US-China Commission releases annual report

November 18th, 2016

The 2016 report of the US-China Economic and Security Review Commission has been published.

You can read it here.

The section related to North Korea can be found here (Chapter 3, Section 4)

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Uptick in North Korea’s Renewable Energy Production

November 17th, 2016

Institute for Far Eastern Studies (IFES)

In North Korea, there are now three solar-powered ferries that sail the Taedong River: the Okryu 1, the Okryu 2, and the Okryu 3.

The North Korean government’s wire service, the Korean Central News Agency (KCNA), reported on November 4, 2016: “The ferries sail between Kim Il Sung Square and the Tower of the Juche Idea, guaranteeing that citizens can travel during the rush hour. . . . These solar powered-ferries provide ferry services both to workers and for guests from home and abroad in the form of tourist and chartered services.”

According to KCNA, the three ferries were built at Ryongnam Shipyard, each weigh 45 tons, have a maximum speed of 6 knots, and can take up to 50–60 passengers.

According to Yun Hyok, the captain of Okryu 1, “the ferry is powered by the energy of sun light . . . the driving system was created with the energy and skill of our engineers. The ship can run for around 8 hours when fully charged.”

Since the 1990s, North Korea has expressed determination to achieve energy independence, with Kim Jong Un pointing to resolving electricity difficulties as being a priority back in 2011. Subsequently, in 2013, a law was introduced to encourage research and the production of renewable energy, and at this year’s Seventh Party Congress it was announced that two hydropower stations had been opened. The importance of energy independence was also emphasized at the congress. It has also been confirmed that North Korea has been pursuing a long-term plan to raise the amount of energy produced from renewable sources to 5 million kW. In order to achieve this target, the plan envisages by 2044 that wind power will provide 15 percent of total energy demand.

This plan was discovered through internal materials on display at the Natural Energy Research Centre, formed in November 2014 as a result of an order issued by Kim Jong Un to develop energy resources that do not pollute the environment.

An overseas visitor to the Natural Energy Research Centre said that “the Centre in Pyongyang has a diagram of the 30-year plan to develop renewable energy with the title ‘The dream and ideal of Natural Energy Science development’. . . . The materials there also indicate plans to train specialists in the science of ‘natural energy’ development, and plans related to the development and trial sites for wind power, geothermal energy, and solar thermal energy.”

Such plans mean that North Korea plans to develop renewable energy, in addition to building hydroelectric power plants and/or using Chinese/Russian power to deal with energy shortages. In other words, they intend to attempt to reduce their consumption of fossil fuels and develop renewable energy. Since Kim Jong Un’s rise to power, a variety of measures have been put in place and investments made to broaden the use of renewable energy.

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China building new DPRK border crossing in Jian

November 17th, 2016

While the Dandong-Sinuiju “Bridge to Nowhere” gets plenty of coverage as a symbol of a growing rift between China and the DPRK, the two countries are working to improve two other vehicle crossings along their shared border. You can see map of these two border crossings below.

manpho-rason-overview

The new Rason Bridge (Quanhe-Wonjong Bridge) has finally been completed in the north-eastern most corner of the DPRK.

rason-bridge-2016-3-19

In the Google Earth image above (dated 2016-3-19) we can see the new four-lane bridge taking shape next to the older two-lane bridge it is replacing. According to more recent satellite imagery available at Planet.com, the bridge is actually completed. This new bridge was announced in June 2014.

But the border crossing that has been off most people’s radar is the new Manpho-Jian border crossing under construction right now.

jian-border-2016-9-29

Pictured above (Google Earth): Construction of the new border crossing in Jian, China. Image date 2016-9-29. The orientation has been reversed so that north is actually at the bottom of the picture.

You can read some background information of this new border crossing in an article I wrote for 38 North in May of 2015. I also just published some follow-up information in Radio Free Asia yesterday.

This border crossing is interesting because it is the reverse scenario of what is taking place in Dandong. Here the North Koreans built a new Yalu River Bridge and Customs House (completed in 2012), but the Chinese have only begun construction of reciprocal border infrastructure this year.

The Chinese also built a “Free Trade Zone” at the site of the new border crossing (similar to the Goumenwan Trade Zone in Dandong) in 2012-2013, though it has not yet opened for business. Additionally buses of Chinese tourists are crossing the border to visit Manpho in the DPRK’s Jagang Province, but it is unclear if any regular commercial traffic has already started using the route. Despite the light use of the new bridge, the new border has not officially opened (scheduled to open in the spring of 2017).

