North Korean Economy Watch

By Michael Rank

Companies in the Dandong area are no longer at the mercy of fluctuating foreign exchange rates and can now settle their accounts with North Korean companies in renminbi, according to a Chinese website.

Until recently companies conducting border trade with North Korea had to settle their accounts in US dollars, euros or yen, but in August 2010, 600 Dandong companies were permitted to do so in renminbi, and this has now been extended to all companies involved in  border trade, investment and service industries, the report said.

It didn’t mention North Korea by name, but said the new rules apply to companies conducting border trade with any country, so they presumably apply Russia as well as the DPRK.

Pictured Above (Google Earth): The May Day Stadium on Rungra Island in Pyongyang.  Home of the Mass Games.

According to the Daily NK:

North Korea has begun forming troupes to take part in this year’s Arirang mass games performance, leading to a game of wait-and-see between parents determined to ensure that their children are not required to perform.

Training for Arirang, as well as the performance itself, places four or five months of severe physical and emotional stress on participants. Training for the games begins after May 20th, once the annual ‘farm supporting activities’ are completed, meaning that the time for concern is rapidly approaching.

A source from Pyongyang told Daily NK, “Each school began working on its own list of participants for the Arirang games after the Labor Day holiday. There was some hope that the mass games might not be held in the Kim Jong Eun era, but alas that was not to be. All the parents of school-aged children are now working on plans to get their children exempted from the games.”

“Well-off parents are secretly paying bribes to hospital staff for medical certificates which can get their children off. Genuinely infirm children are sent to recuperate in the country, which completely removes any chance of being selected for the games.” The source also said, “People are pretty brazen now when talking about having to pay expensive bribes and the like to get their children off these lists.”

The Arirang mass games are administrated by the Mass Gymnastics Organizing Committee, which is made up of members of the Kim Il Sung Socialist Youth League and the cabinet-directed Chosun Sports Guidance Committee. From the beginning of May the committee screens children at Pyongyang’s elementary and middle schools based on height, health and artistic talent, and whittles the names down to a list of participants. In Pyongyang, roughly half the children from every school year are selected to take part in the games.

“Parents are keeping their eye on the situation and are keen to find out what other parents are doing to get their children out of selection,” the source said. “There is a palpable atmosphere amongst Pyongyang parents at the moment of trying to avoid selection for the games.”

The Arirang mass games have earned a nickname amongst the North Korean people: ‘Arirang of tears’. The games, which began in 2002, conscript over 10,000 elementary, middle school and university students from Pyongyang every year. Equipment including clothes, shoes, cards, artificial flowers, handheld flags, folding fans, and pole vaults become a burden for participants learning each routine.

As the performance approaches, students are made to train outside in stifling heat for 12 hours a day, from 8 o’clock in the morning, and practice is sometimes extended into the night. Parents of children who sit out from a rehearsal or fall behind in their training also become targets of severe criticism.

When the games began, performers were given televisions, which sparked envy amongst parents of non-participants; however, these have now been replaced with nylon blankets, leading to even less willing participation.

Read previous posts on the Mass Games here.

See a great documentary on the Mass Games here.

Read the full story here:
‘Arirang’ Looming over the Horizon
Daily NK
Choi Song Min
2012-5-4

According to the Daily NK:

One out of every ten new babies born in North Korea is born premature, according to new World Health Organization (WHO) data.

According to the WHO-produced ‘Born too Soon: The Global Action Report on Preterm Birth’, which was released by the UN body on the 2nd, among 347,600 babies born in North Korea in 2010, fully 37,300 were preterm, or roughly 10.7%. North Korea ranked 80th out of 184 countries surveyed on this measure.

Complications linked to preterm birth caused the death of 2,700 babies, 7% (2,700) of the total, placing North Korea 55th in the world.

You can download the full UN report here.

Read the full story here:
1 in 10 North Korean Babies Born Premature
Daily NK
Hwang Chang Hyun
2012-05-04

According to China Daily:

The Chinese government announced Wednesday that it has approved the establishment of an international cooperative demonstration zone in Northeast China’s Jilin province to boost cross-border cooperation in the region.

In a document posted on the central government’s official website, the State Council said the zone is expected to expand investment cooperation in northeast Asian regions.

Located in the port city of Hunchun, the demonstration zone will cover 90 square km and include an international industrial cooperation zone, a border trade cooperation zone and economic cooperation zones — one between China and the Democratic People’s Republic of Korea (DPRK) and another between China and Russia, it said.

The demonstration zone will focus on the development of local manufacturing and processing industries, including those for auto parts, agricultural and animal products, seafood, new materials, medicines, textiles and garments, the document said.

