DPRK-China trade in 2014

January 26th, 2015

According to Yonhap, DPRK-China trade drops slightly in 2014:

North Korea’s annual trade with its economic lifeline, China, fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, data compiled by South Korea’s government trade agency showed Monday.

North Korea’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, according to the data provided by the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA).

The annual trade figures between North Korea and China provided a fresh sign that strained political ties between the two nations have affected their economic relations.

At least on paper, there were also no shipments of crude oil from China to North Korea for all of last year.

A South Korean diplomatic source with knowledge of the matter, however, cautioned against reading too much into the official trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

Here is coverage in the Daily NK.

I have been unable to locate the KOTRA report, but the Choson Ilbo adds this:

China’s exports to the North were down 3.1 percent on-year and its imports from the North 1.5 percent, the diplomatic source in Beijing said quoting Chinese trade statistics.

Yonhap followed up with this from a Chinese foreign ministry press briefing:

Asked about the official absence of crude oil delivery to North Korea, China’s foreign ministry spokeswoman, Hua Chunying, referred the question to “competent authorities.”

“You mentioned a specific issue concerning trade between China and North Korea. I would like to refer you to competent authorities,” Hua told reporters during a regular press briefing.

“But, I want to highlight that the economic cooperation and trade between China and North Korea are normal,” Hua said.

Yonhap also provided the following information on oil shipments from China to the DPRK:

In previous years, China’s official shipments of crude oil to North Korea had been absent for several months, particularly after the North’s nuclear tests. However, it was extremely unusual that, at least on paper, China sold no crude oil to North Korea for all of last year.

In 2014, China’s exports of petroleum products to North Korea jumped 48.22 percent from a year earlier to US$1.54 million, according to the data based on Chinese trade statistics and compiled by the Beijing unit of South’s Korea Trade and Investment Promotion Agency.

“Although final statistics show that China’s exports of crude oil to North Korea were counted as ‘zero’ in 2014, experts suggest that the possibility of China’s suspension of crude oil exports to North Korea remains low,” the agency said in a statement.

South Korean diplomatic sources in Beijing have also cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

There has been no clear indication that the 2014 trade figures reflect China’s willingness to use crude oil as leverage to press North Korea to change course in its nuclear ambition.

Yonhap (via Korea Times) also reports that anthracite exports to China are down in 2014:

North Korea’s exports of anthracite to China tumbled nearly 18 percent in 2014 from the previous year, the first annual drop in eight years, data showed Friday.

North Korea exported US$1.13 billion worth of anthracite to China last year, down 17.6 percent from a year earlier, according to data from the Korea International Trade Association.

It was the first on-year decline in North Korea’s anthracite exports to China since 2006.

The volume of anthracite exports also decreased 6.4 percent on-year to 15.43 million tons last year, according to the KITA.

Despite the drop, anthracite accounted for 39.8 percent of North Korea’s total exports to China in 2014.

According to the data, North Korea’s exports of iron ore to China plunged 25.7 percent on-year to $218.6 million last year, the smallest amount since 2010.

For lots more data on the DPRK’s international trade, see also these eight great posts:
1. North Korea-China Trade Update: Coal Retreats, Textiles Surge
2. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 1)
3. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 2)
4. Nicholas Eberstadt’s “Dependencia, North Korea Style” (I would have gone with “Our Style Dependencia”)
5. NK News on coal shipments in 2014.
6. Radio Free Asia on coal shipments.
7. N. Korea’s smartphone imports from China hit record
8. China’s exports of jet fuel to N. Korea rebounds in 2014

Read the full story here:
N. Korea’s 2014 trade with China marks 1st drop in 5 years
Yonhap
2015-1-26

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Update on the Unjong development zone

January 25th, 2015

According to the Pyongyang Times (2015-1-25):

With a series of economic development zones springing up across the country, the first cutting-edge technology development zone is to be built in Unjong Science Park in which the State Academy of Sciences is located.

As it covers a 200 hectare area near Pyongyang, it has many favourable conditions for its development.

