DPRK officials receiving SEZ training in China

July 4th, 2012

Pictured Above: Tianjin’s location relative to the DPRK

The Daily NK reports:

“A group of 20 trainees made up of economic officials and academics from the DRPK Ministry of Trade has been receiving training in Tianjin since the end of May upon an invitation from the Chinese Ministry of Commerce.”

“The aim of the training is the vitalization of North Korea’s special economic zones at Hwanggeumpyeong, Wihwa Island and Rajin-Sonbong,” he added.

According to the source, the North Koreans, who come from the finance and economics, administration and taxation sections of the ministry, will remain in China for two months. The costs of the program, including accommodation and training fees, are being covered by the Chinese side, and they are staying in a state guest house.

For the first month, the 20 were reportedly due to receive training in techniques pertaining to the operation, management and attraction of investment to SEZs from Chinese experts. For the second, they are set to receive field training in Shanghai, seeing how China’s SEZs operate.

Previous posts on Hwanggumphyong are here.

Previous posts on Rason are here.

Read the full Daily NK story here:

20 NK Officials Getting Schooled in Tianjin
Daily NK
Chris Green
2102-7-4

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Friday fun: Juche anti-virus and Konglish

June 29th, 2012

A valued reader sends in this great photo taken in Pyongyang back in the early 2000s:

Click image for larger version

The picture is of a computer in Pyongyang running a North Korean anti-virus program.  The Program is called KJAV (Korea Juche-Oriented Anti-Virus). The use of English in the software tells me that this product was intended for export rather than for domestic use, but who knows, there could be a few computers in the DPRK running KJAV. I have yet to read any publications by the “Three Stars of Paektu” (or do we have four now?) on the role that Juche ideology plays in the development of anti-virus software, but I am sure there is a connection…somewhere.

And I also received this older example of North Korean “Konglish”:

The poster is for the 13th Annual World Festival of Youth and Students which took place in Pyongyang back in 1989. The caption of the poster reads “How the forever night of Pyongyang it is!”

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Some recent publications

June 29th, 2012

Networks, Trust, and Trade: The Microeconomics of China–North Korea Integration
Stephan Haggard and Marcus Noland
Peterson Institute Working Paper (May 2012)

The Microeconomics of North–South Korean Cross-Border Integration
Stephan Haggard and Marcus Noland
Peterson Institute Working Paper (May 2012)

Gender in Transition
Stephan Haggard and Marcus Noland
Peterson Institute Working Paper (June 2012)

New East German and Soviet Evidence on North Korean Support to South Korean Political Parties and Labor Unions
James Person
Wilson Center, NKIDP

DPRK Perspectives on Korean Reunification after the July 4th Joint Communiqué
Jong-Dae Shin
Wilson Center, NKIDP

Zhou Enlai and China’s Response to the Korean War
Charles Kraus
Wilson Center, NKIDP

China and the Post-War Reconstruction of North Korea, 1953-1961
Shen Zhihua and Yafeng Xia
Wilson Center, NKIDP

Budget Blanks and Blues
Aidan Foster-Carter
38 North

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Songbun rears its head again…

June 29th, 2012

UPDATE: Read here about increasing numbers of North Korean workers legally taking up work in China.

ORIGINAL POST (2012-6-29): Robert Collins recently published a report with HRNK on the DPRK’s songbun system. Previous posts on Songbun here.

Though some argue that the “Arduous March”, grassroots marketization, and the rise of official corruption has diminished the importance of songbun within the North Korean system, this article in the Daily NK  (which never uses the word ‘songbun”) makes the case that it is still important in one highly visible sector: overseas workers.

According to the Daily NK:

A North Hamkyung Province source told Daily NK on the 27th, “The process of choosing expatriate workers is very sensitive, even though the only target is Pyongyang-based factory and enterprise workers.”

According to the source, backgrounds are checked thoroughly, and single people may not take part. Married workers also need to obtain permission from the National Security Agency affiliated to the enterprise with which they are registered.

Prior to sending the workers abroad, the People’s Safety Ministry also checks each individual’s origins, the whereabouts of his or her direct family and if anyone in that family has spent time in a detention facility and why. They also check the marital status and criminal records of more distant relatives.

