Archive for August, 2009

Chinese tourists stay away from North Korea after nuclear test

Sunday, August 16th, 2009

By Michael Rank

Far fewer Chinese tourists are visiting North Korea from the border towns of Yanbian and Yanji due to nerves over the country’s recent nuclear and missile tests, a Chinese website reports.

This is normally the height of the tourist season, the report notes, but this year hardly any tourists taking tours to visit the nearby North Korean port city of Rajin (Najin) 라진/나진. “In previous years there have been about 300 or 400 tourists a day [crossing into North Korea] at this time, but recently there have been only about 20,” it quotes a Yanbian travel agent as saying.

Two-day trips from Yanji cost only 800 yuan ($117) per person but because the nuclear testing and rocket launch sites are nearby most tourists are keeping away, the report adds.  Rajin is in fact about 250 km north of the nuclear testing site near Gilju (Kilchu) 길주 but who know what is safe…?

The report claims that things are different in the biggest border city Dandong and that tourists are crossing the frontier at normal levels there.

But this was contradicted by a surprisingly frank report in the China Daily earlier this month which quoted Li Peng, general manager of the Dandong branch of the State-owned China International Travel Service (CITS), as saying: “The revenues from four-day tours and business trips to the DPRK have plunged at least 50 percent compared to last year.”

He said about 30,000 tourists have traveled with his company to the DPRK from Dandong in the past two years, with a four-day visit costing around 2,400 yuan ($350) per person.

“But during the first seven months of this year, we have seen 2,000 make the trip. Many canceled because of safety concerns,” he said, adding that the recent capture and imprisonment of two journalists from the United States had done nothing to ease those concerns.

The journalists have since been released, but it’s unlikely this will result in a massive rebound in China-North Korea tourism.

Another China Daily report was remarkably frank about smuggling which has also been badly hit by the nuclear furore. It also quoted Dandong Federal Business Corp Chairman Shan Jie, who said: “Most of the nearly 1,000 legal enterprises involved in border trade here have stopped operations.”

Meanwhile, the latest report focuses on a North Korean waitress in Dandong who “sports a luxury Gucci watch on her left wrist – and a Democratic People’s Republic of Korea (DPRK) flag pin on her chest.”

“Her restaurant is one of Dandong’s most luxurious and one of the few establishments in the Chinese city bordering the DPRK that is still seeing brisk business in the wake of Pyongyang’s nuclear test in May and subsequent missile launches.”


DPRK restaurant in Dandong

Sunday, August 16th, 2009

China Daily reports on a North Korean restaurant in the Chinese border city of Dandong (hat tip to O.P.). According to the article:

Choe says she came to Dandong four months ago. Her restaurant is one of Dandong’s most luxurious and one of the few establishments in the Chinese city bordering the DPRK that is still seeing brisk business in the wake of Pyongyang’s nuclear test in May and subsequent missile launches.

The Korea Restaurant, is located near the only bridge linking Dandong and the DPRK, through which the Chinese army reached the DPRK and joined the Korean War in 1950. All of about 20 tables were full on the Saturday afternoon we visited recently, despite prices that are double that of common restaurants in Dandong serving the same food.

Some men from the DPRK in dark yellow or blue suits, with pins of DPRK leader on their chests, also dined there.

Choe’s colleagues, equally young and attractive, wait at tables in blue skirt suits and light makeup. They wear stylish, high-heeled shoes and watches, serving guests with smiles.

“The main reason for the restaurant’s good business is the DPRK waitresses. It’s the easiest way to meet people from that country,” said a taxi driver, surnamed Li.

“Though border trade has been slashed, more and more people are interested in the DPRK after the recent events. You can even see more Westerners here,” Li said.

Shan Jie, board chairman of the Dandong Federal Business Corp which runs cross-border trade, said the waitresses “are by no means common DPRK citizens”.

“They’re all children of DPRK cadres and graduates of Kim Il-sung University. They can speak Chinese, and are very talented in singing and dancing,” said Shan, who has conducted businesses with the DPRK for 16 years. Most of the DPRK cadres attend that university, he said.

The girls were sent to Dandong for training and will have “a promising future as civil servants” when going back home, Shan said.

“It’s a good opportunity for them to practice Chinese and meet Chinese people of all levels. Besides, they earn money for their country,” he said.

Pyongyang has many restaurants in Dandong, and many DPRK ministries such as the ministries of trade and security have their own restaurants there, Shan said.