Many projects have been planned to solicit investment since the publication of the decree of the Presidium of the DPRK Supreme People’s Assembly on the establishment of Unjong Cutting-edge Technology Development Zone in July 2014.

The development zone will be divided into information industry, biological industry, technology and engineering, materials and equipment and other sections, focusing on the development of cutting-edge technologies and products in these sectors.

An IT company, program development centre and IC production base are to be built to develop and make advanced programs and products.

The biological industry section will house developers and manufacturers of bioengineering products such as biomedicine, enzyme products, microbial agrochemicals and fertilizers and biochemical products. Concentrated in the materials and equipment section will be research centres and manufacturing bases to develop and produce laser and plasma devices, materials and other technology products.

The zone plans to establish start-ups in the fields of agriculture, stockbreeding, fruit, fish and industrial crop farming and biomass energy which have high values added.

In the development zone local businesses are mainly engaged in joint technology development with foreign partners, technology export and technology service to foreign customers.

At the moment dozens of joint technology development projects have been selected such as multiple-axis CNC compound processing lathe, scanning plasma surface heat treatment device and pollution-free washing machine. Dozens of other technology export projects have been arranged including portable digital pH meter, CNC device that can simultaneously control 15 kinds of machines, metal lithium, rubidium and cesium manufacturing technology ensuring over 99.5 per cent purity and a welding pencil without using electricity.

The 3-D virtual reality design, satellite-beamed data interpretation and geographical data system and parallel blasting method without gas exhaust are now waiting for foreign customers.

Competent scientific and technical personnel and solid material and technical foundations will provide a reliable guarantee for the zone to achieve its development goals.

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UN to provide $2 million in aid in 2015

January 24th, 2015

According to Yonhap:

The United Nations will provide US$2 million in aid to North Korea as part of its humanitarian efforts, a news report said Saturday.

The Office for the Coordination of Humanitarian Affairs, part of the U.N. Secretariat responsible for humanitarian actions, plans to deliver the financial support to its peer organizations working in the reclusive regime, according to a new report by Radio Free Asia (RFA).

The aid will be provided through the Central Emergency Response Fund (CERF), which has offered a total of $6.5 million to Pyongyang since 2011. The annual sum given to the communist state has varied each year: $5 million in 2011, $7 million in 2012 and $2.1 million in 2013.

U.N. offices based in the North decide on the spending through negotiations with the head of United Nations Development Programme stationed there. Other U.N. affiliated organizations that provide financial aid to the North include the World Food Plan, the Food and Agriculture Organization, the World Health Organization and the United Nations Children’s Fund.

The CERF plans to send $100 million to 12 countries around the world in this batch.

Syria will receive the highest amount of $30 million, followed by Lebanon with $18 million. North Korea will receive the least.

The Daily NK reports the following:

On January 27th, Radio Free Asia reported that over the past nine years, the UN has contributed 98.9 million USD in humanitarian assistance to North Korea.

The UN’s Office for the Coordination of Human Affairs (OCHA) reported the UN’s Central Emergency Response Fund (CERF) distributed 6.5 million USD overall through four different UN agencies last year, and 96.9 million USD in total between 2007 and 2014.

An additional 2 million USD for support to North Korea was contributed by the UN just in the past three months.

The UN’s Central Emergency Response Fund (CERF) began offering assistance in 2006 to those nations that were in drastic need of humanitarian support, but were not getting those needs filled by the international community.

Since that time, the 98.9 million USD sent to North Korea represents 7.4% of the UN’s overall international donations budget, which stands at approximately 1.34 billion USD.

The UN organizations currently providing assistance to North Korea include the World Food Program (WFP), the Food and Agriculture Program (FAO), the World Health Organization (WHO), the United Nations International Children’s Emergency Fund (UNICEF), and the United Nations Population Fund (UNFPA).

Read the full story here:
U.N. to provide N. Korea with US$2 mln aid
Yonhap
2015-1-24

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DPRK and FATF

January 24th, 2015

UPDATE 3 (2015-2-4): NK News picked up the Choson Sinbo piece and offered these comments:

But other regime watchers suggested that there are at least certain segments of the North Korean elite who do indeed want money laundering combated.

