North Korean Economy Watch

According to Xinhua:

Maritime authorities in China and the Democratic People’s Republic of Korea (DPRK) on Wednesday launched their first joint patrol on the Yalu River, located on the border of the two countries.

The action, aimed at maintaining navigation order along the river, was conducted by Maritime Safety Administration of Dandong City, China’s northeastern Liaoning Province, and its counterpart in DPRK’s P’yonganbuk-do.

Three vessels from China and two vessels from the DPRK inspected about 92 km along the river and cleared ships and fishing boats hindering the normal flow of ships around the river’s Dadong Port, according to the Dandong Maritime Safety Administration.

In April this year, maritime authorities of the two countries signed a cooperative agreement on the management of the Yalu River. In the agreement, the two sides vowed to conduct joint patrols and rescue on the river.

Read the full story here:
China, DPRK launches first patrol on Yalu River
Xinhua
2011-6-15

According to the New York Times:

The United States Navy intercepted a North Korean ship it suspected of carrying missile technology to Myanmar two weeks ago and, after a standoff at sea and several days of diplomatic pressure from Washington and Asia nations, forced the vessel to return home, according to several senior American officials.

Washington made no announcement about the operation, which paralleled a similar, far more public confrontation with North Korea two years ago. But in response to questions about what appears to be a growing trade in missiles and missile parts between North Korea and Myanmar — two of the world’s most isolated governments — American officials have described the episode as an example of how they can use a combination of naval power and diplomatic pressure to enforce United Nations sanctions imposed after the North’s last nuclear test, in 2009.

It was a rare victory: a similar shipment of suspected missile parts made it to Myanmar last year before American officials could act. Despite the Obama administration’s efforts to squeeze North Korea with both economic and trade sanctions, there are continuing reports of sophisticated missile technology exchanges, some of it by air, between North Korea and Iran, among other nations.

North Korea, aware that shipments leaving the country are under increased scrutiny, has found a profitable trading partner in the authoritarian government in Myanmar.

The extent of that trade is unclear to American intelligence agencies. Two years ago, Secretary of State Hillary Rodham Clinton publicly expressed suspicions that Myanmar was attempting to purchase nuclear weapons technology, but it recently said it was too poor to use such technology. And the evidence has been scant at best. (In 2009, India inspected a North Korean ship that was believed to be carrying equipment for a nuclear reactor to Myanmar, but quickly discovered that its contents were legal.)

The most recent episode began after American officials tracked a North Korean cargo ship, the M/V Light, that was believed to have been involved in previous illegal shipments. Suspecting that it was carrying missile components, they dispatched a Navy vessel, the destroyer McCampbell, to track it.

“This case had an interesting wrinkle: the ship was North Korean, but it was flagged in Belize,” one American official said, meaning it was registered in that Central American nation, perhaps to throw off investigators.

But Belize is a member of the Proliferation Security Initiative, an effort begun by President George W. Bush’s administration to sign up countries around the world to interdict suspected unconventional weapons. It is an effort that, like the military and C.I.A. drone programs, Mr. Obama has adopted, and one of the rare areas where he has praised his predecessor.

According to American officials, the authorities in Belize gave permission to the United States to inspect the ship.

On May 26, somewhere south of Shanghai, the McCampbell caught up with the cargo ship and hailed it, asking to board the vessel under the authority given by Belize. Four times, the North Koreans refused.

As in the 2009 case, which involved the North Korean vessel the Kong Nam 1, the White House was unwilling to forcibly board the ship in international waters, fearing a possible firefight and, in the words of one official, a spark “that could ignite the Korean peninsula.” Moreover, the Americans did not have definitive proof of what was in the containers — and a mistake would have been embarrassing.

“There is always a chance that the North is setting us up for a raid that they know will find nothing,” one official said. “So we want to make sure we don’t fall into a trap.”

By happenstance, a group of senior officials from the Association of Southeast Asian Nations — including a representative from Myanmar — was in Washington while the slow-speed chase was occurring 8,000 miles away. On May 27, when the group visited the Old Executive Office Building opposite the White House, Gary Samore, the president’s top nuclear adviser, addressed the officials, urging Vietnam, Thailand, Indonesia and Malaysia to fully join the nonproliferation effort.

He then surprised the Asian officials by telling them he had a “sensitive subject” to raise, and described the American suspicions, providing the group with a picture of the ship on its way to Myanmar. He reminded them that under United Nations Security Council Resolution 1874, which was passed in response to the North Korean nuclear test in 2009, its vessels are to be inspected if “reasonable grounds” exist to suspect that weapons are being exported.

“The Burmese official in the room protested that we were making accusations,” said one American official familiar with the exchange. Myanmar, formerly known as Burma, has denied stockpiling missiles or buying parts from North Korea. It repeated those denials during recent visits to the country by a midlevel State Department official and by Senator John McCain.

