korea demands firm agreements on the safety of visitors, a joint investigation into the shooting and the North’s apology for the killing.

The North says it has already given safety guarantees.

The latest tit-for-tat reflects the deterioration in relations since the South’s conservative government took office in 2008 and took a tougher line with Pyongyang, linking economic cooperation with the North to progress on its nuclear disarmament.

The North’s official Minju Joson newspaper said Sunday the collapsing tour deal “is the inevitable consequence entailed by the moves of the South Korean authorities to escalate the confrontation with fellow countrymen.”

It accused Seoul of overturning previous agreements on resuming the tours, which began in 1998.

Nearly two million South Koreans had travelled to the North in the past decade, earning it some 487 million dollars.

North Korea is also suffering economically from tougher sanctions imposed by the UN Security Council since Pyongyang’s second nuclear test in 2009.

It says it will freeze five Seoul-owned assets — a family reunion centre, a fire station, a culture centre, a spa and a duty free shop — in the Mount Kumgang resort, but did not specify how, Seoul officials said Sunday.

The South has urged the North to reverse its decision, saying the communist state is breaching business contracts and international norms.

Pyongyang also threatens to re-examine an industrial park with the South at Kaesong just north of the border.

Some 42,000 North Koreans work at 110 South Korean-funded plants at Kaesong, which like Kumgang is a valuable source of scarce hard currency for the North.

Here is a link to previous Kumgang stories.

Read the full story here:
NKorea to start quitting joint tour this week
Associated Press
Kim Hyung-Jin
4/11/2010

By Michael Rank

The Chinese government is planning to increase tourism to North Korea as part of plans to boost tourism in China’s rustbelt northeast, according to a newly published official report (MS Word download here).

The report focuses mainly on domestic tourism, but also mentions plans for increased numbers of Chinese tourists to cross into North Korea. Tours include from Changbai county in Jilin province to the North Korean city of Hyesan, just over the border, and from Yanji and Hunchun to Bangcheon, which is also just over the border. Other tours are to include the east coast North Korean port of Rajin and Vladivostok in Russia well as South Korea and Japan. North Korea-related aspects of the 32-page report are summarised here  (both reports are in Chinese).

Incidentally in researching this article I discovered that various cross-border tours are advertised on the internet, e.g. a one-day tour from Tumen that includes Namyang-gun, the home  village of Kim Il-sung’s first wife, Kim Jeong-suk, mother of Kim Jong-il, and also the spot where China, North Korea and Russia meet. Cost: 140 yuan ($20), but we can assume they are for Chinese citizens only.

The government report says it is planned to increase the number of tourist trips from and around northeast China from 350 million to 800 million a year between now and 2015.

Andrei Lankov adds in the comments: In the borderland areas they sell a number of tours tgo NK (Chinese citizens only), with costs between 180 RMB (one day tour from either Yanji or Dandong) to 2500 RMB (four days to Pyongyang). Koryo Tours people told me that until 2009 in order to apply one had to be not merely a Chinese citizen, but a registered resident of the three north-eastern provinces. According to Koryo tours people, this restriction has been lifted, but few people from outside Dongbei are interested.

Koryo Tours brings some exciting news for those seeking to visit the DPRK–Hamhung will now be open to tourism–even US tourists. Sign up for the Koryo Tours newsletter on their web page here.

According to the newsletter:

1. Democratic People’s Republic of Korea (DPRK) drops restrictions on US tourists.
Until recently, American tourists had only been allowed into North Korea during the Mass Games for a maximum 4-night stay. Fortunately in 2010, everything has changed – we can now welcome US citizens on both group and independent tours all year around (we took US citizens on our group tours in February and March, and can confirm these changes are in effect). Check out our complete list of tours and travel options at and see what’s new!

2. Hamhung city to open to tourists
We at Koryo Tours have long prided ourselves on being the only company allowed to offer original DPRK programming, and 2010 has already proven to be a windfall. After years of continuous efforts, we are thrilled to announce our brand-new tour to Hamhung, a major industrial city on Korea’s east coast. Those on our August 7 – 16/17 Liberation Long Day Tour will be the first Western tourists to ever visit this area (again, US citizens are welcome). Our new itinerary adds a two-night Hamhung stay to the already packed ten-night schedule that includes trips to Mount Paekdu, Pyongyang, Kaesong, and other areas). Details are still in flux, but as with everywhere else, we will maximise interaction with locals and see as much as time allows. Plan on staying one night in Hamhung proper and one night at the brand new Majon beach resort, where again, no Westerners have ever been. We are now taking applications from anyone who wants to be among the first tourists in history to go to this major city and its stunning surrounding areas on either a group or independent tour. As for our returning travellers we offer special discounts, so if you were looking for an excuse to go back, this may be the trip of a lifetime for you.