“There’s a cohort of DPRK businessmen who want the country to take more active steps in dealing with financial improprieties because they are losing money or opportunities,” said Michael Madden of North Korea Leadership Watch. “The DPRK leadership, particularly Foreign Minister Ri Su Yong, is thinking more long-term on this.”

And Christopher Green of the Daily NK suggested that this was an effort by the North Korean government to not only avoid sanctions, but assert its control over the domestic financial industry by cracking down on money launderers.

“The state wants to bring into its remit all those rogue financial elements that occasionally tend to fall outside the remit of the ruling coalition,” he said. “The state is in a constant battle to stay as top dog in the financial sector in a country where so much is illegal for historical and political reasons – and illegality is always exploited eventually.”

And Daniel Pinkston of the International Crisis Group suggested that the North may have its eye on its northern neighbor with this move.

“I think it will be helpful – from the DPRK perspective – if Pyongyang ever needs to plead their case with Beijing to avoid financial sanctions that include Chinese banks since they are critical for the DPRK’s international financial linkages,” Pinkston said.

Kim Chon Gyun told the Choson Sinbo that the nation’s penal code has already been revised to reflect international standards when punishing money laundering.

UPDATE 2 (2015-2-3): Yonhap reports on the recent Chosun Sinbo article:

North Korea has created a national committee on efforts to fight money laundering and terrorist financing, a senior Pyongyang official confirmed Tuesday.

The communist nation’s move came after it joined the Asia/Pacific Group on Money Laundering (APG), the Asia-Pacific arm of the Financial Action Task Force (FATF) under the Organization for Economic Cooperation and Development (OECD), last year.

“The National Coordinating Committee is an organ to guide projects to prevent money laundering and financing of terrorism,” Kim Chon-gyun, head of North Korea’s central bank said in an interview with the Chosun Sinbo. The newspaper is published by the pro-Pyongyang General Association of Korean Residents in Japan, or Chongryon.

The panel, chaired by a deputy premier of the Cabinet, involves officials from the central bank, the foreign ministry, the finance ministry, and law-enforcement authorities, he added.

The North has already revised its penal code to take punitive measures against related violations in accordance with international norms, said Kim.

In January, Pyongyang said that it sent a letter to the FATF, based in Paris, pledging the sincere implementation of an action plan to meet global anti-money laundering standards.

UPDATE 1 (2015-2-3): The Chosun Sinbo has posted an article on anti-money laundering measures in the DPRK. Here is a rough translation:

[Interview] Kim Chon-kyun, the President of the Central Bank of the DPRK, Cooperation with International Organizations for Prevention from Money Laundering and Terrorist Financing.

“Establishment of the National System for Preventing from Illegal Acts”

By Kim Ji-young, reporter from Pyongyang

Kim Chon-kyun, the President of the Central Bank of the DPRK presented, at the interview with the Choson Sinbo, the opposite stance of North Korean government against money laundering and terrorist financing as follows.

“What cannot be allowed according to institutional characteristics”

– A letter from the president of the Central Bank of the DPRK that pledged to implement plans for action for prevention from money laundering and terrorist financing was submitted to Financial Action Task Force (FATF) on Jan 1st. How has the negotiation between North Korea and FATF proceeded?

The implementing recommendations of the plans for action we pledged this time were consented at the negotiation between North Korea and Asia/Pacific Group on Money Laundering in Cambodia on September 2014.

When looking into the recommendations, it included maintaining cooperative relations such as sharing data and proceeding cooperation with organizations, joining as a member state, devising a means to sanction and to punish on money laundering and terrorist financing, reinforcing the confirmation procedure of traders, establishing financing watching and information business system including reporting surreptitious trade, joining in international agreement, assessing loca, etc. These measurements are, in a word, that we should establish national system to punish severely illegal acts like internal/external money laundering and terrorist financing.

North Korea institutionally does not allow those illegal acts.