American officials dismiss those denials, pointing to years of evidence of missile-related purchases during both the Bush and Obama administrations. But they concede they are mystified about Myanmar’s motives. The missiles that they believed were aboard the M/V Light have a range of about 350 miles, meaning they could hit parts of India, China, Thailand or Laos — all unlikely targets.

The message apparently got across. A few days later, long before approaching Myanmar, the cargo ship stopped dead in the water. Then it turned back to its home port, tracked by American surveillance planes and satellites, and suffering engine trouble along the way.

And according to the Wall Street Journal:

Under pressure from the U.S. and other countries, a North Korean vessel called the M/V Light turned around in the South China Sea two weeks ago and returned to the North last week, U.S. and South Korean officials said Monday.

Among the countries that agreed to apply pressure was Myanmar, a previous destination for North Korean weapons, a senior U.S. official said. Some reports said the North Korean ship was bound for Myanmar, but the U.S. official, Gary Samore, special assistant to President Barack Obama on weapons of mass destruction, said its final destination wasn’t clear.

“It was headed for the Straits of Malacca, which would have required it to pass between Malaysia and Singapore,” Mr. Samore said. “Since we had alerted the Singaporean and Malaysian authorities, there might have been concern [in Pyongyang] whether it could pass through the straits without action by either of those countries.”

The ship turned around, without the U.S. resorting to force, before reaching the straits.

North Korea’s state media haven’t reported on the latest journey of the M/V Light, keeping with a silence it maintained over previous interceptions of its weapons-ferrying ships and planes.

The incident is unlikely to change the fundamental standoff between North Korea and other nations over its nuclear-weapons program. The U.S., China and other countries have tried to lure North Korea back to the so-called six-party talks, in which Pyongyang has been encouraged to give up its nuclear pursuit in exchange for economic incentives and security guarantees.

Mr. Samore said the multilateral cooperation is a signal to North Korea that other nations remain committed to enforcing the trade limitations set forth by the U.N. Security Council several weeks after Pyongyang tested a nuclear weapon in 2009.

…

U.S. officials in late May began tracking the M/V Light, and a U.S. Navy destroyer intercepted it on May 26 and followed it down the Chinese coast for several days. Meanwhile, American diplomats won agreement from several southeast Asian nations to stop the ship if it attempted to make port.

U.S. officials also discussed the M/V Light with North Korean officials several times via the North’s U.N. delegation, a so-called back channel the two countries use because they don’t maintain official diplomatic relations.

“The North Koreans claimed the ship was going to Bangladesh with a cargo of industrial chemicals,” Mr. Samore said. “We have no way to verify whether any of that was true. And we had good reason to be suspicious with this ship, which in the past has been involved in the export of weapons to [Myanmar] and other locations in the Middle East.”

Read the full stories here:
U.S. Said to Turn Back North Korea Missile Shipment
New York Times
David Sanger
2011-6-12

North Korea Keeps Silent on Ship’s Turnaround
Wall Street Journal
Evan Ramstad
2011-6-14

Here is the press release from the UNSC:

Security Council
6553rd Meeting (AM)

SECURITY COUNCIL EXTENDS UNTIL 12 JUNE 2012 MANDATE OF PANEL OF EXPERTS

HELPING MONITOR SANCTIONS ON DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

The Security Council this morning extended the mandate of the Panel of Experts helping monitor sanctions on the Democratic People’s Republic of Korea for an additional year, until 12 June 2012.

Acting under Chapter VII of the United Nations Charter, the Council unanimously adopted resolution 1985 (2011) maintaining the current mandate of the group that it established in June 2009. At that time, the Council also condemned a nuclear weapons test conducted by the East Asian country and toughened the sanctions regime on it, calling for stricter inspections of cargo suspected of containing banned items related to the country’s nuclear and ballistic missile activities, and tightening the arms embargo and financial restrictions. (See Press Release SC/9634)

Through today’s text, noting the importance of credible, fact-based, independent assessments, analysis and recommendations from the Panel, the Council also presented the group’s reporting and consultation requirements. It urged all States to cooperate with the Panel and the sanctions regime.

The meeting began at 10:10 a.m. and ended at 10:14 a.m.