3. Rajin-Sonbong/Chongjin/Vladivostok Tour
Even among the select travellers who have ventured into North Korea, Rajin-Sonbong  (Rason) remains a mystery…a remote area (even by DPRK standards) that shares a northern border with China and Russia and not possible to enter from North Korea proper.  Rason sees almost no tourists at all (literally not one western tourist in 2009!) but keeping up our tradition of breaking new ground, Koryo is preparing a 3-country, 3-time zone, 3-language tour. We start in Yanji, part of China’s Korean autonomous region, then head down to the North Korean coastal city of Chongjin, and  cross overland to Mt. Chilbo (you will be the first Western tourists to arrive there by land). After that, we head back to the free-trade zone and ride the international rail, bus and boat into Russia. We finish our tour in the jewel of Russia’s Far East, the previously closed city of Vladivostok, where travellers can either return to Beijing, fly on to Tokyo or Seoul, or even hop on the Trans-Siberian and keep going . This tour is slated for July; details are still being hammered out, but if you’re interested in seeing these mysterious, fascinating places that are as different as they are unforgettable, please contact us at info@koryotours.com

4. Centre Forward
Koryo Tours has always been more than a travel company; among other projects, we have a long history of filmmaking in the DPRK. While preparing to shoot our latest feature film, we obtained the rights to a North Korea football (soccer if you like!) movie, made in 1978 and never exported abroad – until now. Featuring DPRK film star Kim Chol, Centre Forward tells the story of a young player who reaches the first team only to see the squad hit with a crisis of confidence. Will they be able to get back to the top of their game? Remastered and subtitled with a DVD extra that interviews Rim Jong Sun the 1966 football hero who was consulted on the film. Check out the trailer at Youtube option or at  Youku option.

(Please pass this link on so we can get some viral action going!) In a World Cup year that features North Korea for the first time since 1966, this is a topical and fascinating glimpse into the sporting culture of an unknown country. For film freaks, sports fans and DPRK watchers everywhere, this is a must-see! The DVD is available for purchase at 200rmb (20EUROs) and ready in June – please contact  info@koryogroup.com for more information.

5. Korea vs. Japan Women’s Football
On May 23rd Korea DPR take on Japan in a qualifying match for the 2011 Women’s World Cup. The DPRK ladies are perennial challengers for football’s highest honours, so this should be a good game against regional (and historical) rivals Japan. Come with Koryo Tours to Pyongyang and cheer the team along with the home crowd! For information, see:
http://www.koryogroup.com/travel_NEWItinerary_0.php

6. Turkmenistan May 2010 Tour
In continuing our tradition of trips to weird and wonderful places, we are in our fifth year of tours to the Republic of Turkmenistan (next tour May 11 – 18), with an especially exciting programme. See stunning sites such as the capital city of Ashgabat (Pyongyang meets Las Vegas!) as well as ancient fortresses, giant bazaars, mega-mosques and horse racing, camp in the desert next to a giant flaming gas crater, visit the Caspian sea port of Turkmenbashi and travel by bus, plane, boat, and even horse and camel to get there. Join us on this memorable trip to a remarkable place. The ininerary is here.
[NKeconWatch: I went on this tour and recommend it!]

7. Amazing Mass Games Photos Available: Link to the website
Koryo Tours helped photographer Werner Kranwetvogel get unprecedented access to the Mass Games- absolutely sublime images- on his last trip Werner had access to the ground level but on return to Germany found his lens had a fault…and back he came to Pyongyang…but his images are testament to his drive.

According to the Donga Ilbo:

Ilyeon Investment Chairman Ahn Gyo-shik is nervous over Pyongyang’s latest moves. “I feel helpless since our company is rattled by external conditions, not our management’s ability,” he said.

The North has threatened to seize real estate owned by South Korean businessmen unless they visit North Korea for a land survey by Thursday. Ahn said he will cross the inter-Korean border with staff from the subcontractors of Hyundai Asan Corp. early Thursday morning.

