China plans tourism zone with Russia, DPRK

February 13th, 2015

According to the China Daily:

The Tumen River Delta international tourism area will include part of China’s Hunchun City, as well as a 10 sq km plot each from Russia and DPRK, said the government of China’s Jilin Province. The three sides will jointly build tourism facilities.

At the ongoing annual session of the provincial legislature, Jiang Chaoliang, governor of Jilin, said the province would draw up a blueprint for the tourism area this year and explore a management model that would involve the three countries.

The initiative was put forward by the Hunchun City government in 2013 and has drawn interest from authorities of the border areas of Russia and DPRK.

Visitors shall enter the tourism zone without visa and shopping shall be duty-free, according to officials.

In the long run, the Republic of Korea, Japan and Mongolia will join the tourism area via highways, railways and air routes, said Zhao Xiaojun, director of Jilin Provincial Tourism Administration.

The United Nations Development Program (UNDP) launched the Greater Tumen Initiative (GTI) in 1995, which provides a multilateral forum for its member countries to tap potential economic opportunities.

The article featured a picture with this caption:

National scenic spot of Fangchuan in Hunchun city, Jilin province, with Russia on its southeast and DPRK across the Tumen river.

Because of this, I presume the new zone is intended to be in Fangchuan. And this makes geographic sense for the Chinese because the land is isolated and surrounded by Russia and China. Here is a Google Earth satellite image of the site. Russia in red. China in blue. North Korea in yellow.

Fangchuan

Here is coverage in Yonhap and in Reuters.

Read the full story here:
China plans tourism zone with Russia, DPRK
China Daily
2015-2-13

Share

DPRK crop output in 2014

February 6th, 2015

Media sources report that North Korea experienced a surprisingly good harvest in 2014.

According to the Voice of America:

The GS&J Institute released a report based on statistics from the U.N.’s World Food Programme and Food and Agriculture Organization. Dr. Gwon Tae-jin, who spearheaded the research, wrote that the North harvested 4.98 million tons of crops in 2014.

The FAO recently announced that the North harvested about 5.94 million tons of raw crops last year. The figure from the GS&J Institute is based on how much would be left after processing the raw crops for consumption.

Gwon explained that while the figure is lower than the previous estimate because of the drought in spring, the autumn harvest made up for the lackluster yield earlier in the year.

The report indicated North Korea’s crop harvest plunged from 4.05 million tons in 1995 to 2.57 million tons in 2001. However, the food security situation has improved since 2004, staying around 4 million tons in most years.

In 2011, the figure rose to 4.22 million tons, and when Kim Jong Un became the country’s leader in 2012, it rose to 4.45 million tons. The next year, it was 4.84 million tons.

Gwon said Pyongyang’s efforts to draw manpower to farming and prioritize the distribution of fertilizer and other materials for agriculture is the main reason behind the hike in crop harvest. He added that the new policy of letting farmers freely use a certain percentage of the harvest had also helped the productivity.

In a telephone interview with VOA, Gwon said, “North Korea, which overcame difficulty with international aid in the early 2000s, is now in the process of overcoming another difficulty through its own efforts, rather than aid.”

Despite the slight improvement, however, the North Korean government is not able to meet the minimum needed for food security.

In 2007, when the crop yield was low, Pyongyang was able to feed its people through imports and international aid. From 2008 on, the country has experienced food shortages because of a decline in international aid.

The latest report forecast crop distribution in the North to be lacking by some 80,000 tons, when totaling its crop harvest, imports and international aid.

I have not been able to locate the original UN or GS&J reports (VOA-you should site your statistics, or even better, link to them).

The increase in agricultural production occurred at the same time as a nation-wide drought. Could this be the effectiveness of the 6.28 Measures?

Read the full story here:
Report: N. Korea’s 2014 Harvest Best Since Mid-’90s
Voice of America
2015-2-6

Share

UNFAO on DPRK food supply outlook

February 5th, 2015

On February 3, 2015, the UNFAO recently published the DPRK “Outlook for Food Supply and Demand 2014/15“.

Here are the highlights:

1. After increasing markedly for three consecutive years, food production remained stagnant in 2014 with the aggregate output put at 5.94 million tonnes (including cereals, soybeans and potatoes in cereal equivalent). This figure comprises the official estimate of the 2014 main harvest and forecast for the 2015 early crops from cooperative farms, as well as FAO projections of production from sloping land and household gardens.

2. Paddy production dropped by about 10 percent due to reduced irrigation water availability, following low precipitation in the winter and dry spells during the 2014 main season. However, this decline was compensated by a significant increase in maize output, as a result of mass mobilization of people to water maize plants.

3. Production of the 2014/15 early season potatoes and minor wheat and barley crops, to be harvested from next June, is forecast to fall considerably.