Looking at the new satellite image above we can see that a new “gate-shaped” customs house is under construction at the terminus of the new Yalu/Amnok River bridge. On either side of the customs office new buildings are under construction. Just north of the bridge we can see the completed “free trade zone” (in the center of the picture) and what appears to be a shipping warehouse nearing completion (on the right side of the picture).

UPDATE: In YTN coverage of my report in RFA, they offered recent pictures of the new Chinese border buildings in Jian:

jian-bldg-1-ytn

jian-bldg-2-ytn

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North Korea exporting sand, gravel and coal to China from Sinuiju

November 15th, 2016

Benjamin Katzeff Silberstein

An interesting example of how the transition from state-owned to private enterprise impacts the workings of certain firms. Daily NK:

North Korean ships from Sinuiju, North Pyongan Province are reportedly exporting in excess of 100 tons of sand and gravel into China each day.
“Shipping firms from Sinuiju are earning foreign currency through contracts with private Chinese construction businesses. The North Korean authorities are supporting the operations after receiving orders to finance the export of coal and sand to China. They are also providing wages and food for the workers,” an inside source from North Pyongan Province told Daily NK on November 11.
Additional sources in North Pyongan Province corroborated this information.
The source added that although the city’s shipping industry was originally a state enterprise, that is no longer the case. The industry is now run by private enterprises that deal with the domestic and Chinese markets. When the operations were state owned, there were chronic shortages of capital and sailors were forced to use sub-standard vessels. The regime’s new policy – to let the industry rehabilitate itself through benign neglect – has allowed the businesses to revitalize themselves. By exporting sand across the Yalu River into China, these businesses have earned enough capital to purchase better vessels. A number of enterprises and the associated infrastructure has grown as a result.
“As the volume of sand exported continues to rise, the shipping companies are inducing more service providers and factories to participate in the industry. The Anju Country 105 Sand Factory collects sand from the Chongchon River and transports it by way of the Yalu River to the shipping firms,” the source added.
When asked about the scale of the trade, she noted, “Sinuiju Harbor sees a daily influx of Chinese boats that carry away more than 100 tons of sand and gravel. Because exports are continuing to climb, the shipping firms are using the capital to enter new industries such as coal export.”
The North Korean enterprises see sand as an inexhaustible natural resource, the source explained, adding, “The more we sell, the better quality sand we can bring in. The enterprises are doing quite well for this reason. The factory cadres are accumulating vast sums of money, and continue to look for ways to increase their profits.”
The flourishing business has also improved prospects for workers. Laborers in the sand and gravel collection factories can earn enough money to put food on the table for a family of four – with food provided to them plus approximately 50,000 KPW per month (U.S. 6.14) for extras.
“The authorities are also using the opportunity to generate propaganda about the generosity of ruler Kim Jong Un,” the source asserted.
The revitalization of the sand collection industry is a positive development from the point of view of the authorities, as all Yalu River sand enterprises are first and foremost responsible for the supply of Kim Jong Un’s pet construction projects, such as the Ryomyong Street Project.
“The authorities can simply sit back and relax as they receive money, supplies, and credit for the success of the sand business. This reveals that the solution to North Korea’s problems is freedom of the market,” she added.
As exports continue to increase, the donju (North Korea’s nouveau riche) have expanded the scope of their interests and investments. “First, they purchase a large boat. Next, under the pretense of being a shipping business, they start to branch off into other industries to make more money. The factories give the donju the authority to do the trading and receive 30% of the profits in return,” the source concluded.
Full article:
NK exports 100 tons of sand, gravel, & coal daily from Sinuiju Harbor
Seol Song Ah
Daily NK
2016-11-15
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New Construction and Refurbishment of Factories Producing Consumer Necessities

November 8th, 2016

Institute for Far Eastern Studies (IFES)

Seemingly taking an interest in the welfare of the public, Kim Jong Un, Chairman of the State Affairs Commission, before his visit to a soap factory, has spent the previous month visiting a medical device factory, spring water bottling facility, a ‘sovereign’ factory, and the Ryugyong Dental Hospital. On October 29, Korean Central News Agency (KCNA) reported that Kim Jong Un also toured the newly constructed Mount Ryongak Soap Factory. Of late, newly constructed or refurbished factories producing consumer necessities have featured prominently in the North Korean media.