Since launching a tour to Mount Kumgang in 2003, Ahn has built Kumgang Family Beach Hotel and a sashimi restaurant in the North. He has even served as a chairman of the Corporate Conference for South Korean Companies Doing Business at Mount Kumgang, a gathering of Hyundai Asan’s subcontractors.

In an interview with The Dong-A Ilbo yesterday, Ahn said the head of a conference member company recently died of a heart attack due to severe stress from his business in North Korea.

The suspension of the inter-Korean tours caused the late chairman’s company to teeter on the verge of bankruptcy, causing his death at age 55, Ahn said.

Ilyeon’s prospects are no better. Ahn has invested 14.7 billion won (12.9 million U.S. dollars) in his North Korea venture, including 13.4 billion won (11.8 million dollars) to build the hotel and additional facilities.

His company is six billion won (5.3 million dollars) in the red due to the suspension of the Kumgang tour. Its deficit slightly decreased in early 2007, but the killing of a South Korean tourist at Mount Kumgang in July 2008 by a North Korean soldier dealt another serious blow.

Since the shooting, Ilyeon has slashed the number of hotel staff from 119 (including North Korean workers) to three. Over the same period, Ilyeon’s office in South Korea has also downsized from 15 workers to four.

Ilyeon director Kim Rae-hyeon said, “Most member companies of the conference are almost bankrupt but cannot file for bankruptcy since their assets are in North Korea.”

On the North’s land survey Thursday, Ahn said, “Considering precedents and North Korea’s recent moves, Pyongyang is unlikely to make just empty threats. In the worst-case scenario, the North will confiscate assets held by South Korean companies after compensating South Korean investors with part of their investment.”

Worryingly, a Chinese tourist agency has released a six-day tour of both Kaesong and Mount Kumgang. This could encourage the North to deprive South Korean companies of their right to run businesses in the North.

Yang Mu-jin, a professor at the University of North Korean Studies in Seoul, said, “North Korea could mention Hyundai Asan’s underpayment of 400 million dollars as grounds to freeze assets held by South Korean companies. The North could also freeze the properties of South Korean companies, force them to recall their staff, annul existing contracts, and sign contracts with new companies.”

Other experts, however, say the North is unlikely to confiscate South Korean companies’ assets or deprive them of their exclusive right to do business.

For Thursday’s survey, Hyundai Asan said yesterday that 52 staff from 33 companies such as Hyundai Asan, its subcontractors, Korea Tourism Organization and Emerson Pacific will make the trip. Forty-eight workers from Hyundai Asan and its subcontractors had applied for their visit.

Shim Sang-jin, in charge of Mount Kumgang affairs for Hyundai Asan, will lead the group. The group will board a bus in Seoul and pass through the Customs, Immigration and Quarantine Office in Goseong County, Gangwon Province, around 9:40 a.m. Thursday.

Officials of the tourism organization will head for the North today.

And from the Choson Ilbo:

South Korean officials on Monday duly presented themselves at North Korea’s Mt. Kumgang resort after the North last week threatened to confiscate any real estate held by South Koreans unless they turned up for a survey.   

Three Korea Tourism Organization officials including its Mt. Kumgang branch chief Cha Dong-young went to North Korea through the east coast checkpoint in the afternoon.

Cha claimed the officials “are going to North Korea to conduct our own survey one day before the North’s planned survey” because the KTO has a considerable amount of property in the Mt. Kumgang area. “We’re visiting the North in a cool-headed way. We just hope that tour programs will be normalized as early as possible through dialogue between the two governments,” he added.

North Korea has become increasingly frantic to resume the lucrative tours as hard currency flow dried up amid international sanctions and the fallout from a botched currency reform late last year. Last week’s threat is only the latest in a series of attempts to bully and cajole the South into resuming the tours, which were halted after the fatal shooting of a South Korean tourist in 2008.

The KTO officials and staff from tour operator Hyundai Asan and other South Korean firms will comply with the North’s summons on Thursday. The KTO officials will stay at least until March 31 depending on how long the process takes.

The KTO invested W90 billion (US$1=W1,138) in a cultural hall and a hot spring spa in the tourist area.

“We’ve already handed documents including floor space of facilities and investment amount over to Hyundai Asan for delivery to the North,” Cha said. “We don’t think there’ll be any worst-case scenario, but we’ll find out what the North is up to once we meet North Korean officials.” 