4. The total utilization needs for the 2014/15 marketing year (November/October) are set by FAO at 5.49 million tonnes of cereal equivalent and the cereal import requirement is estimated at 407 000 tonnes. The Government is expected to import 300 000 tonnes of cereals, leaving an uncovered deficit of 107 000 tonnes for the current marketing year. This gap is larger than in 2013/14 partly as a result of revised post-harvest losses.

5. With a stagnant harvest in 2014, the food security situation in 2014/15 is likely to remain similar to that of the previous marketing year, with most households estimated to have borderline and poor food consumption rates.

The report listed these statistics that I thought were worth highlighting:

The marginal increase (0.3  percent) in the 2014/15 food production follows three consecutive years of strong growth at 4.4 percent in 2011/12, 8.7 percent in 2012/13 and 3.5 percent in 2013/14. However, at the forecast level, production remains above the past five-years average.

Andrei Lankov takes an optimistic view of this report in his article for Radio Free Asia and in the Carnegie Moscow Center. He credits implementation of the 6.28 Measures.

Marcus Noland commented on technical aspects of the report (such as the fact that the assessment was made without direct access to the country).

Scott Snyder commented on some of the political economy around the reports findings in Forbes. He asks why the UNFAO was not allowed into the DPRK, and notes that Russia has become the DPRK’s largest food donor.

The Daily NK has also noted the stability of food prices in late 2014 and early 2015.

Share

KCNA: Business success in store for foreign investors

February 2nd, 2015

According to the article:

A project to set up economic development parks has been steadily pushed forward in different parts of the DPRK, drawing attention of many foreign investors, says Ri Sun Hak, a department director of the Ministry of External Economic Relations.

He said the DPRK government has made all its efforts to create a legal environment favorable for the rights and interests of foreign investors.

The government encourages them to invest in the country on the principle of equality and mutual benefits, he said, and continued:

A series of laws on foreign investment, including the DPRK Law on Foreign Investment and the Law on Economic Development Parks, has been newly enacted, amended and supplemented to provide foreign investors with legal guarantee.

The DPRK government has already made the agreement on promotion and protection of mutual investment with 28 countries and agreement on prevention of double taxation with 13 countries in Asia, Africa and Europe.

Rules and detailed regulations have been adopted one after another to introduce internationally recognized investment formulas in keeping with the actual circumstances of the country.

Now the DPRK government has been carried forward the cooperation with Russian companies in the fields of railway transportation and harbor express service, while establishing economic development parks and paying deep attention to different projects of cooperation with other countries in the field of investment.

Tourism is also gaining momentum with the development of Wonsan-Mt. Kumgang and Mt. Chilbo areas into fashionable tourist attractions.

Share

Ten Years at the Kaesong Industrial Complex: South Korea’s Listed Firms Demonstrate Strong Growth

January 30th, 2015

Institute for Far Eastern Studies (IFES)
2015-1-30

The Kaesong Industrial Complex (KIC, also known as Gaeseong Industrial Complex) has recently celebrated its tenth anniversary of operation. Despite years of twists and turns, most of the listed South Korean firms with operations at the KIC generally showed a higher than average annual growth rate of 10 percent.

According to the financial investment industry and the Corporate Association of Gaeseong (Kaesong) Industrial Complex (CAGIC), the ten companies in the KIC recorded average sales and operating profits of 116.84 percent and 143.23 percent from 2005 to 2013. This translates into a compound annual growth rate (CAGR) of 10.16 percent in terms of sales, and 11.75 percent in operating profit.

Taekwang Industry, Korea Electric Terminal, Cuckoo Electronics, Jahwa Electronics, and Romanson were among five companies that showed highest sales, operating profits, and net profits that recorded high annual growth rate of more than double digits. Excluding Cuckoo Electronics, which was listed with the KIC from last year, all nine companies (out of ten) reached the average of 485.91 percent in terms of market capitalization from 2005 to 2014 and averaged yearly increase of 19.34 percent. In addition, Cuckoo Electronics emerged as a star company with a market capitalization of 1.7 trillion KRW due to its high-speed growth, recording annual average sales of 12.89 percent since 2005 and an operating profit of 22.4 percent.

South Korean companies entered the KIC from 2004, began operations, and saw their first production in December 2004. The companies in the KIC suffer whenever tensions are high between North and South Korea, but they were hit hardest in 2013 when North Korea unilaterally shut down the complex for five months. However, the financial investment industry positively evaluates the KIC to have significant advantage such as low labor costs.

Although this strong growth cannot be seen entirely as the ‘KIC effect’, the competitiveness of the KIC seems to have contributed to some extent to these earnings. In fact, “Hi Korea Unification Renaissance Stock Fund,” launched by local asset manager Hi Asset Management Co., delivered a return of 9.79 percent during the eight-month period since its introduction in May.