The Tumen River in Hunchun straddles the borders of China, Russia and the DPRK. In 1992, China, Russia, the DPRK, the Republic of Korea (ROK) and Mongolia launched a joint development project in the Tumen River area, a move made to strengthen regional cooperation in the area.

The State Council has called for more efforts to boost the construction of Sino-DPRK and Sino-Russia international transit corridors and promote cross-border economic cooperation between China and the two countries.

More supporting policies, including fiscal and taxation support, will be implemented to encourage the development of new energy, new material equipment manufacturing and other projects in the demonstration zone, according to the State Council.

The construction of the demonstration zone will also make border regions more open to the outside and strengthen the social and economic development of local areas, the document said.

And according to the Daily NK:

The authorities in China’s Jilin Province are investing billions of Yuan in multiple projects along the Sino-North Korean border. The construction is concentrated in areas adjacent to major North Korean border towns in the mountainous region, giving it the hypothetical potential to provide massive opportunities for future Sino-North Korean economic growth.

According to Jilin Shinmun and other local media outlets, the high-speed train, which will allow travel from Hunchun to Changchun in two hours at speeds of up to 250kph, is under construction at a predicted cost of 37.7 billion Yuan.

Jilin Province is also planning a “five border region highway” in its 12th Five-Year Plan from 2011 to 2015. The Changchun to Hunchun leg is already open, while legs from Changchun to Huyinan, Songjangheo to Changbai, Changchun to Mt. Baekdu to Yanji, Changchun to Linjiang and Changchun to Jibian are under construction with the typical degree of Chinese speed. Among these locations, Changbai, Linjiang and Jibian all face major North Korean towns (Hyesan (Yangkang Province), Chungkang (Jagang Province) and Manpo (Jagang Province).

The province is also putting weight behind railway construction travelling towards North Korea; from Nanpin to nearby Musan (in North Hamkyung Province), Kayisan to Sambong (in North Hamkyung Province) and Changbai to Hyesan.

When all the construction is complete, there will be a bridgehead connecting the Tumen to the Yalu and linking all North Korea’s major cities with the Chinese economic miracle. If trade and cooperation between the two countries grows more active than it is now, the newly built highways and railways will form the core pathway for commercial distribution.

However, there are also major concerns with the plan. First and foremost, defection will become more difficult when the new developments are complete. The regions where highways and railways are now appearing have long been major defection routes or hiding places for new defectors.

In particular, a warning device installed by Jilin police in border villages, while an improvement in terms of public security, can also be used to report North Korean defectors to the authorities. The device, known as the ‘BF-01’, has been installed in 6,000 homes along the border at a cost of 5 million Yuan, connecting them with public security offices in an emergency. When pressed, names, addresses and the sound from the scene is transmitted to the local police station, border guards and neighbors.

“Regardless of whether North Korea conducts a nuclear test, it seems that North Korea and China are developing the northeastern region,” Shin Jong Ho, a research fellow with the Center for Northeastern Asian & Inter-Korean Affairs, part of the Gyeonggi Research Institute, commented. “In the future, if cooperation between North Korea and China gets better then these transportation routes will be very useful.”

Read the full stories here:
China approves int’l border cooperation zone
China Daily (Xinhua)
2012-4-25

Border Region Getting Huge Boost
Daily NK
Park Seong Guk
2012-5-3

UPDATE 1 (2012-5-3): KCNA announces the completion of  the Tanchon Port:

A modern trading port made its appearance in the area of Tanchon in South Hamgyong Province on the occasion of the 100th anniversary of President Kim Il Sung’s birth.

The construction of the port with a cargo traffic capacity of millions of tons provides a guarantee for greatly contributing to developing the nation’s foreign trade and improving the people’s living standard.

A ceremony for the completion of the construction was held on the spot Thursday.

Present there were Choe Yong Rim, Kwak Pom Gi, Ro Tu Chol and other officials concerned, officials of the Ministry of Land and Marine Transport, builders and working people of industrial establishments in Tanchon City.

Read out there was a joint congratulatory message sent by the Central Committee of the Workers’ Party of Korea and the Cabinet of the DPRK to the officials and members of shock brigades who performed labor feats in the construction of the port.

The message highly praised them for successfully building another giant structure in the era of Songun greatly conducive to building an economic power true to the life-time desires and last instructions of President Kim Il Sung and leader Kim Jong Il.

It expressed belief that they would perform greater feats in the efforts for the country’s prosperity united close around the WPK Central Committee headed by the dear respected Kim Jong Un.

Minister of Land and Marine Transport Kang Jong Gwan, in his speech made for the occasion, said the construction of the port was a brilliant fruition of the wise leadership of Kim Jong Il who initiated the construction of the port and worked heart and soul to translate the desire of the President into a reality till the last moments of his revolutionary life and the clear-sighted guidance and meticulous care of Kim Jong Un.

