Number of defectors up by around 17 percent in 2016

December 7th, 2016

By Benjamin Katzeff Silberstein

Reports Yonhap:

The number of North Korean defectors coming to South Korea rose 16.7 percent on-year in the first 11 months of the year, data showed Wednesday, as more elites and overseas workers chose to flee their home country.

A total of 1,268 North Koreans came to South Korea in the January-November period, compared with 1,086 the previous year, according to the Ministry of Unification.

As of end-November, the total number of North Korean defectors reached 30,062, it showed. The ministry said that the number of North Koreans coming to the South would reach around 1,400 this year, if it grows at the current pace.

The number of defectors reaching the South peaked at 2,914 in 2009, but the pace of growth has slowed down since 2011 as North Korean leader Kim Jong-un has strengthened border control and surveillance over the country’s population.

But this year, the pace has picked up, helped by a rise in defections by North Korean elites and workers toiling overseas, the ministry said.

North Korea is pressing its diplomats and overseas workers to send hard currency earnings home as it is squeezed by tough sanctions handed down by the U.N. Security Council.

Unification Minister Hong Yong-pyo said that the imposition of international sanctions has promoted more North Korean elites to escape the regime.

“North Korea is showing a sensitive response to the U.N. sanctions and is being stifled (under the sanctions regime),” Hong said at a forum earlier in the day.

I wonder if there is actual quantitative evidence to back up the claim that the increase is caused by elite defections. The proportion shouldn’t be too hard to count, though I’m currently not aware of statistics on this.

Full article:
Number of N.K. defectors up 16.7 pct on-year in first 11 months
Yonhap News
2016-12-07

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North Korea’s equalizing credit system?

December 7th, 2016

Benjamin Katzeff Silberstein

Daily NK:

A deferred payment system is becoming popular in North Korea for garment production, manufacturing, and food services, wherein raw materials are provided for credit instead of cash. As marketization accelerates in North Korea, these types of private transactions are helping to build trust between finance providers and are opening the door to citizens who would otherwise not have enough money to start a business.
“Operating a restaurant near a train station or market has now become a possibility for more North Koreans than ever before, even those who are not members of the donju (newly-affluent middle class). Restaurants tend to have high profit margins and a lower risk of insolvency, which has merchants feeling more comfortable providing credit for such endeavors,” a source in Kangwon Province told Daily NK on December 2.
“As market controls are easing, suppliers are entering into intense competition with each other. Some merchants have begun to deliver restaurant supplies on credit to businesses that are performing well. In doing so, they have been able to capture larger proportions of the market.”
“This has opened up new possibilities for people with good business acumen that don’t have the capital to establish a business. Such individuals are able to acquire both a storefront and raw materials on credit. That has created more opportunities for new businesses to grow.”
Full article:
Credit system fuels new market entrants
Seol Song Ah
Daily NK
2016-12-07
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Orascom’s Ora Bank closes

December 5th, 2016

According to the Egyptian Daily News:

Orascom Telecom Media and Technology Holding will shut down Orabank, its affiliate bank in North Korea, due to US sanctions on the nation, according to an announcement on Sunday.

The company, owned by business tycoon Naguib Sawiris, added in a note to the Egyptian Exchange that shutting down the bank in Korea is a result of force majeure due to the sanctions imposed by the US Office of Foreign Assets Control on North Korea.

Orascom noted that its subsidiary in Korea will transfer all cash and liquid assets.

The company added that its subsidiary, Koryolink, will continue operating in Korea despite the sanctions.

Shortly after the banks closing was announced, Naguib Sawiris announced his resignation as CEO of OTMT . You can read the Press Release and coverage in Forbes.

According to the Chosun Ilbo:

Naguib Sawiris resigned a day after Orascom decided to shut down a branch of its affiliate bank Orabank in Pyongyang under sanctions imposed by the UN Security Council and the U.S. Treasury Department.

“Sawiris has done brisk business in the U.S. and Europe and has much of his assets in the West,” a source said. “So he has no choice but to look for an exit in the face of the sanctions.”