Choe said the Korea Restaurant is of the same restaurant chain as Beijing Pyongyang Begonia Flower Restaurant, a famous luxury Korean restaurant said to be run by a DPRK merchant with a military background.

When asked whether she is the daughter of DPRK officials, Choe switched to speaking in Korean with a colleague before ending the conversation.

“The girls here mostly work for one and half years I’ll stay for about three years,” Choe said.

“Dandong is pretty and people here are quite nice. But I will go back to my country, Pyongyang is the most beautiful place in the world.”

If any readers in Dandong could help identify where these restaurants are, I would appreciate it.  I would like to mark them on Google Earth and Wikimapia.

Read the full article here:
DPRK waitress in China shares a day in her life
China Daily
Li Xiaokun and Wang Huazhong


Friday Fun: Nick Bonner, Kim Yong Sik, and Paul Romer

Friday, August 14th, 2009

1. Nick Bonner, founder of Koryo Tours and producer of three documentaries filmed in the DPRK has given a recent interview to World Hub.  Mr. Bonner is currently working on a new film–a North Korean romantic comedy:

“We are hoping to start shooting in December. If that does not kill me then nothing will. We will keep people updated on Facebook and our newsletter and I think the making of the film will be one heck of a ride. Think revolutionary coal miner who wants to become a trapeze artist. But how does she accomplish this? With a script like that how can we go wrong!”

2. Kim Yong Sik was born in 1949. Having lived in Seoul all his life, he discovered his unique talent about 15 years ago; when others started to notice he looked like North Korea’s “Dear Leader.” Since then, Kim Yong Sik has made a living, part time, imitating Kim Jong Il in movies, television commercials, weddings and Japanese TV dramas.


3. Paul Romer’s TED talk: How can a struggling country break out of poverty if it’s trapped in a system of bad rules? Economist Paul Romer unveils a bold idea: “charter cities,” city-scale administrative zones governed by a coalition of nations. Could Guantánamo Bay become the next Hong Kong?  Watch the presentation here.


DPRK preparing for jump in construction demand

Friday, August 14th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-8-13-1

As North Korea continues to pursue the creation of a Strong and Prosperous Nation by 2012, it is now reportedly building a large-scale construction materials facility to meet expected growth in building demand. North Korean authorities have designated the Daedong River Tile Factory, visited by North Korean leader Kim Jong Il on the 13th of last month, as a large-scale construction materials distribution center, and expect the second stage of its construction to be complete by April 2012.

The Tongil Sinbo, a weekly North Korean publication, printed in its recent (July 18) edition that upon completion of the second stage of construction, the facility would be capable of producing 225 million cubic meters of tiles, shingles, plastic materials and other building supplies. The first stage of construction began in July 2003, and was only recently completed, after five years and nine months, opening on April 15. North Korea is expected to invest 10.5 billion Won (80.77 million USD) into completing the second stage of construction, a considerable investment in light of the troubles facing the North‘s economy.

Upon completion of the facility, taking up more than 225 thousand pyong, it will produce indoor and outdoor tile, polished marble tiles, composite glass tiles and other porcelain and plastic products, as well as pre-fabricated housing components and coal gas. According to the newspaper, it will also house its own electrical generator.

When Kim Jong Il visited the factory, located near the Chollima Steel Complex in South Pyeongan Province, he declared the site to “hold a critical role in the development of the country’s construction industry,” stating that upon completion of the second stage of construction, the factory would serve as a “large-scale base for all modern construction projects.”

North Korea is currently pressing ahead with large-scale redevelopment projects in Pyongyang and other major cities, with one goal being the construction of 100,000 new homes by the year 2012. The Workers’ Party of Korea newspaper, the Rodong Sinmun, has called for all citizens to “make something from nothing” in an effort to build up each region. One point of interest to North Korea-watchers as this massive construction scheme unfolds is that a new position was created to oversee the project, and Kim’s third son, Kim Jong-un, was appointed.


The new Majon Hotel

Thursday, August 13th, 2009

UPDATE: With a big hat tip to Korea Beat, I have located the new Majon Hotel in North Korea.  See a satellite picture of it here.  Here are some pictures  of the inside c/o the Choson Ilbo.



According to the Choson Ilbo:

North Korea on Monday celebrated the completion of what it has hailed as a “world-class” hotel in the Majon resort area in Hamhung, South Hamgyong Province, North Korean Central Broadcasting reported Tuesday.

The broadcast said the Majon Hotel “is equipped with top-class accommodation and recreation facilities such as an indoor swimming pool, a steam sauna, a public bath, and even a beach resort.”