Sixteen staffers of Hyundai Asan and other South Korean firms are to leave Seoul around on Thursday morning and return the same day. 

Yonhap asserts that the DPRK could be laying the groundwork for Chinese operators to take over.  That probably would not be good for Chinese-South Korean relations if they take over seized assets.  Of course if the Chinese bought out the South Koreans then that would be a win-win.

Here is the original story about the assets being seized. 

Here are older posts on Kumgangsan.

Read the full story here:
NK`s Seizure Threat Rattles S. Korean Investors
Donga Ilbo
3/24/2010

S.Korean Officials Respond to N.Korean Summons
Choson Ilbo
3/25/2010

According to Yonhap:

North Korea has informed South Korea of its plan to look into all of the real estate owned by South Koreans inside the scenic mountain resort along its east coast, the South’s government confirmed Thursday, as Pyongyang apparently grows impatient with Seoul’s refusal to allow its citizens to travel there.

In a recently faxed message to the South Korean government, the North’s Asia-Pacific Peace Committee, a state agency in charge of cross-border exchanges, said, “South Korean figures who possess real estate in the Mount Kumgang district should come to Mount Kumgang by March 25,” according to the Unification Ministry, which deals with inter-Korean affairs.

The North went on to say, “All assets of those who do not meet the deadline will be confiscated and they won’t be able to visit Mount Kumgang again.”

An inter-Korean tourism program to the mountain, once a cash cow for the impoverished North, has been suspended since the summer of 2008, when a female South Korean tourist was shot dead by a North Korean soldier while traveling there. A luxury hotel, a golf course, and other facilities built by the South Korean conglomerate Hyundai there have since remained idle. A similar joint tour business to the ancient city of Kaesong, just north of the two Koreas’ border, has been also halted.

North Korea, feeling the pinch of U.N. sanctions imposed for its missile and nuclear tests, has called for the South to immediately resume the tours.

In its statement issued March 4, the North Korean committee said, “We would open the door to the tour of the Kaesong area from March and that of Mount Kumgang from April.”

It said it may revoke all accords and contracts on the business unless the South stops blocking the resumption of the joint ventures.

South Korea has urged the North to first fully guarantee the safety of South Korean tourists. Related working-level talks between the two sides last month failed to yield a deal due to differences over details on a security guarantee.

The Unification Ministry expressed regret over the North’s latest threat.

“North Korea’s measure violates agreements between South and North Korean authorities, as well as between their tourism business operators,” the ministry said in a press release. “It also goes against international practice.”

It stressed the North should abide by accords with the South, and all pending issues should be resolved through dialogue.

“As the tours to Mount Kumgang and Kaesong are issues directly related with our people’s safety, there is no change in the government’s existing position that it will resume them only after the matters are settled,” it added.

Meanwhile, the head of the South Korean operator of the tours offered to resign to take responsibility for snowballing losses from the suspended businesses.

Cho Gun-shik, president of Hyundai Asan Corp., expressed his intent to step down in a statement emailed to all staff earlier Thursday, company officials said.

The Choson Ilbo has more:

In the message, North Korea said, “From March 25, North Korean authorities and experts will conduct a survey of all South Korean assets in the presence of South Korean officials concerned,” including Hyundai Asan staffers, who have assets in the area. “All South Koreans with real estate in the Mt. Kumgang area must report to the mountain by March 25,” it added.

According to the ministry, Hyundai Asan signed a lease with the North for a plot of land in Mt. Kumgang until 2052. South Korean firms have invested a total of W359.2 billion (US$1=W1,134), including W226.3 billion from Asan, in a hotel, a hot spring spa, a golf course, and a sushi restaurant there. The South Korean government owns a meeting hall for separated families opened in 2008 that cost more than W60 billion to build.

Nonetheless the threat is likely to fall on deaf ears. A South Korean security official said, “The North apparently wants South Korean firms that are in danger of losing their assets in the North to put pressure on the government, but the government won’t back down.”

A South Korean businessman operating in the Mt. Kumgang region said, “The North is threatening to seize our firms’ real estate there while talking about attracting large amounts of foreign investment. What South Korean or foreign business will make new investments in the North under these circumstances?”