Sawiris has a U.S. passport and is therefore directly affected by sanctions that penalize U.S. citizens from doing business with the North, according to investigative website Finance Uncovered.

Orabank in Pyongyang is linked to Foreign Trade Bank of North Korea, which has been blacklisted by the U.S. for serving as a funnel for the regime’s nuclear weapons development.

Here are links to previous posts on cell phones, Orascom, and Ora Bank.

Here is coverage in North Korea Tech.

 

Read the full story here:
Sawiris shuts down affiliate bank in North Korea due to US sanctions
Egyptian Daily News
2016-12-4

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The November 2016 North Korea sanctions: some perspective

December 1st, 2016

By Benjamin Katzeff Silberstein

Responding to North Korea’s second nuclear test within one year in September, the United Nations adopted a new sanctions package yesterday, Wednesday November 30th. These are some of the main points:

  • By far, the most significant measure is a “cap” on imports of North Korean coal at $400 million or 7.5 million metric tons in a year, cutting its revenues by about $700 million per year. This is to supplement the current provision that coal can be imported when the proceeds go to livelihood purposes in North Korea, a provision that has proven to be a massive loophole (shocker!).
  • Four more minerals have been added to the sanctions list: copper, nickel, silver and zinc.
  • Exports of statues have been banned, targeting the somewhat peculiar North Korean practice of building statues in various African countries.
  • The resolution also limits the number of staff allowed at North Korean diplomatic missions, and forbids them from opening more than one bank account per person.

So what does this mean for the North Korean economy? Obviously, one shouldn’t speculate too much in advance. As always, China’s enforcement will be the main determinant. Here are some things worth noting:

First, while $400 million cap would certainly be a significant income loss for the North Korean regime, it might not be disastrous. It is worth remembering that North Korean government revenue from minerals exports already fluctuates heavily, since market prices do. Just for a sense of perspective, in 2015, North Korea’s export income stood at about $3 billion, and this was a decrease by 16.4 percent from the preceding year. In 2014, textile exports to China brought in around $800 million. Moreover, the $700 million revenue cut claim does not take into account the extent to which North Korea could make up for the loss through other sectors.

Second, the likelihood of full and consistent Chinese sanctions enforcement remains fairly low at best. Historically, we have seen a pattern where China will increase enforcement during certain time periods, or take single measures that receive a lot of attention (such as the Hongxiang inquiry) but where things return to normal pretty quickly. Case-in-point: the unusually strong sanctions from earlier this year, and the promises of Chinese enforcement, ending with record trade in coal. Obviously the “livelihoods” exemption provided a large enough loophole, particularly after the announcement by the US and ROK that THAAD will be deployed in South Korea. It is difficult to see why this cap would be impossible to circumvent. After all, China is (presumably) responsible for gather the data and for ringing the alarm bells when said cap is reached. (See also Adam Cathcart’s essay on the recent Sino-North Korean rapprochement at Sino-NK).

Third, and relatedly, history tells us that many, many factors other than the international sanctions regime determine Chinese imports of North Korean coal. Domestic demand is arguably far more important as a determinant than sanctions, as evident by the fact that declines in imports of North Korean coal often fluctuate much more with demand than with sanctions.

As always, we can only wait and see, but at the face of it, these new sanctions seem far from revolutionary.

(Update 2016-12-02)

Japan, South Korea and the United States have announced additional, multilateral sanctions independent from those by the U.N. Joshua Stanton over at One Free Korea argues that some of the measures potentially carry some real impact power. For example, they include North Korea’s national carrier Air Koryo. Moreover, they sanction China’s Hongxiang Industrial Development, making it the first time that a single Chinese company is directly targeted by South Korean sanctions. Yonhap:

“We have expanded the number of those subject to sanctions by adding to the list 35 entities and 36 individuals that are playing a critical role in developing weapons of mass destruction and contributing to the North Korean regime’s efforts to secure foreign currency,” Lee Suk-joon, the top official in charge of government policy coordination at the Prime Minister’s Office, told reporters.