According to the KCNA report, Kim Jong Un said while on his inspection tour that “our people must be provided with abundant and happy lives without envy. . . . Continuing to put much energy into areas that help in the creation of the material and technical foundations of industry that contribute to improving the lives of the people, the people must fully benefit from such efforts.” The KCNA report also stated that Kim said “in a few months that felt like just a couple of days ago I was here looking at a construction site, and now a large, modern, impressive facility has been fully built.”

Last June, Kim Jong Un visited the Mount Ryongak Soap factory construction site, gave it its name, and directed that it should be completed by the anniversary of the Worker’s Party foundation (October 10th). In addition, he visited the Mount Ryongak Spring Water Bottling Facility in September and ordered for normalizing increased production standards, delivering spring water produced at the right time, and standardizing and varying the color and shape of glass bottles. It was at the direction of Kim Jong Il that the Mount Ryongak Spring Water Bottling Facility opened in 2007, to supply the people of Pyongyang with water from the mountain, while Kim Jong Un is credited with having it refurbished and modernized.

Kim Jong Un also gave on-the-spot guidance at the Mangyongdae Revolutionary History Sovereign Factory. While there he said “I like the fact that we are using our own raw materials and products to make zippers. The Party’s directive to domesticate production has achieved great results.” Completed in December 1979, the factory’s products were praised by Kim Jong Il at the August 1984 Pyongyang Light Industrial Products Exhibit. In addition, KCNA reported that Kim had instructed that the factory be refurbished and modernized.

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Rice prices in North Korea fall due to harvest, imports

November 7th, 2016

Benjamin Katzeff Silberstein

Says the indispensable Daily NK:

Rice prices in some regions of North Korea have reportedly fallen by approximately 1000 KPW over the last few days. The price of rice has generally hovered around 5000 KPW per kilo since Kim Jong Un took power, but recently dropped to 3500 KPW due to an increase in supply from the harvest season and rice imports.
A Daily NK source in North Hwanghae Province reported on November 3 that the price of one kilo of rice was about 4800 KPW in the middle of last month, but has now fallen to 3500 KPW over the last few days.
“People are happy about the price drop,” she said.
“Although rice prices in the markets around the northern regions (North Hamgyong Province, Ryanggang Province) are continuing to average 5000 KPW per kilo, it’s being sold at 3500 KPW per kilo in the rural areas of North and South Hwanghae Provinces. It’s believed that this was caused by a fairly good harvest in the agricultural zones of the provinces of North and South Pyongan and North and South Hwanghae, which was better than last year.”
In North Korea, rice prices fluctuate in accordance with grain production. During the harvest season, prices tend to drop when increasing volumes of rice enter the market, most of which occurs via embezzlement channels set up by officials.
“During the harvest season, officials in charge of the farms embezzle a proportion of the rice for themselves and sell it at the market, which seems to be the reason for the recent decline in rice prices,” the source said.
In addition, public sentiment towards the change in prices also has an impact on prices. Rumors have been spreading among the residents that large volumes of rice will be donated by UN agencies, prompting vendors to try and sell their own product more quickly.
There has also reportedly been an influx of imported rice into the market, further driving up competition.
Addressing this phenomenon, VOA (Voice of America) reported that since the Kim Jong regime came to power, North Korea imported the largest volume of rice from China on record (on monthly basis) in September. According to an analysis of recordings from the Chinese General Administration of Customs by Kwon Tae Jin (director of the Center for Studies on North Korea and Northeast Asia at the GS&J Institute), the volume of Chinese grain imported into North Korea in September reached a total of 18,877 tons.
“Upon seeing the imported rice being sold in the market, local merchants have dropped their prices to try and sell all of their product. The wholesale dealers and vendors in the rice trade all seem a bit confused by the rapid fluctuations in price,” added a source in South Hwanghae Province.
However, this phenomenon may only be a temporary occurrence, as rice prices in other regions remain relatively stable. As the rice influx circulates among the other regions, it is thought that prices will stabilize.
Cho Bong Hyun, the deputy director of IBK Economic Research Institute further commented that, “the regime seems to be distributing large amounts of imported rice to placate the population, but there are issues with the sustainability of this practice. Unless the total volume of incoming rice remains steady, the price declines seen will not be sustained for long.”
Full article:
Rice prices fall to 3500 KPW per kilo due to harvest season and import spike
Seol Song Ah
Daily NK
2016-11-07
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North Korea imports large quantities of rice in September: VOA

November 3rd, 2016

Benjamin Katzeff Silberstein 

Via Yonhap:

North Korea imported the largest-ever amount of rice from China on a monthly basis in September since the launch of the Kim Jong-un regime in 2011, in an apparent bid to stabilize prices, a U.S. broadcaster, monitored here, reported Thursday.