Long before such “international standard” appeared, North Korea already set legal, organizational measurement adequate for our society to prevent from money laundering –like acts. This is specifically described on our laws and those regulations have renewed according to the need for development in reality.

It is interesting that the head of the central bank is the point man for this operation because the DPRK’s central bank does not have the authority to hold foreign currency accounts–only accounts denominated in DPRK won. It seems to me that international money laundering should also be of concert to the Foreign Trade Bank, a sanctioned entity that is responsible for managing hard currency deposits in the DPRK.

ORIGINAL POST (2015-1-24): According to the Pyongyang Times:

DPRK commits itself to anti-money laundering action plan

The Governor of the DPRK Central Bank on January 15 sent a letter to the Financial Action Task Force on Anti-Money Laundering, assuring it that the country would implement the Action Plan of International Standard for Anti-Money Laundering and Combating the Financing of Terrorism, a spokesman for the DPRK National Coordinating Committee on Anti-Money Laundering and Combating the Financing of Terrorism told KCNA on January 16.

He described this as a manifestation of the DPRK government’s political will based on its consistent stand to step up international cooperation in this field.

Recommendations of the action plan are legislative and organizational measures to criminalize and punish money laundering and financing of terrorism, and almost all of them have long been implemented in the DPRK to suit its actual conditions, according to the spokesman.

The DPRK will sincerely implement the action plan as it has pledged itself for the promotion of mutual understanding with member nations in the face of the obstructive moves of the US and some other countries that are reluctant to cooperate with the international organization, he stated.

He requested the organization to positively respond to the DPRK’s cooperative efforts as it assured in negotiations with the country.

Here is the web page for FATF. You can learn more about FATF here.

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DPRK announces investment briefing on Wonsan tourism zone

January 20th, 2015

According to KCNA (2015-1-20):

Briefing on Wonsan-Mt. Kumgang Int’l Tourist Zone to Be Given

Pyongyang, January 20 (KCNA) — A briefing on investment will be given in the DPRK in April-May to develop the Wonsan-Mt. Kumgang international tourist zone.

A number of overseas Koreans and foreign investors have expressed their deep interest in the project.

In this regard, KCNA had an interview with O Ung Gil, general manager of the Wonsan Area Development Corporation.

Noting that the participants in the briefing are scheduled to tour Wonsan City and Mt. Kumgang, the general manager said:

The Wonsan-Mt. Kumgang international tourist zone began to be developed under a June Juche 103 (2014) decree of the Presidium of the DPRK Supreme People’s Assembly.

The master plan for its development was completed, and a sectional planning and the infrastructure construction and repairing are now under way.

The development zone covers an area of 430 square kilometers, which involves Wonsan City and Popdong, Anbyon, Thongchon and Kosong counties and some parts of Kumgang County in Kangwon Province.

This area is famous for lots of historical relics, tourist resources and beauty spots, including Phyohun and Singye temples, lakes Sijung and Tongjong, Ullim Falls and Songdowon beach.

In particular, Mt. Kumgang is noted for its natural beauties of mountains and valleys and newly-built Songdowon International Children’s Camp and the Masikryong Ski Resort are enjoying great popularity.

We will carry on the development and tourism in the area at the same time through brisk exchange, and our general goal is to turn the zone into a world-level one with high service standard and capability.

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New shopping chain opens in Pyongyang

January 19th, 2015

The Choson Sinbo announced the opening of the Hwanggumbol Shop (황금벌상점) in Pyongyang last December. According to the pro-DPRK outlet, it is open from 6am to midnight.

Choson Exchange chimed in with additional information:

[Hwanggumbol Trading Corporation] managers have taken part in multiple CE workshops and have taken part in mind-mapping and team-building exercises, as well as lean startup methodology and customer needs strategies. It is fitting that the article speaks of “responding to people’s demands”, though it is then said that “the idea of loving people”, rather than “responding to their demands” is the concept they use. Its gratifying to see that some of the concepts we’ve covered in workshops are packed up in PR-conscious statements like these.