Resolution

The full text of resolution 1985 (2011) reads as follows:

“The Security Council,

“Recalling its previous relevant resolutions, including resolution 825 (1993), resolution 1540 (2004), resolution 1695 (2006), resolution 1718 (2006), resolution 1874 (2009), resolution 1887 (2009) and resolution 1928 (2010), as well as the statements of its President of 6 October 2006 (S/PRST/2006/41) and 13 April 2009 (S/PRST/2009/7),

“Recalling the creation, pursuant to paragraph 26 of resolution 1874 (2009), of a Panel of Experts, under the direction of the Committee, to carry out the tasks provided for by that paragraph,

“Recalling the 12 November 2010 interim report by the Panel of Experts appointed by the Secretary-General pursuant to paragraph 26 of resolution 1874 (2009) and the 12 May 2011 final report by the Panel,

“Recalling the methodological standards for reports of sanctions monitoring mechanisms contained in the Report of the Informal Working Group of the Security Council on General Issues of Sanctions (S/2006/997),

“Noting, in that regard, the importance of credible, fact-based, independent assessments, analysis and recommendations, in accordance with the Panel of Experts’ mandate,

“Determining that proliferation of nuclear, chemical and biological weapons, as well as their means of delivery, continues to constitute a threat to international peace and security,

“Acting under Article 41 of Chapter VII of the Charter of the United Nations,

“1. Decides to extend until 12 June 2012 the mandate of the Panel of Experts, as specified in paragraph 26 of resolution 1874 (2009), and requests the Secretary-General to take the necessary administrative measures to this effect;

“2. Requests the Panel of Experts to provide to the Committee no later than 12 November 2011 a midterm report of its work, and further requests that, after a discussion with the Committee, the Panel of Experts submit to the Council its midterm report by 12 December 2011, and requests also a final report to the Committee no later than 30 days prior to the termination of its mandate with its findings and recommendations, and further requests that, after a discussion with the Committee, the Panel of Experts submit to the Council its final report upon termination of the Panel’s mandate;

“3. Requests the Panel of Experts to provide to the Committee a planned programme of work no later than 30 days after the Panel’s appointment, encourages the Committee to engage in regular discussions about this programme of work, and further requests the Panel of Experts to provide to the Committee any updates to this programme of work;

“4. Urges all States, relevant United Nations bodies, and other interested parties to cooperate fully with the Committee established pursuant to resolution 1718 (2006) and with the Panel of Experts, in particular by supplying any information at their disposal on the implementation of the measures imposed by resolution 1718 (2006) and resolution 1874 (2009);

“5. Decides to remain actively seized of the matter.”

Previous reports by the Panel of Experts can be found here and here.

The North Koreans produced a two-part documentary on Kim Jong-il’s recent visit to China which was aired on North Korean television.  In part one of the documentary, we can see some video images of the office aboard Kim Jong-il’s train.  His large wooden desk, which he does not seem to use for friendly/informal meetings, is at the head of the room with comfortable leather chairs along the sides.  There is a door on the back wall which provides access to another room on the train cart — I assume a private office or other personal area.  The floors appear to be made of polished wood.  On the desk, there is a framed photo and maybe an couple of ashtrays?  Most noticeably there is a large flat-screen television mounted on the wall above Kim’s desk.

Part I of the documentary was too long for me up upload to Youtube, but the segment aboard the train is here.

Part II of the documentary is here.

Below is a decent image of what many believe is Kim Jong-il’s train parked outside the Kim family compound in Ryongsong-guyok, Pyongyang (룡성구역, 39.110716°, 125.788507°, Google Maps)

Pictured above (Google Maps): The Wonjong Bridge and route traveled by Chinese drivers from the border to Rason

UPDATE 6 (2011-6-15): Here is a great news video of the Chinese driving tour:

Click image to watch video at YouTube

UPDATE 5 (2011-6-10): Barbara Demick writes in the L.A. Times:

No doubt the most attractive part of the package for China is the access to the port in Rajin, part of a larger special economic zone known as Rason. In 1860, China’s weak Qing dynasty signed a treaty that ceded a long strip of coastline to Russia, leaving Chinese Manchuria landlocked. The use of the port in Rajin makes it easier to transport raw materials from the resource-rich region of northeastern China to the industrial hubs in southern China. In December, the Dalian-based Chuangli group, which had spent $3.6 million renovating the port, shipped 20,000 tons of Manchurian coal through the North Korean port to Shanghai.

“It is faster and cheaper to ship through North Korea’s port than to use the railroads,” said a businessman who was in Rajin this week as preparations were underway for the groundbreaking. “Everybody in Rajin is very excited about what the Chinese are doing. They think it will bring jobs.”

UPDATE 4 (2011-6-9): KCNA coverage of the Hwanggumphyong ground breaking ceremony also mentioned developments in Rason:

The [Hwanggumphyong] ceremony was followed by announcing the start of the reconstruction of the Rajin Port-Wonjong road, ground-breaking ceremonies of Athae Rason Cement Factory and the Rason, DPRK-Jilin Province, China High Efficiency Agricultural Model District and departing ceremonies of Chinese domestic freight transit transportation via Rajin Port and private car tourism as the first phase projects for the start of the joint development of the zone.