North Korea imported 18,477 tons of rice and other grains in September, the Voice of America said, citing an analysis of data from China’s General Administration of Customs by Kwon Tae-jin, director of East Asia research at GS&J Institute in South Korea.

The September figure was about 2.7 times higher than 6,954 tons imported in October and about six times higher than 3,158 tons imported a year ago in September, the broadcaster said.

In particular, the North purchased 16,000 tons of rice from China in September, a monthly high since the start of the Kim Jong-un regime, and higher than the 14,000 tons imported during the first eight months of this year total, the broadcaster said.

Experts opined that the step is designed to stabilize rice prices at a time when the stock has hit its bottom, the broadcaster said.

“This is the time when the harvest is around the corner, and the stock is nearly exhausted,” Kwon said.

Full article:
N. Korea imports rice on large scale in Sept.
Yonhap News
2016-11-03

Discussions such as these are always complicated by the fact that for most regions, private market supply is probably far more important than whatever the PDS supplies.

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Attempts to Introduce Cutting-edge IT

November 2nd, 2016

Institute for Far Eastern Studies (IFES)

In its column from Pyongyang published on October 24, Chosun Sinbo (a North Korean newspaper in Japan) reports that using North Korean information technology, new attempts have been made starting this year to stimulate collectivistic competition.

The newspaper could not conceal its excitement saying that the aim was the global cutting edge, with efforts being the ‘National Information Technology Results Exhibition’ causing a “sensation.”

According to the report, ‘National Information Technology Results Exhibition 2016’ was held in the Three Revolutions Exhibition Hall, and was entitled “Self-strength First and the Fires of Collectivist Competition, Global Competitiveness.”

The report described the purpose of the exhibit as follows: “the units introducing and extolling the achievements of the country in IT technology and industry, showing the domestically produced, advanced information technology products will cause other units to learn and catch up, stimulating collectivist competition, and driving forward ‘our style of modernization and information technology’.”

A full 260 units displayed 1,000 products at the exhibit.

The newspaper informed readers that “in capitalist countries it is mainly companies that develop, produce and sell information technology products that participate in such exhibits; but in Korea there is a greater range of participants. . . . Beyond IT sector units, committees, ministerial and central institutions, educational and scientific research institutions, factories and other workplaces were all in attendance.”

Certificates and medals were awarded to ‘the top ten IT Companies’ and ‘top ten IT products’.

The newspaper reports that “Korea’s own OS, Red Star 3.0, based on Linux, was also named a ‘Top ten IT product’. . . . Red Star can be seen as a core product in the drive to bring in ‘our form of IT’, and is being widely used across public institutions, with it being popular among students too, who are sensitive to new things.”

Moreover, the newspaper boasted that “the OS, developed by the Red Star Research Institute, is distributed as freeware . . . realizing the push to bring information technology through collective means rather than through an economy of commodities and private ownership.”

The newspaper also expressed the hope that, “collectivist competition, characteristically socialist competition in a country aiming to development and strengthen . . . IT is the area expected to produce the fastest development, with endless leaps and innovations.”

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Push for the Development of IT Industry in North Korea

October 18th, 2016

Institute for Far Eastern studies (IFES)

North Korea is pushing the development of the IT industry. The “2016 National IT Achievements Exhibit” demonstrates the current state of affairs in the industry.

On October 5th, the official organ of the Workers Party of Korea (WPK), Rodong Sinmun, reported in detail of this exhibit. It said, “The exhibit was held under the theme of ‘self-strength-first, collective competition, and global competitiveness’.” In addition, it also reported, “The goal of the exhibit is to introduce and promote the accomplishments of the IT industry and push forward with modernization of IT technology in our own style and hold steadfast to every unit and part of science and technology as our lifeline.”

According to the news, the exhibit displayed 1,000 technical products from 260 units. There were new product presentations, discussions on the usage of products, security industry competition, and cutting-edge product exchange service, which was divided into four areas that included the IT enterprise and information security.

Units with exemplary IT—top ten IT companies, and top ten IT products—were selected based on the technical achievements and economic effectiveness.

At the opening ceremony, the Vice-Chairman of the WPK Central Committee Kim Ki Nam said, “The Party line on the science and technology is fully realized and we seized the global fortresses of cutting-edge technological sectors including IT. Now, many factories and work places of the people’s economy, enterprises have transformed to become a standard of the knowledge economy era.”

