Chinese investment in the DPRK

June 13th, 2014

Stephan Haggard posted some interesting information on Chinese investment in the DPRK. See his posts here and here.

In this graph, Dr. Haggard breaks down the Chinese investment data by year and industry:

registered-investments-in-China-by-industry

It is worth noting that the graph only sums the number of registered projects, not the value of the investments. Based on satellite imagery and trade data, I think we can make a strong case that the mining sector would be the area receiving the largest infusion of Chinese investment inflows.

Dr. Haggard also shows that most Chinese investment flows into the DPRK originate from the provinces along its border:

china-investment-in-dprk-by-province

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North Korea encourages completion of large-scale projects to coincide with 2015 Party Foundation Day

June 12th, 2014

Institute for Far Eastern Studies (IFES)
2014-6-12

North Korea is attempting to complete the construction of a large scale stockbreeding base and a power plant as symbols of “self-rehabilitation” by October 10, 2015 to coincide with the 70th anniversary of the foundation of the Worker’s Party of Korea (WPK). Adorned with these economic achievements, next year’s Party Foundation Day will seek to inspire confidence in the North Korean people and strengthen the foundation of the Kim Jong Un regime.

The Choson Sinbo, a news affiliate of the pro-North Korean General Association of Korean Residents in Japan, published an article on June 2, 2014 which introduces the Sepho County area of Kangwon Province and the current situation of construction at the stockbreeding complex, reporting that “all construction is planned to be completed by next year’s Party Foundation Day.” Sepho Tableland Construction Company, which began construction of the Sepho County stockbreeding complex toward the end of 2012, is a national company propagandized by Kim Jong Un as the “Great Plan for the Transformation of Nature.”

The construction of the North Pyongan Chongchon River Power Plant, another one of North Korea’s large scale projects, began in January 2013 and is also projected to be finished by next year’s anniversary. Secretary of the Worker’s Party of Korea Kim Ki Nam was quoted at an April 10, 2014 Pyongyang mass rally, saying, “We must magnificently complete the Chongchon River Power Plant and Sepho County Stockbreeding Base by the Party’s 70th anniversary as a proud gift to our motherland.”

The Chongchon River Power Plant and the Sepho Tableland have been chosen as the two main tasks to be completed in celebration of next year’s anniversary of the foundation of the WPK. The news outlet of the Worker’s Party, the Rodong Sinmun, pointed out in a May 11, 2014 article that the Chongchon River Power Plant will help alleviate the nation’s electricity shortage and stand as a symbol for the nation’s “self-rehabilitation spirit.”

In the past, North Korea has revealed new buildings and symbolic structures before and after major anniversaries in order to brighten the public mood; however, the Kim Jong Un regime’s decision to undertake two large-scale construction projects and finish them both by the anniversary date is worthy of attention.

North Korea is expected to raise their agricultural production goals based on the successful completion of the Sepho Tableland and Chongchon River Power Plant. In his letter to the National Conference of Agricultural Subworkteam Leaders in February 2014, Kim Jong Un stated, “From the year 2015, when we will greet the 70th anniversary of the founding of the Workers’ Party of Korea, [the agricultural sector] must hit higher grain production targets.”

Coinciding with the projected agricultural increase, the Choson Sinbo reported that production of livestock will also increase with the completion of the Sepho Tableland: “Annual meat production is expected to increase in stages, from five thousand tons in 2017 to ten thousand tons annually by the year 2020.” Provided that these two large-scale projects can be completed according to plan and produce successful results, it is expected that Kim Jong Un’s position within the Party will be strengthened considerably.

As much as the Sepho Tableland and Chongchon River Power Plant give confidence to the North Korean people that their food shortage problem is being solved, it is also assumed that Kim Jong Un will use the success of these projects in order to begin a legacy of his own “achievements.”

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Some western tourism numbers

June 12th, 2014

According to Reuters:

While the country does not publish tourist numbers, travel agencies estimate as many as 6,000 Westerners visit the country every year, compared to just 700 a decade ago. Most are adventure-seekers curious about life behind the last slither of the iron curtain, and ignore critics who say their dollars are propping up a repressive regime.

Beijing-based Koryo Tours, one of the biggest operators sending Westerners into North Korea, has seen a tenfold rise in business in the past decade, peaking at about 2,100 visitors in 2012, according to Simon Cockerell, its general manager.

Around a quarter of those, Cockerell said, were American.

Troy Collings of Young Pioneer Tours, another China-based foreign travel agency specialising in trips to North Korea, says his company is seeing business double annually, and had nearly 1,000 clients in the past year.