Speakers at the ceremony pledged themselves to carry out their tasks including dredging in a short span of time in the same spirit as displayed in the construction of the port.

At the end of the ceremony the participants looked round different places of the port.

You can see video of the port inauguration here. (KCNA)

Just a few days ago, the Choson Sinbo reported the following (via Yonhap):

The North is estimated to have 15 billion tons of anthracite coal, a key mineral Pyongyang uses to produce steel, the Choson Sinbo newspaper said.

The North also has an estimated 5.4 billion tons of magnesite in Tanchon, a home to mines in South Hamgyong province, and other areas, according to the newspaper.

North Korea is set to open Tanchon as a modern trade port, the newspaper said, without giving any specific time frame for the opening.

ORIGINAL POST (2010-12-9): On December 2, KCNA announced that Kim Jong-il visited the port in Tanchon County, South Hamgyong County (40.412522°, 128.917731°) where he gave guidance on the port’s reconstruction.

Judging by the satellite imagery of the area on Google Earth, it appears that the project had already begun by May 13, 2009, where we can see concrete blocks ready to be used to extend the jettys (breakwaters).  I have outlined the proposed port project on Google Earth imagery below and provided a picture of the completed project from KCTV:

After the jettys are extended, the major construction work and dredging can begin.  Below are images of the port’s main construction site as it appears on Google Earth and a prediction of the project’s conclusion from KCNA:

It appears from the picture that the port will be connected to the railway system—likely via the nearby Tanchon Smeltery and Magnesia Plant (both recently renovated) whose products will probably be exported from the port.

Tanchon is also home to the DPRK’s Komdok and Taehung Youth Hero Mines (among others).  As is well known to readers, raw materials exports are the DPRK’s most significant (legal and transparent) source of hard currency.  According to Yonhap’s North Korea Handbook 2002:

Geomdeok [Komdok] Mine is a special company in Bonsan-dong, Dancheon, South Hamgyeon Province, and is very famous for about 300 million tons of deposited leads and zincs. This mine annually produces 52,000 tons of lead, 124,000 tons of zinc, both of which account for 47% of total production in North Korea, and more than twice as much as the production of Eunpa Mine, North Korea’s second largest mine, in Eunpa-gun North Hwanghae Province. Concentrates of lead and zinc produced from Geomdeok Mine are processed into electric zinc at Dancheon refinery. Opened in 1932, this mine produces 14,200 tons of raw ore annually with three ore dressing plants. Annual production capacity can reach up to 11 million tons. The first dressing plant was completed in July 1953, near the end of the Korean War. It now processes a million tons of ore a year. The second dressing plant was opened with a production capacity of 3,200 tons of ore. The third one constructed in September 1983 can process 10 million tons of ore.

Pictured above (Google Earth): The location of the Mansugyo Meat and Fish Shop (a.k.a. “Hero Street Meat Shop”) in Pyongyang

Institute for Far Eastern Studies (IFES)
2012-5-2

Recently, new stores are opening in Pyongyang.

On April 26, Kim Jong Un, the first secretary of the Workers’ Party of Korea, congratulated the opening of a meat store in Mansugyo.

The Korean Central News Agency (KCNA) reported on April 26 that the “dear respected Kim Jong Un appeared at the shop to congratulate its opening,” and “looking round the interior of the shop, Kim Jong Un expressed great satisfaction with the soldier builders having built the shop to be loved by the people. He ardently said leader Kim Jong Il would have seen the shop with the highest service level.”

The three-story store covers over 5,000 square meters. The first floor has fresh and frozen fish; the second floor sells beef, pork, goose, turkey, quail and processed foods; and the third floor is equipped with a restaurant serving bulgogi or barbecued beef.

Kim Jong Un is reported to have visited the construction site for the store in January and March and provided guidance over the direction of the project.

On April 27, the KCNA reported that another store, the Mirae Shop for scientists and technicians, opened in Pyongyang. It eulogized Kim Jong Un for naming the shop and commended “his noble intention” for promoting the development of science and technology.

The shop is reported to have a variety of popular goods for sale, including daily necessities, electrical appliances and foodstuffs. In addition, it also boasted its convenient facilities for customers such as alteration and watch repair services as well as elevators and beverage vendors.

On the same day, the KCNA also reported on opening of two other establishments; modern soymilk powder production process of Pyongyang Children’s Foodstuffs Factory and a process for producing sanitary articles at the Pyongyang Cigarette Paper Factory.

The soymilk powder production factory was described as follows: “Employees of the factory, soldier-builders and researchers of Kim Chaek University of Technology manufactured dozens of equipment needed for automatic packing process and the process of carrying and melting sugar powder and installed latest equipment.”