UPDATE 3 (2011-6-10): China’s Global Times reports on the Chinese business tour:

The first self-drive tour from China to North Korea started on Thursday, with around 100 tourists setting off from Changchun, Jilin Province, to Rason, North Korea, China News Service (CNS) reported.

A total of 24 vehicles carrying around 100 travelers including well-known entrepreneurs, officials with the Changchun Tourism Bureau and provincial government took part in the tour, according to a staff member surnamed Wang with the publicity department of the China Youth Travel Service (CYTS) Tours Corporation Jilin Branch, which organized the tour.

“We’ve spent more than a month preparing for the activity. We sent invitations to tourists and negotiated with the Rason government,” Wang told the Global Times on Thursday.

The tour will last from June 9 to 11, and the cost for each tourist was more than 1,000 yuan ($149), an anonymous staff member with the executive office of the CYTS Tours Corporation Jilin Branch told the Global Times on Thursday.

After assembling at the Changchun Exhibition and Conference Center on Thursday morning and identifying each car with a number, the tourists began their journey at 7 am and planned to reach Hunchun, the border city in Jilin Province that leads to North Korea, in the afternoon, according to the CNS report.

“The 24 vehicles were all provided by the tourists themselves, but we have dispatched a car to lead them and they were all given interphone sets in case some of them fall behind,” she told the Global Times on Thursday.

After passing through Hunchun, the tourists will reach Rason district and tour guides dispatched by the Rason government will lead them to visit Rajin Port and Rajin Bay.

There, they will be able to enjoy children’s performances and also visit local scenic spots, according to the staff member with the executive office of the CYTS Tours Corporation Jilin Branch.

“There were so many people who called to ask about this activity, so I believe we will organize a second tour in the near future,” she told the Global Times.

The North Korean government plans to develop Rason, located in the border area between China and North Korea, into an international economic zone. At the end of May, the North Korean government allowed Chinese tourists to make the self-drive trip to Rason to enjoy its scenery, according to CNS.

“Allowing self-drive tours from China to North Korea means a lot to both countries, because it will increase the interaction and enhance mutual understanding between the two peoples, and consequently, enhance friendly relations between the two countries,” Yang Zhenzhi, a professor at the School of History and Culture (Tourism) with Sichuan University, told the Global Times, adding that the decision will also help to boost economic ties between the two countries.

UPDATE 2 (2011-6-4): According to an earlier report in the Donga Ilbo a “groundbreaking ceremony” for the Rason area will also take place Thursday (June 9).  No doubt this will take place just before the convoy of Chinese investors crosses into the DPRK.  According  to the article:

Sources in China`s Yanbian Autonomous District in Jilin Province and Dandong in Liaoning Province said Friday that the groundbreaking ceremony for the special district in Rason Special City will be held Thursday and that for the development of Hwangkumpyong in the Yalu River near Shinuiju will come Tuesday.

UPDATE 1 (2011-6-6): The news out today indicates that, as earlier reported (see original post below), a convoy of Chinese investors will travel the new road from Wonjong to Rason to explore investment opportunities.  There are a few interesting differences between the time the story was originally published (in April) and today:

Firstly, and the least interesting point, the “investment convoy” is about nine days behind the original schedule. Originally the convoy was to depart for the DPRK on June 1.  The convoy now appears to be departing on June 9.

Secondly, the convoy appears to be operated by a different Chinese tour company.  Back in April the convoy was being coordinated through the Sanjiang International Travel Agency in Hunchun.  The convoy departing this week, however, is run by CYTS Tours.  I do not know enough about either of these businesses to speculate on treasons for the last minute switch in partners.

Thirdly, the cost of the trip has increased significantly.  In April the Sanjiang Travel Agency said the trip would cost 680 Yuan.  Now CYTS Tours says the cost will be 1450 Yuan per person, and the convoy size will be limited to 30 vehicles.

Here is the most recent report in the Donga Ilbo:

Chinese nationals can start traveling Thursday to Rason, a free trade zone in North Korea`s northeastern region, with their own cars for three days.

This is in line with the development plan linking the Chinese cities of Changchun, Jilin and Tumen that the Chinese government is promoting, China’s Xinhua News Agency said Friday.

For starters, the service launched by CYTS Tours will begin with fewer than 30 cars. Travel costs will be 1,450 yuan (224 U.S. dollars) per person, including lodging and eating. Whether anyone has applied remains unknown, however.

People who will start from Changchun Thursday will drive 500 kilometers to Hunchun in Yanbian Korean Autonomous Prefecture and then enter North Korea through the maritime customs at Quanhe. After crossing the Tumen River, they will go through immigration procedures at the customs office in the North Korean village of Wonjeong-ri and then go to Rason through a Hunchun-Rason road under construction.