On a Women in Business workshop in Singapore last year, the businesswomen were obsessed with how retail worked elsewhere – Geoffrey recounts here how it took ages to drag them through a mall, not because they were shopping, but because they were taking notes on everything. They were extremely curious about how customers could be attracted, engaged and kept.

Back in Pyongyang, the manager of Hwanggumbol, Mr. Ryang Sung Jin, mentions that they are “prioritizing benefits for the people and their business’ goal is people’s convenience”. Clearly, these guys have found their angle, differentiating themselves quite dramatically from the competition.

NK News did a follow-up as well that was re-posted to The Guardian. The article translated much of the Choson Sinbo material that is behind a registration-wall:

The stores are located in residential streets to let the people buy groceries at their convenience. To guarantee low prices, Hwanggumbol Trading Corporation practices bulk purchasing from various producers around the country and consistently accelerates circulation of purchases and sales, it said. According to the article, some of its imported goods also enjoy tariff benefits.

However, the store’s management has kept its distance from capitalist principles, describing its operation as the “realisation of the Party’s love for the people,” drawing a line between its own interests and those of capitalist corporations.

“To put people’s interest above anything and to serve the people’s convenience are the aims of our service,” Ryang Sung-jin, the president of Hwanggumbol Trading Corporation, was quoted as saying.

Hwanggumbol Store currently runs three stores in Pyongyang and plans to expand its number of stores to 20 by spring 2015. The stores are also expanding their range of services and will be providing door-to-door delivery and sales, as well as ticketing reservations for trains and planes, the report said.

“We also know of people trying to start a chain of stores as well as dry-cleaning and delivery services in Pyongyang,” Abrahamian said. “There is definitely a generation of business people thinking creatively, asking ‘why not?’ when it comes to new ways of doing things.”

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DPRK also acknowledges Shin was in Camp 18 (unintentionally)

January 18th, 2015

On October 26, 2014, Uriminzokkiri uploaded two videos to YouTube to discredit human rights activist Shin Dong-hyuk. Video one is here. Video two is here.

Below are some notes I took from the videos (back in October). I shared them with a couple of friends, but never published them. Point number 4 seems most relevant to the news this weekend, that Shin spent time in Camp 18.

1. Shin’s father, Shin Kyong-sop (신경섭?) claims he was born in Ryongbuk-ri, Mundok County: 룡북리, 39.498574°, 125.455410°. However, this ri was made part of Chongnam District. Chongnam District was initially carved out of Mundok County in 1980. In 1998 it was abolished and reincorporated into Mundok County. However, in 1999 Chongnam District was re-established with Ryongbuk-ri and Sin-ri of Mundok County. Either Shin’s father did not know that his home village had been moved into a new jurisdiction [because he has been incarcerated and not updated], or he is reporting that the ri was part of Mundok when he was born (it was). Ryongbuk-ri is appx 67km from Tukjang (as the crow flies), where Shin’s father lives now (according to the videos). More on Tukjang below.

Ryongbuk-ri-DPRK-ATLAS Tukjang-SP-Province

2. The video asserts that Shin was born in 1980 (1:01, in video 1) and that his original name is Shin In-gun (신인근). Shin acknowledged this name, I am unsure about the birth year.

3. Shin claims he is from Oedong-ri (외동리, 39.575453°, 126.071407°) which is inside [officially unacknowledged] Camp 14. (1:37, Video 1). Camp boundaries in yellow.

Oedong-ri-GE

4. Shin’s father claims that they did not live in a political prison camp [Camp 14] (1:52, Video 1), but in Pongchang-ri (봉창리, 39.562650°, 126.077345°). Pongchang-ri is on the opposite side of the Taedong River from Oedong-ri in Camp 14, where Shin claims he is from. Pongchang-ri became part of Pukchang County in February 1984. Before that, Pongchang-ri was officially part of Kaechon County (where Camp 14 is located).