Included in the blacklist were Choe Ryong-hae, a vice chairman of the Central Committee of the ruling Workers’ Party, and Vice Marshal Hwang Pyong-so, director of the military’s general political bureau, both of whom are regarded as close aides for North Korean leader Kim Jong-un.

The Workers’ Party and the State Affairs Commission were also added along with other entities suspected of supporting the regime’s efforts to export its coal and generate earnings.

In particular, Dandong Hongxiang Industrial Development and four of its executives were included on the list, marking the first time that a Chinese firm is facing South Korea’s unilateral sanctions.

The company is under investigation on suspicions that it exported aluminum oxide — a nuclear bomb ingredient — to the North at least twice in recent years. In September, the U.S. blacklisted it along with its owner and other company officials.

With the latest action by Seoul, a total of 79 individuals and 69 entities will be subject to sanctions in connection with the North’s nuclear programs. The government announced a blacklist in March as a follow-up move to the UNSC’s Resolution 2270 adopted in the wake of the North’s fourth nuclear test in January.

Any financial transactions with them will be prohibited, while their assets in South Korea will be frozen. The blacklisted people will also be banned from entering the country, which is seen as a symbolic action given that there are no exchanges between the two Koreas.

Other prohibitive measures include blacklisting the North’s state-owned airline Air Koryo on suspicions that it helps its regime transfer workers abroad, and move cash and other embargoed materials into the isolated country.

The Seoul government has also toughened its maritime sanctions by banning any ships that have traveled to the North within the past one year, an extension from the previous 180 days, from entering South Korean ports.

In addition, a watch list “tailored” to enhance the monitoring on activities related to the North’s submarine-launched ballistic missile capability will be prepared and shared with the international community, it said.

Full article:
S. Korea blacklists scores of N. Koreans, entities linked to nuke, missile program
Yonhap News
2016-12-02

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Pyongyang Folk Village (UPDATED)

November 30th, 2016

UPDATE 4 (2016-11-30): The most recent Google Earth imagery of the Folk Park demolition is posted below (2016-10-4). Three earlier images that were posted to Google Earth have all been deleted.

UPDATE 3 (2016-11-9): Yonhap has posted yet another image of the Folk Park demolition that briefly appeared on Google Earth, but has since been deleted.

UPDATE 2 (2016-6-28): Yonhap has published imagery from Google Earth showing the demolition of the park has begun. You can read the article here (in Korean). For unknown reasons, this imagery was only briefly posted to Google Earth. It has since been deleted.

UPDATE 1 (2016-6-14): Yonhap reports that the Pyongyang Folk Park is being torn down. According to the article:

North Korea’s leader has ordered the dismantling of a folklore theme park in Pyongyang in a bid to erase the remaining legacy of his uncle Jang Song-thaek who was executed in 2013 for treason, a source familiar with the reclusive country’s affairs said Tuesday.

The North’s leader Kim Jong-un is believed to have ordered his officials to close the Pyongyang Folklore Park which opened in April 2012, the observer said. Work on the park began late 2008 under the instruction of the incumbent leader’s late father Kim Jong-il.

Located in the foot of Mount Taesong in the North’s capital, the 2 million square-meter theme park is known to have been set up and spearheaded by Jang, and features propaganda structures as well as a folk village.

“Since early last month, the sound of explosions has been heard inside the park,” the source said. “Rumor has it that the folklore park is being dismantled.”

Another Pyongyang watcher said that the North’s leader is said to have expressed negative views that the park reminds him of the relative he ordered killed.

“The closure of the park appears to reflect Kim’s uneasiness about the possibility that traitors can show up at any time even as he has consolidated power through the reign of terror,” the source added.

In 2013, Kim ordered the execution of his once-powerful uncle Jang, accusing him of treason. The move is seen as a step to reaffirm the leader’s power which he inherited in late 2011 after the sudden death of his father.

The North’s leader has strengthened his reign of terror by purging and executing scores of party and military officials.