He also said, “This exhibit is an important step towards the development of globally competitive IT technology and raised the overall standard of the IT industry.” He also encouraged, “the participants to fully accept the achievements and experiences of leading units.”

Such emphasis on the development of IT can be associated with the recent reports from the Party Central Committee at the 7th Party Congress back in May, and the decision adopted by the Party Congress. According to these documents, a strong science-technology state means “a country that has reached the cutting-edge global standards in science and technology and a country where all sectors including the economy, national defense, and culture rapidly advance through the leading role played by science and technology.”

In North Korean terms, a state strong in science and technology not only encompasses IT, nanotechnology, biotech, and nuclear technologies, but also reaches global research standards in fields including machine engineering, metallurgical engineering, thermal engineering, and material engineering, (i.e., major fields of engineering), as well as the basic sciences like mathematics, physics, chemistry and biology. Furthermore, the aim is to produce and launch more working satellites in order to contribute to the construction of a ‘major space power’ with space science and technology capabilities.

In addition, a state strong in science and technology has placed science and technology as the main locomotive behind economic development to resolve essential problems of energy, steel, chemical products and food. Science and technology also plays the leading role in modernizing the economy and IT.

This means through the advancement of science and technology, it is attempting to resolve energy issues through the development of nuclear power and environmentally friendly energy. It also involves the development of technologies like Juche steel production technology (the production of steel that minimizes the use of imported fuel) in order to localize raw material and equipment production that is currently import-dependent as well as achieve modernization of light industry and agricultural production through scientific and industrial methods.

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IFES brief on geological surveys in North Korea

October 6th, 2016

Benjamin Katzeff Silberstein

On 25th September, North Korean leader and chairman of the State Affairs Commission, Kim Jong Un, issued instructions that survey equipment should be modernized and its production domesticated using the most up-to-date science and technology, in order to decisively improve geological survey work.

The Korean Central News Agency (KCNA), the North Korean government’s official newswire agency, reported on 26th September that Kim gave these instructions in a letter he sent to the Nationwide Geological Survey Department Workers Conference held at the People’s Palace of Culture on the previous day. He also stated that “Geological surveys are the core front in constructing an economically strong nation.”

In the letter, Kim emphasized the need “to create a scientific developmental strategy for the Geological Survey Department in line with the demands of constructing an economically strong nation, and this should be executed in a step-by-step fashion. Also, under the state’s unified leadership, order and discipline must be established with respect to the development of underground resources.” He went on to say, “the role and responsibility of resource protection institutions must be raised, while the state’s energy must be put into the physical-scientific protection activities of Geological Survey departments. . . . I look forward to related officials and workers bringing about a decisive improvement in geological survey work, and contribute actively to the construction of an economically strong socialist state.”

At the same time, while on a visit to the Taedong River Syringe Factory, Kim Jong Un instructed that the factory be transformed into a modernized facility.

On 23rd September, KCNA reported on Kim Jong Un’s recent on-the-spot guidance saying: “Located in the suburbs of Pyongyang, the Taedong River Syringe Factory is a large base for the production of medical equipment, having the capacity to produce a variety of syringes.”

Reminiscing, Kim also said that the factory, built in December 2000, “rose during the Arduous March, the Kanghaeng-gun Period, under direct instigation of and energetic leadership of the General [Kim Jong Il]. This was a period the enemy viciously sought to isolate us, and natural disasters meant that everyone was forced to tighten their belts.”

While at the factory, Kim Jong Un instructed that: “not only should the factory normalize a high level of production, but also completely guarantee a high level of product quality, and undertake an energetic struggle to diversify the types of syringe produced. . . . If syringe production is to be systematically raised, and different kinds of syringe and syringe needle for a range of uses are to be produced properly, there is a need to modernize the factory in line with the demands of the knowledge economy era.”

Moreover, Kim emphasized the importance of constructing a combined production system, as well as automation, and sterilization, saying: “it is the intention of the party that the Taedong Syringe Factory will become a model and standard for our country’s medical equipment production facilities by modernizing.”

In 2007, when South Korean medical aid was offered to the North in relation to North-South medical projects, the North Korean side expressed the hope that needed supplies would be given as aid, saying: “syringes, needles and cotton balls are most needed.” They even proposed that the South Korean government aid in the construction of a syringe factory, saying “a syringe is only used once.” It is a noteworthy change that North Korea has now begun producing syringes for itself.

Article source:
‘Geological Surveys’ Are Core Front in Constructing Economically Strong Nation
IFES NK Briefs, Institute for Far Eastern Studies
2016-10-06

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