Read the full stories here:
N. Korea threatens to seize S. Korean assets at Mount Kumgang
Yonhap
3/18/2010

N.Korea Ramps Up Threats Over Mt. Kumgang Tours
Choson Ilbo
3/19/2010

According to Yonhap:

The chief of Hyundai Asan Corp., a South Korean firm that runs tours to North Korea, expressed his intention to step down on Thursday to take responsibility for failing to resume the inter-Korean tour business.

“(I) couldn’t settle them even after running to revive tours (to Mount Kumgang and Kaesong) and normalize business,” Hyundai Asan President Cho Kun-shik said in an e-mail sent to company employees. “I thought taking clear responsibility for results as a president was critical for the firm and the business”.

He intends to resign after a shareholder meeting scheduled for next Wednesday.

Hyundai had been operating tourism projects to the scenic Mount Kumgang on North Korea’s east coast and Kaesong, the ancient capital of the Goryeo Dynasty (A.D. 918-1392).

Cho, a former vice minister with the Ministry of Unification, took the company’s helm in August 2008, a month after tours to the famed mountain resort were suspended following the shooting death of a South Korean woman in the area. Visits to Kaesong were stopped in December of the same year.

He took office vowing to reopen the tour programs, which remain on hold as the two Koreas have yet to reach an agreement over terms for their resumption.

The postponement in relaunching the tours has prompted almost 70 percent of the company’s employees to leave the firm. “I felt regretful for not having reinstated those who had left,” Cho said.

Last week, North Korea accused the Seoul government of effectively blocking South Koreans from visiting its tourist attractions and warned it could revoke all deals covering inter-Korean tours.

But Seoul has demanded an official apology for the shooting death and a pledge that such an incident will not occur in the future, while saying a formal investigation must be carried out to determine why the shooting occurred.

As of February, Hyundai Asan suffered a loss of 257.9 billion won (US$228.1 million) in sales stemming from the travel suspension, according to the company.

Amid growing losses, the firm sold off part of its assets, previously used for the tour program, including 51 tour buses and 41 heavy vehicles.

Mount Kumgang had been a popular tourist spot for South Koreans since it was opened to them in 1998 as a symbol of inter-Korean rapprochement spearheaded by the liberal government of Kim Dae-jung at that time.

Read the full story here:
Hyundai Asan chief offers to resign over suspended inter-Korean tour program
Yonhap
3/18/2010

By Michael Rank

Chinese officials have announced plans to increase the number of Chinese tourists visiting North Korea from the border region of Yanbian 延边 and are hoping to involve South Korean airlines and to include Vladivostok on the itinerary, a Chinese website reports.

The head of the Yanbian tourism bureau, Jin Chengwen 金成文 (Kim Seong-mun), was quoted as saying they were investigating plans for tours starting in the main city in the region, Hunchun 珲春, which would take in the Russian Pacific port of Vladivostok and Baekdusan 백두산, a mountain on the Sino-Korean border that is the purported birthplace of leader Kim Jong-il, as well as tours from the North Korean port of Rajin 라진 to Pyongyang and Panmunjom.

He said he hoped Korean Air and other South Korean and Chinese airlines would become involved, but gave no details. It was hoped that Chinese tourists would not need passports to visit North Korea, he added.

Another Yanbian tourism official said there were already tours from the border town of Sanhe 三合 to the industrial city of Chongjin 청진 and Baekdusan and to Samji lake (Samjiyeon 삼지옌), a scenic spot near Baekdusan, and Pyongyang, and they were hoping to add a Rajin-Pyongyang-Panmunjom tour. “North Korea is hoping more Chinese tourists will come and tour their country,” he added.

The report said the tourism plans were connected to an agreement announced this month under which China gained the use of a pier at the port of Rajin 라진 for 10 years to help the development of the border region and give Jilin province access to the Pacific.

As NKEW reported last year, Chinese officials are also talking about cruises from Hunchun to the North Korean port of Raseon 라선 (Rasŏn/Naseon/Nasŏn) (which somewhat confusingly seems to be the same as Rajin), Sokcho 속초 in South Korea, just south of the DMZ, and Vladivostok.

North Korea is also hoping to attract tourists from southern China, and has cast its eye on Guangdong province as well as Shanghai.

Also see “China to Offer Railway Tours to N.Korea” in the Choson Ilbo:

A new train service is being offered in China for tours to North Korea. One news website based in China’s Zhejiang Province reported on Wednesday that a large travel agency in the region will offer railway trips from Hangzhou to Sinuiju from April 20.