My sources tell me that the park is definitely closed, but cannot confirm anything else in the story.

You can read the full story here:
N.K. leader orders theme park closure to erase executed uncle’s legacy: source
Yonhap
2016-6-14

ORIGINAL POST (2011-12-6): Back in April 2010 I wrote about how the DPRK had launched the construction of a “Folk Village” (평양민속공원) at the foot of Mt. Taesong in eastern Pyongyang. In May of 2010 I posted new satellite imagery of the park’s construction.

Last weekend I was discussing this facility with some friends, and today KCNA posted images of the park’s construction (all below)–so I thought it would be time for another update.

Using North Korean television and print images (plus a little common sense) I have been mapping out all of the attractions in the new folk village:

The Google Earth satellite image above is dated 2010-10-6, nearly a year after the project was announced on North Korean television in December of 2009.  Despite the image being taken nearly a year after the park’s construction began, I have identified: The Ryugyong Hotel, Pyongyang Ice-Skating Rink, Sosan Handball Gymnasium, Mangyongdae Children’s Camp, Monument to the Party Founding, Grand People’s Study House, West Sea Barrage, Arch of Triumph, Tower of the Juche Idea, Chollima Monument, Okryu Monument, Tangun’s Tomb, an ancient dolmen, and a walking path shaped like the Korean Peninsula.  There are still quite a few places to label, so contributions are welcome.

Here is what KCNA recently had to say about the project (2011-12-6):

The construction of the Pyongyang Folklore Park is progressing apace in Korea.

Frame assembling and interior projects have almost been finished in the park construction.

The park, which is being built in a large area at the foot of Mt. Taesong, will showcase the history of the nation and miniatures of historic relics, structures built in recent decades, folk village, folk amusements and Mts. Paektu and Kumgang.

Visual aids showing the 5 000-year-long Korean history will be installed in the quarter of history at the entrance of the park.

More than 130 full or reduced-sized historic relics, including the mausoleums of King Tangun and King Tongmyong and the monument to the great victory in the battle in northern area of Korea, are taking shape in the quarter of historical interest.

The present era quarter will include miniatures of the Tower of the Juche Idea, Party Founding Memorial Tower, West Sea Barrage, Arch of Triumph, Chollima Statue and other monuments and edifices.

The folk village quarter is full of models of palaces, government offices and dwelling houses dating back to Koguryo Kingdom (B.C. 277-A.D. 668), Koryo Kingdom (early 10th century-late 14th century), Palhae Kingdom (698-926) and Ri Dynasty (1392-1910).

Restaurants serving cuisines peculiar to different localities are also being built there.

The visitors will be able to enjoy views of Mts. Paektu and Kumgang and folklore amusements like archery, ssirum (Korean wrestling), seesawing, swinging and yut-game in the park.

Although the above satellite image is dated 2010-10-6, the recent photos from KCNA (2011-12-6) show some progress has been made:

 

 

 

UPDATE: According to a later article published in the Choson Ilbo (2011-12-8), two of the temples in the 5th picture above  are replicas of  Dabotp and Seokgatop in Gyeongju’s Bulguksa Temple.  These are cultural relics of the southern Silla Kingdom, not the northern Koguryo Kingdon to which the DPRK frequently claims to be the cultural inheritor.

There is only one other “Folk Village” in the DPRK of which I am immdeiately aware, and it is in Sariwon, North Hwanghae Province. See it in Google Maps here. I “helped” with its construction when I visited the DPRK in 2004. I did not really help, but the photo op for the North Korean media made it look like I did.

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Where do North Korea’s nuclear scientists go shopping?

November 27th, 2016

yongbyon-market-2016-8-21

Pictured Above (Google Earth): A 2016-8-21 image of the general market (종합시장) at the Yongbyon Nuclear Research Center residential complex.

Needless to say, security at the Yongbyon Nuclear Research Center is tight, and not much is known (publicly anyhow) about the lives of the people who live there. However, with commercial satellite imagery (and a little know-how), we can get a glimpse of life inside the security perimeter.