Despite the hard nature of the work that waits in China and the difficulty of obtaining a position, the number of applicants is huge, the source went on. And with single people ineligible as a measure to decrease the risk of defection, the source even commented that “single workers are rushing to get married,” adding also, “Pyongyang has caught marriage fever.”

“Competition is fierce because they would prefer to go away to a place where factories are running and they can get paid,” he pointed out. “Cadres and NSA agents in charge of the process are doing well out of the bribes. Some people are even borrowing money to bribe the authorities, saying that they will pay them back when they return from China”.

Commenting on the situation, Kim Seung Cheol, a defector who heads North Korea Reform Radio, said it is no surprise. He explained, “This is the only way working people can make any real money. It is similar to the American dream.”

Read the full story here:
Workers Face Fierce Fight for China Role
Daily NK
Choi Song-min
2012-6-29

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North Korean high-ranking official visits Taiwan

June 28th, 2012

Institute for Far Eastern Studies (IFES)
2012-6-28

A high ranking North Korean official visiting Taiwan gave a statement that, “North Korea is using most of its resources for national defense and military.”

This was revealed in a report released by KOTRA Taiwan Trade Mission. In this report, Kim Jong Gi, the chairman of the Committee for the Promotion of International Tradeof DPRK visited the Taiwan-(North) Korea Business Association to attend a meeting discussing North Korean business trade.

Kim criticized South Korea, Japan and other neighboring countries for harboring antagonistic attitudes toward communist North Korea, and especially the United States for enforcing “violent sanctions” against North Korea.

He also admitted the country was suffering from economic hardships and food shortages since 1995 with four years of continuous natural disasters. In 2011, the total food needed is around 6.5 million tons but the actual production output was only 5.1 million tons, leaving the country 1.4 million tons short.

Kim also explained that North Korea experienced similar economic growth as South Korea and Taiwan in the 1970s and 1980s but as socialist countries began to collapse one after another in the early 1990s, North Korea’s economic trade agreements with other nations became null and hence hindered its economy and trade.

At that time, North Korea was signing purchase agreements on magnesium oxide (about 800,000 ton) with Eastern European countries every year and barter trade with other socialist nations. But with the fall of socialist countries, North Korea quickly lost its long-term trading partners and it failed to take appropriate and necessary actions. Thus, it fell into the vicious cycle of unsold commodities with insufficient funds, leading to inevitable economic downturn.

Kim was the highest official from the DPRK to visit Taiwan. The purpose for his visit was to 1) attract investment from Taiwan for Hwanggumpyong Island and Rajin-Sonbong Special Economic Zone, and 2) express gratitude toward the Tzu Chi Foundation, a Buddhist charity for continuous assistance to North Korea. The Tzu Chi Foundation is reported to have sent aid to North Korea nine times.

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North Korea aiding Syria to upgrade Scud D capability

June 27th, 2012

According to IHS Janes:

In marked disregard of UN sanctions (Resolutions 1718 from 2006 and 1874 from 2009 both prohibit North Korea from conducting security-related exports), North Korean technicians and engineers stationed in Syria are working with specialists from Syria’s Scientific Studies and Research Centre (SSRC) to develop an arsenal of advanced SSMs. Co-operation between Pyongyang and Damascus also constitutes a Syrian violation of the same two resolutions, which, among other sanctions, include “an arms embargo, which also encompasses a ban on technical training or services”.

Nevertheless, IHS Jane’s has learned that engineers from North Korea’s Tangun Trading Corporation are working with engineers from the SSRC’s Project 99 in a compound located in Jabal Taqsis, near the city of Hama, to advance the Scud D development programme.

Read the full story here:

North Korea aiding Syria to upgrade Scud D capability
IHS Janes
Robin Hughes
2012-6-27

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A British diplomat’s observations of daily life in the DPRK

June 26th, 2012

Ambassador John Everard has just released a new book on the DPRK, Only Beautiful, Please: A British Diplomat in North Korea.

Click image to order at Amazon.com!

Listen to a presentation on the book at Brookings here.

Below is the summary:

All too often, coverage of Democratic People’s Republic of Korea (DPRK) focuses on its nuclear ambitions, military culture, and the outsized personae of its leaders. From 2006 to 2008, former British ambassador to North Korea John Everard lived in Pyongyang from several months before the DPRK’s first nuclear test almost until Kim Jong Il’s stroke in 2008. During his travels around the DPRK, Everard had the rare opportunity to speak to ordinary North Koreans.