Pongchang-ri-Oedong-ri

However more importantly, Pongchang-ri is inside the former Camp 18. Shin’s father offers a photo he claims is of a six-year-old Shin in Pongchang-ri. The year would be 1986, but Camp 18 was not closed until the 2000s. So revealing that Shin lived in Pongchang-ri as a child is admitting he was in a prison camp (Camp 18)…just not the one he claims to have been from (Camp 14). So now the North Koreans and Shin can at least agree he was in Camp 18.

camp-18-outline-shin

I have posted 2010 KCTV footage of Pongchang-ri (coal mine) here which matches the satellite imagery of the site.

5. Dad says Shin went to primary school in Pongchang and secondary school in Tukjang (2:07, Video 1). But graduated from a different secondary school (“Suwon Secondary School”) and got a job in the “Suwon Pit”.  [How common is it for North Korean schoolchildren to change secondary schools? Under what conditions does this happen?]  Mr. Song Yoon-bok, chief secretary of “No Fence in North Korea,” has told me that the father did not say “Suwon” but rather “Suan,” and Uriminzokkiri misspelled it in English on the videos. “Suan” is a small area of eastern Pongchang-ri, and “Several former Camp 18 survivors now living in Seoul certainly remember the name and location…in Camp 18.” I cannot find this area on any maps, but a defector named Kim Hye-Suk identified it in this publication.

After the Suwon/Suan pit, Shin’s father claims he left home and moved to Puhung Mine in Unsan (2:53, Video 1). However when Shin was 12, (December 1992), Puhung Workers` District was incorporated into Sunchon City. It is still in Sunchon City. So his father is incorrect about the county/city that his son’s mine was in (unless Shin started working there before he was 12).

Puhung-mine-shin

Shin’s father also says that most of Shin’s injuries come from mining accidents (3:23, Video 1). As of 2015-1-17, Shin still maintains his injuries are from torture.

Also, the father does not seem surprised when he is asked about family members being “raped to death” (4:05) [Like he does when he is asked about “reward Marriage”]. I believe that even most North Koreans would have a more visceral reaction to that question. Implies more coaching.

6. According to the video, Shin’s parents live in Kalgol-dong No. 146 of Tukjang Workers’ District. 39.577267°, 126.225550°. The North Korean video footage matches satellite imagery of Tukjang Workers’ District, but not of Kalgol-dong (3:20, Video 1). Tukjang Workers’ District lies just outside boundaries of former Camp 18.

 kalgol-146-Uriminzokkiri kalgol-146-GE

7. The neighbor who discusses the alleged murder committed by Shin’s mother and brother seems to know about Shin’s “treasonous activities” in South Korea. How could she (or his father) have any idea what he is up to outside of the country unless they were coached? Also, the North Koreans are claiming that Shin’s mother and brother are guilty of axe murder! This is the second instance of axe murder in the DPRK of which I am aware (the first instance is quite famous).  How many axe murders are there in the DPRK?

8. Shin’s father says he married his second wife in 1996 and Shin was 19 then (8:18, video 1). But if Shin was born in 1980, he should only be 16 (8:26, Video 1). The math on this is pretty easy, so the fact that he got it wrong implies it could have been fabricated. Shin’s father claims the newly-married couple lived with Shin for five years (8:40, Video 1), that would be from 1996 until 2001. Shin should be 16-21 years old during this period, but according to dad’s erroneous age he would be 19-24. This would mean that he moved to Puhung Mine when he was 21 (or 24 by fathers count).

When Shin’s father states that Shin was 19 when they were married, the mother-in-law nods her head in agreement (8:31, Video 1). At 8:40, however, there is a subtle cut in the video. The reason for the cut remains unknown (more coaching?). After the cut, Shin’s step-mother says that they lived with Shin for 3 years (1996-1999). She did not correct the age error. If Shin left their home in 1999, he would have moved to Puhung Mine in 1999 at the age of 19.

The manager at the Puhung Mine claims that Shin arrived in August 2002 (1:54, video 1), so there is a gap here of approximately one year by the father’s data and three years by the step-mother’s data. The mine manager describes Shin as “burly” (4:25). Not a description I would use.