The travelers will tour the port of Rajin and then tour Rajin Bay by boat. They will watch a children’s show and visit Sea Village and Wang Hai Guo, where the late founder of North Korea Kim Il Sung visited.

A source at CYTS Tours said, “The product was designed as a part of the (Chinese) government’s travel development plan for Changchun, Jilin and Tumen.”

ORIGINAL POST (2011-4-4): According to the Choson Ilbo:

North Korea is reportedly allowing Chinese motorists to drive to the special economic zone of Rajin-Sonbong so they can look around for investment opportunities there.

A spokesman for Sanjiang International Travel Agency in Hunchun, China on Friday said a group of Chinese motorists will tour Rajin-Sonbong and Duman near the North Korean-Chinese-Russian border under an initiative by the Tourism Bureau of Jilin Province on May 31-June 1. Sanjiang specializes in travels to the lower reaches of the Duman (Tumen) River in North Korea and Russia.

The two-day trip will cost 680 yuan (approximately W115,000) per person.

The Sanjiang staffer said small groups of Chinese motorists have gone to Rajin-Sonbong before, but this is the first large-scale trip organized by the Jilin provincial government and the first time tourists are visiting Duman.

The aim is apparently to lure Chinese investors to Rajin-Sonbong. Early this year, the North agreed with Hunchun city to build a large recreation center and park in its special economic zone.

Back in March 2008, the North allowed South Korean motorists to travel to the scenic Mt. Kumgang resort, but only four months later the tours were suspended after a South Korean tourist was shot dead by a North Korean soldier.

Related historical information:

1. Bridge on China-North Korea border being renovated (2010-4-13)

2. DPRK-China border bridge opens (2010-6-23)

3. Who uses Rajin’s Ports? (2010-5-23)

4. Rason port facilitates intra-China coal distribution (2011-1-4)

Read the original stories here:
China to allow nat`ls to travel to Rason, N.Korea, by car
Donga Ilbo
2011-6-6

Chinese Motorists to Tour N.Korean Investment Zones
Choson Ilbo
2011-4-5

DPRK Public Trial Video

There is a video on YouTube (via South Korean television) that purportedly shows a public trial that took place last April in Sinuiju (RFA). The trial took place in the Sinuiju central Square:

There is an (increasingly hard to find) older video of a public trial in Hamju County (함주군) which clearly matches the satellite imagery. You can see the video here.  The stadium where it was filmed is here.

Kim Jong-il’s Only Televised Speech in the DPRK

In an earlier “Friday Fun” post, I linked to a parody of Kim Jong Il’s only televised speech in the DPRK.  Here is his actual and only speech!

Kimchi Dog

For the dog lovers: I thought this clip of a North Korean dog carrying a kimchi bucket near Kim Il-sung square in Pyongyang was cute.

DPRK No 2 Happiest Country?

A Chinese blog post, picked up by the Shanghaiist, went viral this week.  The story:

China is the happiest place on earth(!!) according to a new global happiness index released by North Korea’s Chosun Central Television. China earned 100 out of 100 points, followed closely by North Korea (98 points), then Cuba, Iran, and Venezuela. Coming in at 203rd place is America (or rather “the American Empire”, 美帝国), with only 3 happiness points. South Korea got a measly 18 points for 152nd place.

Frankly, I don’t think most North Koreans would believe this story if they saw it on television.

I tried to learn more, but the source material is proving difficult to locate. There is no mention of the “study” in KCNA.  I have also gone through my archives of recent North Korean television footage and I am unable to locate the broadcast.  Does anyone know when the original video clip was aired?

For what it is worth, Freedom House just ranked the DPRK as the country with the world’s worst human rights record (again).

Did the DPRK Get a New Yacht?

While scouring new imagery of Wonsan on Google Earth, I noticed that a port, holding what many believe are ships for elite use, seemed to be +1 yacht.  Both are about 48m long.  The two pictures above are dated 2002-11-11(left) and 2009-10-3 (right). It is possible that the second yacht was moved from another location.  In 2009 the sale of two yachts to the DPRK was detected and halted.

New Google Earth Imagery of the Kumgang Resort

We can now see all the properties that the DPRK has “seized” from Hyundai-Asan: Family Reunion Center,  Kumgangsan Hotel, Mokranwon Restaurant, Kumgang Golf Course and more!

Institute for Far Eastern Studies (IFES)
2011.05.26

On May 23, the DPRK released the “Outline of DPRK-China Joint Development Plan for Rason and Hwanggumpyong Economic and Trade Zone” consisting of detailed blueprint of two countries’ recent bilateral joint development deal.

According to Yonhap News, China and North Korea are planning to turn the Rason and Hwanggumpyong areas into a comprehensive industrial complex of tourism and manufacturing producing automobiles, mobile phones, agricultural and chemical products.