Read the full story here:
Isolated North Korea a visitor draw, but sometimes literally a tourist trap
Reuters
James Pearson
2014-6-11

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Data on Kaesong’s cumulative performance

June 12th, 2014

According to Yonhap:

Cumulative production of the inter-Korean industrial park has come to US$2.3 billion as the most salient outcome of rapprochement between the Koreas marks its 10th anniversary of operations this week, the unification ministry said Thursday.

The joint factory complex in the North Korean border town of Kaesong opened a decade ago following the first inter-Korean summit meeting in 2000, in which their leaders adopted a joint declaration calling for closer cooperation and exchanges.

On June 14, 2004, a group of 15 South Korean groups signed contracts to operate factories in the then-newly built complex, inaugurating the era of the Kaesong Industrial Complex. In December that year, the joint complex saw its first batch of goods produced in its factories.

In the first full year of operations in 2005, annual output reached $14.9 million before jumping by more than 30-fold to $469.5 million in 2012, according to the unification ministry.

But yearly output nearly halved last year from 2012 after Pyongyang suspended operations of the Kaesong complex for five months from April amid inter-Korean tensions. The figure rose to $168.1 million in the first quarter of this year.

The value of inter-Korean trade through the park came to an accumulated $9.45 billion, according to the ministry.

A total of 940,000 people have visited the inter-Korean economic zone, with 125 South Korean firms currently operating in the complex designed to match deep-pocketed South Korean companies with cheap North Korean labor.

Among the firms, 73, or 58.4 percent, are textile firms, while another 24 firms are machinery or steel makers. The complex is also home to 13 electronics makers and 9 chemicals firms, the ministry noted.

The Kaesong complex also saw the number of North Korean workers grow from around 6,000 in 2005 to 52,000 as of recently, along with monthly salary more than doubling from $50 to more than $130.

Although this story reports salaries of $130, a separate story released just a couple of days ago claims the monthly incomes are just $70. I am not sure why the discrepancy.

Read the full story here:
Cumulative output of Kaesong park reaches US$2.3 bln
Yonhap
2014-6-12

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German firm to set up in Kaesong Zone

June 10th, 2014

According to the Wall Street Journal:

A German industrial needle maker will open an office in the joint inter-Korean industrial complex inside North Korea, South Korea said Tuesday.

The move will mark the first non-Korean business entity inside the plant but falls short of Seoul’s goal to bring in manufacturing operations from foreign companies to help ensure North Korea doesn’t unilaterally close the complex again.

The plant was shuttered for five months last year after Pyongyang withdrew its labor force during a sharp escalation in threatening rhetoric. Seoul officials in recent years have mulled over the possibility of attracting foreign companies, which they say would help the factories run without interruption.

Seoul’s Unification Ministry, which handles inter-Korean affairs, said Groz-Beckert, a maker of industrial needles and other tools for textile manufacturers, will open a sales office inside the facility, located a few miles north of the border. The ministry didn’t specify a schedule.

Here is coverage in AFP.

Here is coverage in Voice of America.

Read the full story here:
German Firm to Open Sales Office Inside North Korean Complex
Wall Street Journal
Jeyup S. Kwaak
2014-6-10

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DPRK detains third American: Jeffrey Edward Fowle

June 10th, 2014

UPDATE 6 (2014-6-30): KCNA (see also here) reports the following:

Suspicions about Hostile Acts by American against DPRK Confirmed

Pyongyang, June 30 (KCNA) — The Korean Central News Agency made public the following report on Monday:

The relevant organ of the DPRK has made investigation into American tourists Miller Matthew Todd and Jeffrey Edward Fowle who were detained while perpetrating hostile acts after entering the territory of the DPRK.

According to the results of the investigation, suspicions about their hostile acts have been confirmed by evidence and their testimonies.

The relevant organ of the DPRK is carrying on the investigation into them and making preparations for bringing them before court on the basis of the already confirmed charges.

Contact with an official looking after consular affairs, treatment, etc. in the course of investigation are being made in line with the laws of the relevant country.

Here is coverage of the announcement in the Wall Street Journal,

Reuters offers this helpful summary of related events:

HAPHAZARD LEGAL SYSTEM

North Korea’s haphazard and inconsistent legal system makes it difficult to predict the outcome for the detained tourists.

It has detained and then released other Americans in the past year, including Korean War veteran Merrill Newman, whom it expelled last December after a month-long detention based on accusations of war crimes related to his service history.

Australian missionary John Short was arrested in February this year for leaving copies of bible verses at various tourist sites during his stay. Short, 75, and Newman, 86, were released on account of their advanced age and health condition, state media said in the wake of published confessions from the two men.

Another U.S. national, Kenneth Bae, a Christian missionary who had been arrested in November 2012, was convicted and sentenced by North Korea’s supreme court to 15 years hard labor last year.