Although it did not specify the size, the broadcast called the hotel a “creation that illuminates the era of the Korean Workers’ Party,” suggesting it is relatively luxurious.

The completion ceremony was attended by key leaders of the party, the government and the military, including People’s Armed Forces Minister Kim Yong-chun, party Secretaries Kim Ki-nam and Choe Thae-bok, and Prime Minister Kim Yong-il.

In a congratulatory speech, Kim Ki-nam said the hotel was “another proud creation built thanks to leader Kim Jong-il’s love of the people in the military-first era.”

The Majon resort area where the hotel is located is famous throughout North Korea. It has a sandy beach park 6 km long and 50-100 m wide along the east coast and 16 recreational buildings, 13 public buildings, and a boy scout camp — all on an area measuring some 3 million sq. m.

Here is the official KCNA press coverage:

Majon Hotel Completed

Pyongyang, July 28 (KCNA) — Modern Majon Hotel sprang up at the Majon recreation ground in Hamhung City, a good destination of holiday makers.

The hotel has all modern cultural and welfare facilities such as bedrooms of various sizes and styles, restaurants, indoor swimming pool, saunas and bath facilities. It has also a bathing resort. This is another edifice to be proud of in the era of Songun, a product of General Secretary Kim Jong Il’s love for the people as he has always worked hard to provide people with better conditions for their recreation.

A ceremony for the completion of the hotel was held on the spot on Monday.

Present there were Premier Kim Yong Il, Minister of the People’s Armed Forces Kim Yong Chun, Secretaries of the Central Committee of the Workers’ Party of Korea Choe Thae Bok and Kim Ki Nam, department directors of the C.C., WPK, officials concerned and employees of the hotel.

Kim Ki Nam in his speech at the ceremony underscored the need for the staff of the hotel to steadily improve the service so that Kim Jong Il’s boundless love may reach people as quickly as possible.

At the end of the ceremony the participants looked round the interior and exterior of the hotel.

Here is the location of the beach.  Some travelers have been there, but photos of the area remain scarce.  If anyone comes across a photo of the hotel, or can identify the exact location, please let me know.  Parts of the beach and surroundings are still not in high resolution on Google Earth, so this also complicates the discovery of the hotel’s location.

Read the full stories here:
N.Korea Completes ‘Luxury’ Resort Hotel
Choson Ilbo



DPRK aims to increase food rations

Wednesday, August 12th, 2009

Kim Jong il sets sights on increasing processed food rationing in order to improve the daily lives of the people
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-8-10-1

North Korean authorities, recognizing that rationing of processed foods is directly linked to the daily lives of the residents of North Korea, are concentrating on a policy of increasing distribution as part of the campaign to build a ‘Strong and Prosperous Nation’ by 2012. The policy calls for the construction of regional food processing facilities throughout the country and using domestic ingredients for all processed foods. In addition, the government plans to undertake diversification of small-scale factories in order to produce soybean paste, soy sauce, cooking oil and other staples, as well as noodles, rice-cake and other foods, all kinds of side dishes, and alcoholic beverages.

This movement was announced in concurrence with Kim Jong Il’s visit to the Samilpo Special Products Factory and Store, both run by the military, on April 7, just two days after the North’s launch of a long-range rocket. This factory, on the bank of the Daedong River, produces over 350 kinds of edibles, including noodles, rice-cakes, oil, sweets, alcoholic drinks, processed meats and fish products. During his visit, Kim Jong Il is said to have stated, “Today, I am happier than during the launch of the Kwangmyeongseong 2,” emphasizing his interest in boosting food production.

On July 15, (North) Korean Central Broadcasting announced the formation of construction offices in Jagang, North Pyongan and other provinces to oversee the building of food production complexes, and the dispatch of “shock troops” to bolster construction efforts.

Recently, the construction of large-scale factories to produce foodstuffs out of each region’s local stock has been pursued in every province in the country. Even at the Cabinet level, a ’Production Workers’ Conference’ was held, bringing together responsible authorities and local production experts to discuss a course for quickly improving services provided to the general population.

In order to effectively implement the North’s policy of increasing rations of foodstuffs, the Standing Committee of the Supreme People’s Assembly issued an order to establish a Ministry of Foodstuff and Daily Necessities Industry.

As North Korea tries to implement this type of measure to boost production and rationing, failure to improve food shortage conditions and economic hardships while at the same time mobilizing the population in a drive to establish a Strong and Prosperous Nation has led to growing outcries among residents. North Korean authorities appear to be introducing these measures in order to placate these complaints.