In addition, the Law on Rason Economic and Trade Zone and the Special Law on Hwanggumpyong Zone will adopt market economy principles which will permit foreign bank investments and independent contracts between corporations and workers. Although the development plans are not definite yet, it is significant since it hints at North Korea’s shifting position on opening up and economic development.

The bilateral development plan between Pyongyang and Beijing will stretch from Rajin, Sonbong, Ungsang, to Gulpo areas.

In the Rajin area, four major industrial complexes will be constructed consisting of storage, logistics and distribution centers, state of the art technology, and equipment, clothing and food manufacturing. In the Ungsang area, comprehensive a wood processing complex will be built while in the Gulpo area, a high-efficiency agriculture zone will be constructed. In the Sonbong area, truck manufacturing factories will be built along with other metal producing factories. In Rajin, docks will be built for ship building and maintenance.

There are also plans of developing the Rason area into an international tourism zone. There are immediate plans to build basic tourism infrastructure such as hotels, resorts, and roads for sightseeing. The long-term goal is to build a grand Northeast Asia tour course, which will include Yanbian of China; Rason, Chongjin, Mount Chilbo and Mount Kumgang of North Korea; Vladivostok and Sakhalin of Russia; Sapporo and Nakata of Japan; and Sokcho and Busan of South Korea.

As for the Hwanggumpyong area, four major industrial complexes will be established: one each for information, tourism and culture, modern protected agriculture, and food processing. More specifically, Hwanggumpyong will connect information between Hwanggumpyong and the border city of Dandong in China. In addition, culture and tourism will be developed through promotion of Arirang and other cultural performances and exhibitions.

As for the high-efficiency agriculture zone, a modern agriculture technology research center will be established and China-DPRK joint markets will be set up to serve as a central commerce center.

To assist with the industrial development in the area, land and sea routes will be developed where roads and railroads will be built and Rajin will be upgraded to a comprehensive and multi-purpose port.

There are additional plans of constructing a coal power station to replace the current thermoelectric power plant in Sonbong. There is also discussion of possibly developing other alternative energy plants, such as wind and solar. There are also plans of building basic facilities of mobile telecommunication to promote international communication.

Hwanggumpyong is an island on the Yalu River and the new developments in building ports and roads along with distribution network, Internet, and mobile telecommunication will become a link connecting North Korea with China.

Pyongyang is pursuing development through multiple cooperation channels. It has plans of establishing three-tiered cooperative system with joint management committee, joint development management committee and investment development corporation with Beijing. These committees will be responsible for amending and negotiating any issues that may arise during the process of development and supervise various areas of investments, enterprises, and environment and as well as inspect land and commerce development and basic facility operations.

Both Pyongyang and Beijing will attract foreign investments through market-based tax and financial policies in the Rason and Hwanggumpyong zones. Specifically, tax refund policy will be implemented and tariffs will be lifted from any imported equipment and materials necessary for production. The foreign investment companies will be allowed to choose their own banks or even establish financial institutions to assist in their business management.

In addition, workers and companies will be permitted to sign their own labor contracts. The companies will be granted autonomy in hiring and firing, pricing, bankruptcy, liquidation and other business practices based on market principles.

As for investment protection policy, foreign investors will be permitted to transfer or inherit profits and assets and foreign investor’s investments and assets will not be collected as national property by North Korea.

According to the Daily NK, motorcycles, computers, and “big dogs” have replaced the rice cooker and wristwatch as the cutting edge status symbols among North Koreans.

According to the article:

In today’s North Korea, where wealth inequality is growing more and more extreme, what is a symbol of upper class income status? Just a few years ago, the answer was a branded South Korean rice cooker, the ‘Cuckoo’. So much so, indeed, that the brand name has totally usurped the dictionary description, ‘pressurized electric rice cooker’, altogether.

However, according to a new interview with a cadre from an enterprise in Chongjin published in the new, June edition of NK Vision, the most potent recent symbols of a wealthy family are motorcycles, notebook computers and military dogs!

“Nowadays in Chongjin, transport agents are being stationed here and there because of motorcycle accidents. There are usually around three motorcycle accidents per day, and people are losing their lives,” the cadre explained.

The majority of the motorcycles ridden in North Korea are Chinese brands such as Jangbaeksan costing around 2,000-3,000 Yuan (with 1 Yuan worth 400 North Korean won). Meanwhile, even second-hand versions of Japanese brands including Yamaha and Honda cost considerably more than 5,000 Yuan.

The cadre continued, “The bicycle is still the basic means of transport, as it has been until now. But the bicycle is now just a really ordinary means of transport; it is no longer a symbol of wealth.”