The low cost of labor of North Korean workers in the KIC is considered as an advantage for the competitiveness of companies. This is leading to higher earning and consequently a rise in their share prices.

Share

DPRK imports of smart phones in 2014

January 30th, 2015

According to Yonhap:

North Korea’s smartphone imports from China surged to a record high last year, a sign of a growing number of people there being connected to the net, according to data released Friday.

North Korea brought in US$82.8 million worth of smartphones from China in 2014, almost double the amount recorded a year earlier, according to the Seoul-based Korea International Trade Association.

It marked the largest volume since 2007, when related data were introduced.

Imports of portable data-processing devices, including laptops, also jumped 16 percent on-year to $23 million in 2014 despite a 3-percent decline in the North’s overall imports from China in the year.

Around 10 percent of the communist nation’s 24-million residents reportedly use smartphones, with its 3G network run by Koryolink, a joint venture with an Egyptian company, Orascom Telecom.

See also this post with additional data on DPRK-china trade in 2014.

Read the full story here:
N. Korea’s smartphone imports from China hit record
Yonhap
2015-1-30

Share

Science and Technology Hall to be built in Pyongyang’s Ssuk Islet

January 29th, 2015

science-technology-hall

Pictured Above (Google Earth: 2014-9-21): Construction site of the Ssuk Islet Scientific and Technological Study Center

According to the Institute for Far Eastern Studies (IFES):

The Choson Sinbo, pro-North Korean newspaper in Japan, reported on January 10, 2015 that a “Science and Technology Hall” is under construction on the Ssuk Islet on Pyongyang’s Taedong River. The hall is reported to serve as a “multi-functional technological service base which will conserve and maintain digitalized data of science and technological achievements made by mankind, and facilitate information sharing and exchanges through a network system.”

The newspaper stated, “The Republic with the national strategy to achieve economic revitalization through science and technology is emphasizing the need for informatization of educational materials in order to foster professionals in science and technological sector.” In also stressed, “In the Kim Jong Un Era, this project is under promotion to advance to the next level.”

Last June, Kim Jong Un visited the Ssuk Islet to provide field guidance for the “Ssuk Islet development project.” During the visit, Kim proclaimed, “The demand for scientific and technological knowledge sharing is increasing day by day,” and added, “Our Party [Workers’ Party of Korea] has decided to develop Science and Technology Hall in the Ssuk Islet to address the demands of the people.” According to the newspaper, the islet, which is situated at the gateway to Pyongyang, will be equipped with indoor and outdoor exhibition space and will “transform the scenery of the Taedong River.”

Last year, the faculty residence for the Kim Chaek University of Technology was completed (two, 46-story apartment buildings) on the riverside of the Taedong River. This high-rise, which looks afloat on the Taedong River, will be at the center of the currently-under-construction “Mirae [Future] Scientists Street.” This street will house various residential and public service buildings.

In particular, the newspaper claimed, “The economic trials suffered from the end of the 20th century with the blockade and sanctions from our adversaries has impeded the advancement of the information sector. Hence, the informatization of educational resources is one of the fastest measures to ensure the best conditions and environment for education.” It conveyed the Science and Technology Hall development in the Ssuk Islet will contribute to the efforts toward the “informatization of educational resources.”

It further elaborated, “The most pragmatic approach to meet the demand for knowledge dissemination is not to distribute compulsory literatures, teaching materials, and experimental equipment for every field and units which will require tremendous effort in terms of funds, materials and time.” Instead, the article stipulated that the more rational choice would be to “create a state-level system that can provide necessary information in digitalized data and share that information to the people.”

This can be interpreted as one of North Korea’s efforts to revitalize the economy through science and technology.

Share

ROK to resume training of DPRK doctors

January 28th, 2015

According to Yonhap:

South Korea said Wednesday it will resume a program to support North Korean medical doctors’ training in Germany.

The move, the first of its kind in seven years, is in line with the Park Geun-hye administration’s push for expanding humanitarian aid for the impoverished neighbor.

The unification ministry plans to provide a North Korea-Germany group with 90 million won (US$83,000) from the inter-Korean cooperation fund. It will be delivered through the (South) Korea Foundation for International Healthcare.

In 2001, the North Korea-Germany Medical Association launched a project to help train the communist nation’s doctors. A number of North Korean doctors were invited to Germany to learn the latest medical techniques for several months at local hospitals.

South Korea offered funds for the program in 2007 and 2008, but cut the assistance amid worsened relations with Pyongyang.

Read the full story here:
S. Korea to support N. Korean doctors’ training in Germany
Yonhap
2015-1-28

Share

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

Share

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.

Share