9. The video claims Shin raped 13-year old at Puhung Mine (5:31) in June 2001 (5:45). Shin would be 21 then. This is over a year before he was employed at the Puhung Mine according to the manager. Why was he there? He should have still been living with his parents in Tukjang. Why was he never arrested or tried for the crime?

Other notes:
A. Shin’s uncle is in the video. Has Shin said anything about him?
B. Shin’s father was able to remarry a younger woman? 70 vs 56.
C. Shin’s father has a nice tv and radio. Is this really his home?
D. Finally: The DPRK previously tried to discredit Shin with this written statement. This written statement claims that Shin is from Soksan-ri (now part of Tukjang–the part that matches the video footage above). Soksan-ri is not ever mentioned in these videos by name, and it is not the same area of Tukjang as Kalgol-dong. There is also additional information on crimes committed by Shin’s father which are never address in the videos. This statement also mentions a first border crossing in 2002, after which Shin was sent back to the DPRK.

Hopefully Mr. Harden can get Mr. Shin to address some of these points in a revised publication.

Addendum: For the record, I have met Mr. Shin a couple of times at events in Washington. The extent of my interaction with him has been limited to a couple of handshakes. I have never emailed him, interviewed him, or had an extensive conversation with him.

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Kim Jong-un’s new runway

January 16th, 2015

Satellite imagery of the east coast of Korea dated 2014-7-4 has recently been uploaded to Google Earth. Among the more noticeable items is that Kim Jong-un had a new runway built at his family compound in Wonsan right next to his private train station.

 Wonsan-runway-2014-3-17

Wonsan-runway-2014-7-4

In the top picture you can see a small helipad (where Dennis Rodman landed) which was torn down to make way for a runway,  approximately 560m in length. The new runway should be able to accommodate small aircraft and helicopters. Although Kim Jong-il favored trains, the North Korean media has shown Kim Jong-un traveling by car, boat (military and yacht), and plane (even sort of flying one).

Last summer Kim’s guidance tour schedule seemed to suggest he was spending much of the time in Wonsan. With a runway like this, he will presumably be able to get around the country more easily from his “summer home”. Maybe in future satellite imagery we will get a view of his personal craft on the runway!

This was picked up by Radio Free Asia.

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New apartment construction in Sinuiju

January 14th, 2015

Chaeha-sinuiju-apartments

Pictured above (Google Earth: 2014-8-6): New apartment housing in Chaeha-dong, Sinuiju.

According to the Daily NK:

he real estate market in a strategic location of North Korea is heating up, with a recently new venture seeing apartment units being traded for up to 30,000 USD , the Daily NK has learned.

“Real estate development in Sinuiju City has been pretty active since two years ago,” a source based in the province told the Daily NK on Tuesday. “Starting last July or August, construction for high-rises has been underway in the Chaeha-dong neighborhood.”

The apartments in Chaeha-dong are being built on joint investments from foreign currency-earning enterprises and the donju [the new affluent middle class], according to the source. To clear the way for the lucrative project, Chaeha Market, the largest distribution market in the city, has been relocated to park grounds located in Namsang-dong.

While private property purchases remain illegal in North Korea, beleaguered by economic hardship, the state dolls out tacit consent to these endeavors, encouraging increasingly more illicit trade within the burgeoning real estate market.

In areas like Sinuiju, a main portal to and from China, there is no shortage of solvent buyers eager and willing to pay for property in the area, knowing its value will only continue to increase. The apartments taking over the Chaeha Market grounds are modern buildings of roughly 100 square meters, constructed from materials exclusively imported from China. Situated in a prime location near Sinuiju Customs House, the complex offers convenient transportation options compared to other locations, warranting the relative high prices, according to the source.

Units in the complex come in three varieties, depending on their stage of completion: “If only the framework of the apartment is put up, it is sold for 20,000 USD; if interior construction is completed, it trades for 25,000 USD; and if decorative touches are added, it fetches 30,000 USD,” she explained. According to exchange rates in North Korean markets on the 7th, 1 USD trades for roughly 8,000 KPW.