No doubt the residents of the compound live in “gilded cages,” enjoying above-average standards of living but under greater control and surveillance. However, in June of 2003, the year that the DPRK legally converted decades-old “farmers’ markets” to “general markets” (a change that involved not only a change in name, but also a change in administration), the DPRK constructed a new general market for residents of the Yongbyon Nuclear Research Center which appears to have replaced the smaller outdoor farmers’ market.

yongbyon-market-2003-6-2

Pictured above (Google Earth: 2003-6-2): Construction of the new general market outlined in yellow. Structure of the former farmers market that was torn down in orange.

The market appears to be composed of four warehouses each with a floor-space of appx 550 square meters (2,200 square meters total). It is possible that each building specializes in some form of commerce (food, household goods, etc). In some of the historical imagery of the market we can see people outside meandering between the buildings.

It is interesting to think that there are vendors here who are probably not related to the nuclear program. No doubt these individuals would have to be granted security clearances to work in this market.

But perhaps most notably about the residential quarter, we can see 15 new apartment buildings being constructed over the last couple of years.

yongbyon-housing-2014-9-24

(Google Earth: 2014-9-24)

yongbyon-housing-2015-11-9

(Google Earth: 2015-11-9)

yongbyon-housing-2016-8-21

(Google Earth: 2016-8-21)

I do not know if these new apartments are for scientists or janitors, but their construction marks a not-so-subtle signal that employment in the area is on the increase.

Here is coverage of my work on this post in RFA and KBS (English, Korean).

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North Korean leader visits fishing station on the East Sea, emphasizes raise in catch

November 22nd, 2016

Institute for Far Eastern Studies (IFES)

Kim Jong Un visited a fishing station in the East Sea (Sea of Japan) area, and ordered that the catch be raised. Under leader Kim Jong Un, phrases like ‘the Golden Sea’ and ‘Socialist scent of the Sea’ have become prominent. The Korean Central News Agency (KCNA), North Korea’s official wire service, reported that Kim visited the May 27 and August 1 Fishing Stations and conducted on-the-spot guidance.

The report stated that “Workers in the people’s army fishing sector and fishermen fulfilled their annual target set for them by respected comrade Kim Jong Un by November 7th by waging a fishing battle. They achieved dazzling success in catching 10,000 tons of sailfin sandfish, and continue to raise the amounts caught.”

Kim, first visiting the May 27 Fishing Station, indicated his satisfaction, saying, “I put many issues aside to come and convey this extraordinary news of success in the fishing industry to all the people. . . . Seeing the fishing station and apartments unfold before me like a picture as I was coming here was worth the trip. The East Sea area has a town in a state of ecstasy.”

The KCNA also reported that the May 27 fishing station had been built on the orders of Kim Jong Un, who also visited the site while it was under construction back last year in March. “It is another pride of the Songun era, with all the necessary and cutting edge facilities needed for the production of aquatic products and for the lives of fishermen.”

Having seen the fishing station, Kim said: “The People’s Army has shown how the Party’s policy, which states that using the mental energy of people one can create something from nothing, can be achieved. . . . The docks of the East Sea overflow with the smell of fish. I feel pleased to think of the parents who sent their children to guard the fatherland feeling happy when they smell this.”

Following this, Kim visited the August 1 Fishing Station, and said: “Seeing the fish piled high like a mountain for enough supply until next September I feel very happy, and feel all my fatigue leave me. . . . The organization at this facility is most satisfactory.” The Fishing station supplies orphanages, kindergartens, schools and nursing homes across the country with fish.

Kim Jong Un also discussed achievements in resolving the following problems: scientific fishing that enables fish to be caught regardless of the season; achieving a high standard of expertise, modernization and use of information technology in production and operations, introducing modern fishing methods, and increasing the catch; guaranteeing that fishing happens on more than 300 days, not allowing the seasons to keep the seas empty; equipping facilities with high quality refrigeration; taking a deep interest in the lives of fishermen; and stimulating energetic competition between fishing stations and individual boats.

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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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