On June 25, the Center for Northeast Asian Policy Studies (CNAPS) at Brookings and the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) at Stanford University hosted John Everard for a discussion of his book, Only Beautiful, Please (Shorenstein APARC, June 2012) and his observations of daily life in North Korea. Panelists included David Straub, associate director of the Korean Studies Program at Stanford University and Brookings Senior Fellow Jonathan Pollack. Senior Fellow Richard Bush, director of the Center for Northeast Asian Policy Studies at Brookings, moderated the discussion.

The ambassador earlier published a paper with the Korea Economic Institute on North Korean markets.  Learn more about that here.

Ambassador Everard also gave a speech at the Korea Society in New York.

Hat tip to Marmot’s Hole.

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Tumen – Namyang trade

June 26th, 2012

Pictured above: The Namyang (DPRK) – Tumen (PRC) border (Google Earth:  42.954725°, 129.850223°). A big thanks to Christopher Green for assistance.

Back in 2010, Asahi and KBS reported that a market had opened in Tumen (PRC) to facilitate trade with the DPRK. The report mentioned that Chinese traders were permitted to cross into Namyang (DPRK) to buy goods which could then be exported and sold in the Tumen market (tax free up to a specified level). It is unclear if North Koreans were permitted to travel to Tumen to trade in the market.  According to the report :

The market in Tumen, Jilin province, opened on Oct. 13. It appears to be the latest development in growing economic exchanges between Beijing and Pyongyang following a visit to China by North Korean leader Kim Jong Il in August and moves to secure a smooth transition of power to his third son, Kim Jong Un, the sources said.

The market, which has a total space of about 10,000 square meters, is located on the banks of the Tumenjiang (Tumengang in Korean) river, which serves as the common border between the two countries.

Currently, the market is open twice a week, but there are plans for it to become a daily feature in the near future, the sources said.

According to the sources, Chinese residents in Tumen, which is located inside the Yanbian Korean Autonomous Prefecture within Jilin province, can obtain travel permits to North Korea by presenting identification.

With entry permits in hand, the Chinese are able to cross the river to Namyang, where they are allowed to buy products at designated areas, provided they return to China the same day.

Purchases worth up to 8,000 yuan (about 96,000 yen, or $1180) are treated as duty-free and can be sold at the Tumen market.

The sources said about 150 people showed up at the market on Oct. 13, including merchants as well as ordinary citizens.

The Daily NK reports this month (June 2012) that now Chinese traders are able to enter the DPRK and sell goods to the North Koreans:

Chinese traders are operating with the permission of the North Korean authorities in the public market in Namyang, part of rural Onsung County in North Hamkyung Province.

The news has aroused considerable surprise, even arousing claims of a ‘Kim Jong Eun-style opening’.

A North Hamkyung Province source explained the scene to Daily NK today, saying, “From the start of this month, Chinese traders have been coming through Tumen to trade with locals in Namyang market. They are staying from 9AM to 5PM.”

Namyang has a small population and lies far from significant population centers. However, there is a customs house located in the immediate vicinity, making it a key contact point for cross-border trade.

According to the source, “Somewhere between 50 and 70 of them come in for the day, and take up around a third of the stall space.” Namyang market used to have approximately 100 stalls, but it has apparently been expanded to accommodate the new arrivals.

The Chinese traders sell a range of items, including some that are formally forbidden such as grains, but also fruits, processed foods including instant noodles, clothing and shoes. Most also take the chance to trade the other way, buying natural products such as seaweed and seafood, wild herbs and mushrooms to sell in China.

The move is surprising because while ethnic Chinese citizens residing in North Korea have long played the role of wholesaler to the country’s domestic markets thanks to the relative ease with which they can traverse the Sino-North Korean border, it is unprecedented for ordinary Chinese citizens to be allowed to trade directly in domestic North Korean markets.

Naturally, most North Koreans in the area welcome the new presence, because it both shortens supply chains and brings down prices, while also allowing them to order products directly from China and, with a slice of luck, receive them within 24 hours.

According to the source, “There are even people already coming up from Chongjin to trade fish with the Chinese! The security services are cracking down on cross-border activities, but the number of people is continuing to rise all the same.”