The trains have 14 sleeper carriages and can transport 800 passengers. They pass Beidahu in Hebei Province and Dandong, Liaoning Province before arriving in Sinuiju, where Chinese passengers will transfer to a North Korean train and embark on an 11-day tour that includes stops in the border truce village of Panmunjom, Mt. Myohyang and the childhood home of former North Korean leader Kim Il-sung. The tours will cost 5,280 yuan for first-class compartments and 4,680 yuan for regular ones.

“Until now, people in Zhejiang Province visited North Korea by flying from Hangzhou either to Beijing or Shenyang and transferring to trains,” said a spokesman for the tour agency. “But the train tours are both cheaper than existing options and offer more sightseeing stops including Beidahu and Dandong, so more than 300 people have signed up already.” China halted tours to North Korea in February of 2006 but decided to start them again this year.

Chinese tourists will not be able to bring mobile phones into North Korea and will also be banned from carrying cameras with zoom lenses and face restrictions on traveling alone in the communist country.

Finally, more information on Chinese tourism has been published in the Donga Ilbo:

Tours of North Korea for Chinese tourists resuming next month have started to be sold in Beijing and Guangdong province, the China Daily said yesterday.

Five to six licensed tour agencies are recruiting Chinese tourists for travel in North Korea in mid-April. As many as 200 people from Beijing alone will visit next month, the daily said.

A few tour packages are up for grabs. A Chinese state-run travel agency is offering a six-day package and a three-day package. For both, tourists will travel by plane but must do so via Hangzhou, Beijing, the North Korean capital of Pyongyang, and Shenyang, so two full days will be needed to get to and from North Korea.

The three-day package is a brief visit to Pyongyang and costs 3,380 yuan (495 U.S. dollars). The six-day tour costing 6,280 yuan (920 U.S. dollars) covers many parts of North Korea. Tourists will visit the day after their departure Mansudae Grand Monument and Chollima Statue in Pyongyang. From the third day, they will go to Panmunjom in Kaesong, beaches in Wonsan, Mount Kumgang, and then back to Pyongyang.

The six-day package could also include a tour to Mount Myohyang. Tourists can also choose to attend a performance celebrating the birthday of North Korea’s late leader Kim Il Sung April 15.

The tourists will also receive a long list of “don’ts.” They will be banned from making noise, mimicking Kim’s postures in front of his statue, and commenting on North Korea’s leaders, politics, military and economy.

Another big no-no is the taking of photos on the trip from Shinuiju to Pyongyang, streets and markets, and images conveying a negative impression of the communist country.

Tourists also must call South Korea “South Korea” instead of the Republic of Korea. They will also be required to leave at immigration offices mobile phones, products with the South Korean or U.S. flag and other symbols of these nations on them, and magazines with open covers upon entering North Korea.

The list also says few public phones are on North Korean streets, adding tourists can make phone calls only at hotels for 16 yuan (2.30 dollars) per minute.

According to Yonhap:

North Korea threatened Thursday to revoke its contracts with [Hyundai Asan] for tours to its Mount Kumgang unless the Seoul government agrees to quickly resume the tourism program that was suspended two years ago, following the shooting death of a South Korean tourist.

Officials from South and North Korea held a fresh round of talks early last month, but failed to reach an agreement on measures that will ensure the safety of South Korean tourists traveling to the communist nation.

…

“If the South Korean government continues to block the travel route while making false accusations, we will be left with no choice but to take extreme measures,” an unidentified spokesman for the North’s Asia-Pacific Peace Committee said in a statement carried by the country’s official (North) Korean Central News Agency.

The spokesman added such measures will include the nullification of contracts with South Korea’s Hyundai Asan for the mountain tour program.

Yonhap notes that Seoul is demanding an official apology for the death of the female South Korean tourist in 2008.  In the past, however, Seoul has made multiple demands to the DPRK for resumption of Kumgang Tours. The South Korean government does not plan to allow tourists to return to Mt. Kumgang until the DPRK:

1. Cooperates in an investigation of the shooting of a South Korean tourist last year.

2. Implements measures to prevent a recurrence.

3. Guarantees tourist safety.

4. Provides more transparency about how it spends the money it receives from the Kumgang resort.

Accordong to Yonhap, the DPRK is willing to implement No. 3.