Pyongyang has detained a number of U.S. citizens in the past, using them to extract visits by high-profile figures, including former U.S. President Bill Clinton who in 2009 helped secure the release of two U.S. journalists who had secretly entered the country by crossing into the country from China.

The journalists, Laura Ling and Korean-American Euna Lee, were released after being tried by a city court in Pyongyang and given a ten-year hard labor sentence.

But North Korea has twice canceled visits by Robert King, the U.S. special envoy for North Korean human rights issues, to discuss Bae’s case.

UPDATE 5 (2014-6-8): Jonathan Cheng writes more information about Mr. Fowle in the Wall Street Journal:

Jeffrey Edward Fowle, the American citizen detained by North Korea, is a municipal road-maintenance man from southwestern Ohio with a globe-trotting past.

Mr. Fowle, who was arrested by North Korea after arriving for a tour on Apr. 29, is a 56-year-old resident of Miamisburg, Ohio, a city of about 20,000 residents on the outskirts of Dayton. He attends church in nearby West Carrollton, Ohio, and repairs streets for Moraine, Ohio, population 6,307.

But Mr. Fowle’s small-town roots belied a keen interest for the wider world. Before venturing into North Korea, Mr. Fowle made regular trips to Russia with his wife and traveled to war-torn Sarajevo in early 1997, less than a year after the four-year siege of the Bosnian city was lifted.

Timothy Tepe, a Cincinnati lawyer who represents Mr. Fowle’s family, said Mr. Fowle wasn’t on a mission for Urbancrest Baptist Church in Lebanon, Ohio, where he attended church. Mr. Tepe didn’t immediately reply to requests for further comment.

Joseph Shihady, a pastor at Bethel Baptist Church in West Carrollton, where Mr. Fowle attended services on Sundays and Wednesday evenings, said Mr. Fowle traveled to North Korea as a tourist.

“He’s a fine fellow, and we’re praying that he’ll get home safely,” Mr. Shihady said. “We know he’s in danger, and we’re concerned for him.”

In Washington, the State Department said that it was aware of reports about a third U.S. citizen who had been detained in North Korea, but declined to offer more details.

Mr. Fowle and his Russian immigrant wife live with their three children and the wife’s mother, according to a September 2010 interview with Mr. Fowle by the Dayton Daily News.

WHIO, a Dayton-based CBS affiliate, on Saturday cited a family friend as saying that Mr. Fowle’s wife had tried to dissuade him from going to North Korea, calling it too dangerous.

During his eight-day trip to the former Yugoslavia in 1997, Mr. Fowle spent four days in downtown Sarajevo with a Muslim family whose apartment walls were scarred by shrapnel following a missile attack, according to an earlier interview Mr. Fowle gave to the Dayton Daily News.

Nearly two decades later, Mr. Fowle finds himself at the center of a diplomatic tangle. Rep. Michael Turner (R., Ohio), which represents Mr. Fowle’s town, said in a statement that he was “deeply troubled” that Mr. Fowle had been held.


Late last month, North Korea sentenced a Christian missionary from South Korea, Kim Jung-wook, to a life of hard labor, following his October arrest on charges of working to overthrow the regime. Seoul had pleaded for his release.

UPDATE 4 (2014-6-6): WDNT in Ohio has some information on Mr. Fowle and a photo of him and his family.

The Christian Science Monitor has more.

UPDATE 3 (2014-6-6): Choe Sang-hun and Rick Gladstone report in the New York Times that  Mr Fowle is a “A municipal worker from Ohio on a tour of North Korea”.

The Korean Central News Agency provided no further details about Mr. Fowle but local media in the Dayton, Ohio, area said that he was a 56-year-old municipal worker in the suburb of Moraine and had a wife and three children. The website of the Dayton Daily News said the Moraine city manager, David Hicks, had described him as a longtime employee. Telephone messages left on Mr. Fowle’s home telephone answering machine and with Mr. Hicks’s office were not returned.

UPDATE 2 (2014-6-6): The Guardian reports (via other sources) that Mr. Fowle was being detained for leaving a Bible in his hotel room.

Jonathan Cheng reports in the Wall Street Journal.

UPDATE 1 (2014-6-6): According to KCNA:

American Citizen Detained in DPRK

Pyongyang, June 6 (KCNA) — American citizen Jeffrey Edward Fowle entered the DPRK as a tourist on April 29 and acted in violation of the DPRK law, contrary to the purpose of tourism during his stay.

A relevant organ of the DPRK detained him and is investigating him.

ORIGINAL POST (2014-6-5): According to Reuters:

North Korea detained another U.S. citizen in mid-May, bringing the total to three currently being held in the country, Japan’s Kyodo news agency said on Friday, quoting diplomatic sources.