However, existing North Korean traders do harbor unease at the new situation, mostly because they are being forced to yield market share to the Chinese, whose products are frequently cheaper and mostly of a higher quality than those they offer. In many cases, the North Korean traders have little hope of competing with their Chinese counterparts, not least since the latter can move more freely between the two countries.

The move is said to be one outcome of Chinese demands made when Kim Jong Il visited North Korea’s sole major ally in 2010. As such, it joins the leasing of port facilities at Raijin and Chongjin and the construction of a road between Namyang and Chongjin as outcomes of the former leader’s visit.

However, it could just as easily be rescinded as continued. According to the source, “Onsung County cadres say that they opened up because the General (Kim Jong Il) ordered it, but that comrade Kim Jong Eun has said they need to keep a close eye on things. Because of the [freedom of information] effect it might have on the people, a limit to the number of Chinese people being allowed in has been set.”

In one of few previous examples of something similar, Chinese citizens were permitted to trade in the immediate vicinity of Wonjeong-ri Customs House near the special economic area at Raijin-Sonbong in around 1996. However, this was not allowed to become permanent.

Chris Green also wrote more extensively about this development.

Read the full story here:
50-70 Traders Arriving in Namyang Daily
Daily NK
Choi Song Min
2012-06-20

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KCNA announces new printing joint venture company

June 26th, 2012

 

Pictured above: A KCNA image of the factory and the view from Google Earth (39.043378°, 125.728149°)

According to KCNA (2012-6-25):

Pyongyang, June 25 (KCNA) — The Printing Factory of Tongbaek Printing Joint Venture Company [동백인쇄합영공장] under the Foreign Languages Publishing House was commissioned with due ceremony on Monday.

The factory was jointly established by the Foreign Languages Publishing House of the DPRK and the Oriental Yongli Hong Kong Int’l Investment Co., Ltd. and Jiangsu Zhongcai Printing Co., Ltd. of China. The factory will produce and sell varieties of printed materials and trade marks.

Attending the ceremony were Ri Kwang Gun, chairman of the Commission for Joint Venture and Investment, officials concerned and employees of the factory, Huang Junjie, vice mayor of Danyang City, Jiangsu Province of China, personages of the two Chinese companies, Wu Shiguang, councilor in charge of culture, and officials of the Chinese embassy here.

Choe Kyong Guk, director and editor-in-chief of the Foreign Languages Publishing House, addressing the ceremony, said that technicians and builders of the two countries built the factory in a short span of time.

He expressed belief that the factory would make a positive contribution to meeting the interests of the peoples of the two countries.

Jiao Xiaoping, manager of the Tongbaek Printing Joint Venture Company, in a congratulatory speech referred to the process of the construction of the factory, stressing the need to operate the company well.

At the end of the ceremony, the participants planted trees and looked round the production processes.

A reception was given on the same day.

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DPRK won’s declining value in 2012

June 26th, 2012

Chris Green writes in the Daily NK:

The value of the North Korean currency against the Chinese Yuan has declined markedly since the beginning of this year, information from inside sources has revealed.

By the beginning of June, 100RMB was trading in Musan, North Hamkyung Province for 80,000 North Korean Won, marking a 25% reduction in value since January, when 100RMB was worth around 60,000 Won.

A source from the area told Daily NK on the 25th, “The exchange rate changes even over the course of a day, but yesterday it was in the 800’s [1RMB=800 North Korean Won]. People are saying that our money is turning to scrap paper.”

“Because of this, prices in the jangmadang [market] are following suit,” the source went on. “However, supplies are still massively insufficient, and everything is gone from stalls by the end of the day.”

According to statistics published regularly by Daily NK, at this time last year 100RMB was trading for between 43,000 and 45,000 North Korean Won (regional variations apply). This means that the price has now almost doubled in just 12 months.

Looking at the rises in more detail, by October 2011 the price of 100RMB had reached 50,000 Won, mid-November saw it hit 58,000 Won, and by mid December it had reached 60,000 Won. Fast forwarding to April 2012 and it was 67,000 Won, and by mid May 74,000 Won.
….
Notably, almost the only products in the jangmadang that are now traded in local currency are food and a few other very low-priced items; everything else, from clothing to electronics, is bought and sold in foreign currency.

Read the full story here:
The Inexorably Rising RMB Exchange
Daily NK
Chris Green
2012-6-26

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