A notebook computer is another symbol of economic good health. Among other reasons, this is because in random inspections by the North Korean authorities they check computers, and since notebook computers can be hidden easily, they are enjoying great popularity.

The source explained, “On average, computer checks crop up once every two or three months, and since this happens without warning, we cannot get rid of things like foreign movies or Korean songs. Seeing these checks getting more serious, nowadays notebook computers are the most popular thing.”

Big dogs are, similarly, growing in popularity, even though one dog can cost as much as 100,000 North Korean won, or more than 50kg of rice. According to the cadre, there is sound logic to this, too.

“Affluent households need dogs to deter thieves, and a military dog can be raised for around seven years then it leaves meat to the house,” he explained.

Yesterday, Martyn Williams informed us about the DPRK’s juche laptop!

Read thee full story here:
Motorcycles and Notebook Computers
Daily NK
Kim So-yeol
2011-5-26

Pictured above (Google Earth): Komsan Station in Hyesan

According to Open Radio:

A source in Yanggang province reported May 4th, “A Hyesan – Pyongyang train derailed on May 2nd somewhere in the region of Geomsan station in Hyesan killing at least ten passengers and injuring many others.” The injured are being treated at a nearby hospital but the dead have not been formally identified and are yet to be transferred home.

“The North Korean police and security agencies are both investigating the case,” said the source. “So far they have been unable to establish the incident’s cause.” They are said to be investigating the possibility that a track sleeper became unhinged.

The possibility, however, that this is not merely an accidental occurrence is raised by the fact that the Pyongyang – Hyesan line is known by the population not just to be a route used by citizens travelling between the cities but is also one of national significance.

There are both a security agency detention center and a munitions factory in the Geomsan area of Hyesan. Before he died Kim Il-sung travelled only via station number 1 at Geomsan.

Five of twelve passenger carriages were overturned when they became disconnected from a connecting link. Subsequent repair operations have caused much disruption to regular line service. Stranded passengers are staying in the station’s vicinity as locals take advantage of the situation, catering to them with impromptu vending operations.

Read the full story here:

Ten Die in Pyongyang – Hyesan Rail Incident
Open Radio
2011-5-6

According to the Hankyoreh:

China is stepping out into the Pacific through the gates of North Korea’s Rason Special District. North Korea, which has been declaring its aim of creating a “strong and prosperous nation by 2012,” is actively welcoming the move from China.

A number of sources, including officials with the Jilin Province government in China, reported that a groundbreaking ceremony is to be held on May 30 for a highway linking the North Korea cities of Wonjong and Rason, bordering directly on Quanhe in Hunchun, Jilin Province. A number of leaders from both countries are scheduled to attend the ceremony, which is to take place in Rason (Rajin-Sonbong), North Korea.

A Chinese official working on preparations for the project said in a recent interview with the Hankyoreh that the event would be “an occasion for declaring North Korea-China economic cooperation and North Korean openness to the world.” The official added that dozens of officials from the Chinese central government would be attending, including a number of leaders.

The construction effort is a signal announcing the opening of Rason and large-scale economic cooperation between North Korea and China. In addition to the groundbreaking ceremony for the highway, which is to be a major channel tying North Korea and China together economically, efforts to develop China’s Rajin Harbor and transport large amounts of coal through it are beginning in earnest.

The Rason development effort is taking place according to China’s “blueprints” in everything from the planning to investment and management. Local sources said that China and North Korea have already formed a special joint steering committee for the district, and that it has been decided that the chairman will be from China.

The Rason urban development plan jointly drafted by China and North Korea includes the development of international freight brokerage, export processing, and financial regions. According to a North Korean video, models for the plan include Dalian and Tianjin, which Kim Jong-il inspected in 2010 during a visit to China.

An official with the Yanji city government said, “North Korea is also aware that keeping its doors closed will only lead to death, but it is concerned that the regime will be destabilized if it opens up all at once, so it plans to first open up Rajin and develop it as a ‘test region.’”

“They are adopting the Chinese model, learning from China about legislation, taxes, and benefits to lure businesses,” the official added.

The effort is being pursued promptly, in contrast with previous North Korea-China economic efforts, which tended to amount to little more than words. The reason for this is that the central governments in Beijing and Pyonyang are directly taking care of economic cooperation through the medium of Rason’s development.

A Chinese government official reported that Chinese Minister of Commerce Chen Deming traveled to North Korea to sign a memorandum of understanding, and that China and North agreed on a plan for joint investment in and administration of Rason’s highway, port, and industrial park construction. The official added the Chinese Prime Minister Wen Jiabao personally signed policy documents upgrading Hunchun to a special economic district in line with the Rason development plans.