The man was part of a tour group who was detained just before he was set to leave the country, according to the sources.

In April, the North said it had detained an American, Matthew Todd Miller, who had arranged a private tour of the country through a U.S. company. North Korea is also holding Kenneth Bae, a Korean American missionary who was arrested in 2012 and has been sentenced to 15 years of hard labor on charges of state subversion.

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Seoul to raise wages of Kaesong workers

June 9th, 2014

The actual headline should read “Seoul increases payments to DPRK goverment by 5% for each Kaesong worker” since it is no secret that “employees” receive little if any of their wages.

According to Yonhap:

South Korea will hike the salary of North Korean workers at an inter-Korean industrial complex by 5 percent from this month, the unification ministry said Monday.

The wage hike came after the two Koreas made the agreement about three months earlier than their usual annual wage talks for July.

The countries had annually agreed to a 5 percent wage increase in July, which starts to take effect from August, but this year’s earlier-than-usual wage hike came after the workers missed their annual hike last year due to a temporary suspension of the complex in the North Korean border town of Kaesong.

Amid worsening inter-Korean tension, Pyongyang had suspended the operations of the Kaesong Industrial Complex for five months from April.

The latest 5 percent hike in the North Korean workers’ minimum wage takes effect from their May salary, to be paid in late June, according to the Unification Ministry.

The two sides “agreed to hike the North Korean workers’ wage at the Kaesong Industrial Complex to US$70.35, an increase of 5 percent from now,” unification ministry spokesman Kim Eyi-do said in a briefing.

“So far, the minimum wage had been raised from August, but (we) decided to bring it forth by three months this year in consideration of (South Korean) companies’ opinions at the complex,” Kim said.

Citing the absence of a wage hike last year, Pyongyang had demanded a 10 percent wage hike this year.

About 52,000 North Korean laborers are employed by more than 100 South Korean companies operating in the joint factory park, a major cash cow for the communist country. Each North Korean worker receives up to $150 in monthly wages, including social benefits and overtime.

Read the full story here:
Seoul to raise salary of N.K. workers at Kaesong complex
Yonhap
2014-6-9

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4th Rason International Trade Fair (UPDATED)

June 8th, 2014

Choson Exchange has posted the marketing flyer for the 4th annual Rason International Trade Fair. I repost a larger scan below

4th-rason-trade-fair-1

  4th-rason-trade-fair-2

The 2014 flyer text is nearly identical to the 2013 flyer. All of the names/contacts/accounts/prices are identical. The only difference that I noticed was that two of the domestic phone numbers for the Rason Exhibition Corp. have changed.   Two more remained unchanged.

Here are the event details:
4th Rason International Trade Fair
Exhibition Period: August 18-21, 2014
Venue: Rason Exhibion House
Opening Hours: 9:00-17:00
Application Deadline: July 20th, 2014

Here are posts on previous Rason International Trade Fairs: 2011, 2012, 2013.

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Yanbian University seeks involvement in Rason Zone

June 7th, 2014

According to Yonhap (2014-6-7):

A Chinese university near the northern border with North Korea said Saturday it has signed an agreement to help develop a North Korean free trade zone, one of high-profile joint economic projects between Pyongyang and Beijing.

The agreement calls for Yanbian University in the Yanbian Korean Autonomous Prefecture of China’s Jilin province to train workers and provide technological and legal services to the Rason economic zone, the university said in a statement.

China reportedly agreed in late 2011 to invest about US$3 billion in developing the free trade zone in a North Korean border city of Rason, formerly known as Rajin and Sonbong. The special trade zone sits across the border from Jilin province.

North Korea and China set up a joint management committee in Rason in October 2012, but it is unclear whether Chinese projects for the economic zone have remained on track since the North’s third nuclear test in February last year.

The agreement was signed on Wednesday between Park Young-ho, president of Yanbian University, and Wang Yonggang, a director of the Rason management committee, according to the statement.

In the statement, Park said the university “will actively provide human resources, technological innovation and legal advices to build and develop the Rason economic zone.”

China has grown increasingly frustrated with the North’s wayward behavior, but many analysts believe that Beijing would not suspend all economic supports for Pyongyang because it could lead to a regime collapse in North Korea.

Read the full story here:
China university helps N. Korea develop trade zone
Yonhap
2014-6-7

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Friday fun: Pyongyang needles and “Phantom of the Opera”

June 5th, 2014

A valued reader sent in this photo from a restaurant in the DPRK:

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And the DPRK’s premier music ensemble, “The Moranbong Band” performed “Phantom of the Opera” in Pyongyang:

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