The development of the sanitary products factory was celebrated as an achievement that will meet the needs of women’s daily necessities.

Pictured above (Google Earth) : Ichon, alleged home of the patriotic North Korean mentioned in the story.

Andrei Lankov wites in the Asia Times:

In August 2007, North Korea suffered severe flooding. Kang Hyong-kwon, a factory worker from the city of Ich’on, was trying to make his way to safety through a dangerous stream. While leaving his flooded house, he took the two most precious things in his life – his five-year-old daughter and portraits of Leaders Generalissimo Kim Il-sung and Marshal Kim Jong-il (or so was reported in the North Korean media a few days later).

Read the rest below:

Read the rest of this entry »

I was able to locate all of Kim Jong-un’s guidance trip locations on Google Earth for the months of March and April. One of Kim Jong-un’s final April 2012 guidance trips was to the 26th Exhibition of Military Science and Technology of the KPA (조선인민군 군사과학기술전람회). This is not to be confused with the previously mentioned KPA Exhibition of Arms and Equipment (조선인민군 무장장비관). And though this was the 26th exhibit, the venue was clearly being used for the first time.  It is likely, however, that the previous exhibits took place in the site’s former buildings.

The new military exhibit hall is located in Mirim, and here is a picture on Google Earth ( 39.020407°, 125.847304°: hat tip to a good friend for assistance):

Click image for larger version

Construction of this facility began in December 2009 with the demolition of the previous buildings. Most of this exhibition hall’s shell (concrete) was completed by October 2010. The roof of the main exhibition hall was completed by May 27, 2011. The exteriors of the annex buildings were completed by October 2011. According to the Google Earth ruler, the main exhibition hall is approximately 55m x 50m, and by my estimation there are 3-4 floors. Entrance to the facility is via the former Mirim airfield.

Outside the exhibit hall, several different kinds of KPA vehicles and projectiles are parked for inspection. Inside, the center of the large exhibition hall appears to be largely empty with smaller rooms around the circumference of the building utilized for education/research opportunities in specific aspects of the KPA’s equipment.

You can see video of Kim Jong-un’s visit here.

Here is KCNA coverage of Kim Jong-un’s visit.

There is more at NK Leadership Watch

An unknown reader sent in this beautiful Digital Globe satellite image of Pyongyang taken on April 15th, 2012:

Click Image for large version

Photo highlights:

1. Check out the mass rally in Kim Il-sung Square. 영광 (Yonggwang) means “glory”. A tourist made this nice video of the events taking place in the city.

2. The image features the military parade through the newly re-built area of Mansudae street. Looking back, this remains my favorite photo of the construction work (large version here), which was captured by a tourist.

2. The image features the new Kim Il-sung and Kim Jong-il statues on Mansu Hill.

3. The long-abandoned wading pools on Rungra Island have been filled in, but farther north on the island some new water slides are being built.  Now some new, unknown construction appears to be taking place at the old location:

Kim Jong-un recently visited the new wading pool and water slides (not visible in the image). According to KCNA:

The next leg of his guidance was the construction site of the Rungra Wading Pool.

The pool consists of water slide with four tracks 18 meters high and more than one hundred meters long, a shower bath site, soft drink stands, dressing room, etc.

He was very pleased to picture to himself the happy school youth and children and working people who will laugh boisterously while fully enjoying wading at the wading pool when completed on the occasion of the day of the victory in the war.

He underlined the need to add a diving tower and different service facilities to the area around the wading pool so that it may be a cultural recreation place for people which will remain impeccable even in the distant future.

You can see pictures of the new pools and water slides here.

4. We also have a good picture of the new 창광원식목욕탕, Changgwang Health Complex (not to be confused with the pre-existing Changgwang Health Complex), and Pyongyang Haedanghwa Center.

5. I tried creating a Google Earth overlay of this image for you to download, but for some reason I can’t get it to work. Only 1/4 of the picture appears on Google Earth. If anyone knows the cause of and solution to this problem, please let me know.

According to Yonhap:

First quarter bilateral trade between North Korea and China reached an all-time high of US$1.37 billion, Voice of America reported Tuesday, citing data from China’s Ministry of Commerce.

The volume for the January-March period marked a surge of 40 percent from a year ago, when a record $972 million was reported in the two-way trade.

North Korea’s first-quarter exports to China rose 40 percent to $568 million, while its imports of Chinese goods also increased at the same rate to $800 million, according to the data.

As a result, Pyongyang’s quarterly trade deficit with China increased to $232 million, up from $170 million a year ago.

Read the full story here:
N. Korea-China trade hits record high in first quarter
Yonhap
2012-5-1