Labor for the cause consists of workers from state-run enterprises and “8.3 Workers” with special expertise. The term, “8.3 Workers,” stems from a system where workers earn money outside their state-mandated workplaces and present de facto tax payments back to their employers but also keep a portion of the profits. In this case, the “8.3 Workers” are sectioned off into “8.3 Units” of five to eight people, tasked with plastering or putting down tiles in one unit within the residential complex.

Regarding compensation for their work on the new building, “8.3 Groups” reach an agreement with the construction company, affiliated with a foreign-currency earning enterprise, on rates and then work around the clock once ground breaks on the project. “Time equals money,” as the source said, adding that one worker is estimated to receive roughly 30,000 [3.75 USd] to 50,000 KPW [6.25 USD] a day of work and is guaranteed rations and meals.

For investors, however, the project yields far more significant returns. “If an individual invests in one of these companies’ real estate construction project, the profits are divided up 3:7 and the investor receives a 30 percent share from sales of the completed property,” the source explained.

Donju invest in housing construction projects with these firms because they are unable to receive legal permission from the Ministry of Construction to engage in such personal investments. Although donju involvement in these undertakings has been known to sometimes take the form of loans offered to construction firms at lofty interest rates, this method proves less popular for the simple fact that there is less guarantee for them to receive what they are owed; needless to say, no laws exist to protect these–by official North Korean law–illicit transactions.

This fact propels most of the donju to invest in the permanence and relative stability property offers, all while skimming 30 percent of the overall profits from the sale; it is also why the source speculated this form of investment to continue to gain traction.

She added that demand for news persists on with unhindered growth. Party cadres and the donju continue to purchase completed units; in fact, many even buying two or three units using their relatives’ names to ensure future usage.

Meanwhile, residents of Chaeha-dong in Sinuiju are currently residing at the Sinuiju Medical University dorms or at homes of their relatives. The source reported that these temporarily displaced persons will be moving in, free of charge, to the newly built apartments following their completion. She noted, however, that this contingent forms a disproportionate percentage to those who have purchased units within the complex.

Read the full story here:
Real Estate Market Booming in Sinuiju
Daily NK
Seol Song Ah
2015-01-14

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DPRK expands trade with China up to 2013

January 14th, 2015

According to Yonhap:

More than 90 percent of North Korea’s exports were bound for China in 2013, a report showed Wednesday, indicating that Pyongyang’s trade dependence on its main ally has deepened significantly over the past decade.

According to the report compiled by the Beijing office of the Korea International Trade Association, North Korea exported 90.6 percent of its products to China in 2013, much higher than the 50.9 percent tallied in 2003.

North Korea’s exports to China were estimated at US$400 million in 2003, but they jumped by more than sixfold to $2.9 billion in 2013, the report said.

Despite the increase, North Korean products accounted for only a small portion of China’s imports. The ratio of North Korean products in China’s total imports inched up from 0.1 percent to 0.15 percent over the measured period.

North Korea’s investment in China grew 12.6 percent to $2.68 million, most of which consisted of small-sized spending on shops and stores, the report showed.

China’s investment in North Korea, meanwhile, expanded sharply from $1.12 million to $86.2 million over the same period.

The number of North Koreans visiting China also surged 162.5 percent from 80,000 in 2003 to 210,000 in 2013. The report said that a large number of the people seemed to have visited the neighboring country in search of work.

Additional notes:

1. It is worth noting that the figure “90%” is slightly inflated. South Koreans do not count the DPRK’s trade with them as international trade–but rather “inter-Korean trade”. If you include South Korean trade in these data, the % of total trade conducted with China drops a small amount.

2. More 2013 trade statistics can be found here.

3. South Korean trade with the DPRK dropped from $1.976 billion in 2012 to approximately $1.1 billion in  2013 owing to a temporary closure of the Kaesong Industrial Complex. It will be interesting to see how the 2014 numbers turn out.

Read the full story here:
N. Korea’s trade dependence on China deepens: report
Yonhap
2015-1-14

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