Meanwhile, North Korea formed an office in its central government to directly administer Rason Special City, replaced old officials who failed to make progress with Rason’s development over the years, and sent in young officials from the central government, including Rason Special City secretary Im Kyong-man, sources reported.

China needs the Rason development to ensure the success of its current national development plan for Changchun, Jilin, and the Tumen River basin, while North Korea decided to cooperate with China to address its economic problems and stabilize its succession framework. Analysts say North Korea hopes to tout successful development of Rason as an achievement of Kim Jong-un.

The development project is proceeding in a very specific and far-reaching way. “This is Korean land, but the industrial complex is being operated as Chinese and will hire North Korea workers to earn foreign currency” for North Korea, said an official with a Chinese company in charge of a large-scale construction effort in Rason.

The electricity shortage issue, which had previously been a major stumbling block to investment, has been resolved by China. A source in Hunchun said, “Plans are being examined to either send surplus power from Hunchun’s thermoelectric power plants to Rason, or for a company in Jilin Province to retrofit an old Soviet crude oil plant in the Sonbong region into a coal-burning power plant.”

Even Chinese officials have been astonished at the active measures from Pyongyang. A Rajin representatives’ office opened in downtown Yanji, the seat of the Yanbian Korean Autonomous Prefecture, is hard at work drawing in investment.

“If Chinese investors want to take a look at Rason, they can drive their cars in for themselves with an invitation from the Rajin representatives,” explained a source in Yanbian.

In the border city of Hunchun, money and people have begun shifting toward the North Korean side. Construction of 500 apartments for Chinese people working in Rason began in late March, according to officials at a construction company commissioned to carry out the project. Capital and labor investment for the Hunchun-Rason highway construction is coming entirely from China, and a number of the roughly 500 Chinese workers needed to begin have already arrived in Rason with six-month passes issued by North Korea. Large Chinese corporations such as Changli, Shangdi Guanquan Investment, and FAW are known to be undertaking investment in Rason.

According to the Korea Herald:

Despite its reputation as one of the most closed nations in the world, North Korea is, at least partly, opening up to market economy conventions, evident in its effort to cultivate its specially designated economic zone.

North Korea designated Raseon the country’s first free trade zone, as a “special city” in January 2010. The city, which borders both China and Russia, was dubbed a free trade zone along with nearby Sonbong in 1991, even though foreign investment never materialized.

In recent years, the North has tried to reinvigorate the trade zone, signing an accord with Russia to restore railways that could help rejuvenate the port there. Russia invested 140 million euro ($202 million) in the Rason project in late 2008.

In recent months, North Korea appears to have initiated a media campaign for Rason, beckoning foreign investors as Pyongyang struggles to resuscitate its moribund economy, according to informed sources and media reports.

According to a source familiar with North Korean affairs, the city has seen both new factories built and upgrades of previous ones.

A couple of large Chinese companies have also reportedly signed deals on either providing construction parts or investments in the region’s resources development.

Chinese commerce officials from the central government and the nearby Jilin Province have also reportedly held talks with their Pyongyang, Rason counterparts regarding such business transactions.

The city is also becoming more urbanized, according to sources. Apartments and road construction repairs are sprouting, while the number of daily logistics traffic across the nearby North Korea-Chinese border has nearly doubled to some 200 trucks in late April, compared to some 100 trucks just three months ago.

The North Korean leader Kim Jong-il recently traveled to the city, a move that analysts see as underlining the regime’s desire to promote the trade city to lure foreign investment.

The KCNA reported on April 22 that Kim visited the city’s Rajin Shipyard where he was briefed on different processes of shipbuilding. There he highlighted the importance of the shipbuilding industry and urged for the introduction of new production technology.

It was the first time that the North’s tightly controlled media reported the name of the shipyard and Kim’s visit there. Known as one of three major shipyards in North Korea, the Rajin Shipyard is believed to have built warships and submarines, according to sources in Seoul.

Increasing media reports from North Korea on Rason also seems to back claims that the country is putting its weight behind the city.

On April 19, the KCNA filed a profile report on Rason’s tourism industry, touting its historic relics, cultural facilities and fantastic seascape “and introducing tourist hot spots in and near the city.

In an earlier, March 30 report, the KCNA said that the city has adopted “a preferential tariff system” for foreign investors and traders.

“Choe Kwang-nam, an official in charge of economic cooperation of the Rason City People’s Committee, told the KCNA that the zone provides favorable business conditions to foreign investors through the preferential tariff system,” it said.

“Foreign investors and businesses are allowed to conduct diverse economic and trade activities and have a free choice of investment forms and business,” it quoted Choe as saying.

Read the full stories here:

N.Korea’s Rason Special District could open country to China
Hankyoreh
Park Min-hee
2011-5-4

Investment, projects seemingly brim in N. Korea border city
Korea Herald
2011-5-4