Bureau 39 update

Wednesday, August 12th, 2009

Vanity Fair has published a lengthy article about the DPRK’s mysterious Bureau 39 which is allegedly behind a number of illicit activities such as counterfeiting US currency and cigarettes, smuggling drugs and bilking western insurance companies with fraudulent claims. The full article is worth reading here.  (h/t DPRK Studies)

Of immediate interest, here is the supposed location of Bureau 39 just south of the Grand People’s Study House:


Click image to enlarge

Here is a short excerpt:

Hamer’s three-year investigation—code-named Operation Smoking Dragon—began not with supernotes but with counterfeit cigarettes, which were being shipped by freight container from China into California ports by the millions. These, too, says Asher, originated in North Korea, and were the subject of a report by the Coalition of Tobacco Companies, one of whose investigators made an undercover visit, posing as a buyer, to North Korean factories in Pyongyang and the northeastern city of Rajin. These turn out fake Western brands, such as Marlboros, in such quantities that they generate as much as $720 million in gross revenue each year. Hamer set up a number of front operations to get inside the cigarette-smuggling business, and soon had many contacts who dealt with him as if he were a smuggler, too. In the spring of 2004, Hamer and his colleagues were asked by F.B.I. headquarters to see if they could acquire North Korean supernotes. One of Hamer’s best customers, Chao Tung “John” Wu, who eventually pleaded guilty to smuggling counterfeit currency, cigarettes, and narcotics, as well as conspiring to broker a deal for Chinese-made, shoulder-fired missiles, but died before he was sentenced, promised he could supply them with the help of a man who was a frequent visitor to North Korea—Wilson Liu. The notes were so good, Wu said at a secretly recorded meeting, “you can even go to Las Vegas and slide them into the machines—they take them right away.”


US Treasury sanctions another DPRK financial organization

Tuesday, August 11th, 2009

According to the Dow Jones Newswire:

The U.S. Treasury Department Tuesday announced sanctions on the Korea Kwangson Banking Corp., a bank the department says is tied to North Korea’s nuclear and weapons trade.

Treasury alleges that North Korea used the Korea Kwangson Banking Corp., or KKBC, to hide nuclear proliferation activities.

The department accuses the bank of providing financial support to Tanchon Commercial Bank and a unit of the Korea Ryonbong General Corp., both of which have already been identified by the U.S. government as weapons of mass destruction proliferators.

“North Korea’s use of a little-known bank, KKBC, to mask the international financial business of sanctioned proliferators demonstrates the lengths to which the regime will go to continue its proliferation activities and the high risk that any business with North Korea may well be illicit,” Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey said in a statement.

According to the Associated Press:

The sanctions mean bank accounts or other financial assets found in the United States that belong to the firm are blocked. Americans also are prohibited from doing business with the bank. It is based in North Korea and has operated at least one overseas branch in Dandong, China.

Further information:
1. Here is an earlier post that contains information on other sanctions imposed this year.

2. Aside from the US and UN, China has also “sanctioned” the DPRK this year.  See here and here.  No doubt they will react to the Dandong branch of KKBC as well. 

3. Stephan Haggard Marcus Noland call these kinds of actions “Whac-a-Mole.” Read their analysis here

4. Joshua notes that this company was one of the North Korean banks listed in Treasury/OFAC’s June 18th advisory about North Korean financial institutions engaging in money laundering activities.


DPRK shipping sugar to Iraq

Tuesday, August 11th, 2009

UPDATE: According to the Telegraph (of India):

But it transpired later that the management of the shipping company had asked the Mu San to loiter in Indian waters because they might get a better price for their cargo in India.

UPDATE:  The boat has been moved to yet another port for further inspection: Kakinada in Andhra Pradesh state.  Here is the location in Wikimpia.

ORIGINAL POST: This week there was a worry that another North Korean ship might be carrying military goods to Myanmar in violation of UN sanctions.  Despite the strange behavior of the North Korean crew, the ship appears to be shipping sugar to Iraq!

First–the chase (According to the New York Times):

The ship anchored without authorization in the Andaman and Nicobar Islands, a territory of India in the Bay of Bengal, last week, according to the Indian military.

Indian officials said it was carrying more than 16,000 tons of sugar bound for the Middle East. But the ship’s proximity to Myanmar, a North Korean ally, and the fact that it had no apparent reason to be in the area raised suspicions.

The coast guard intercepted the ship after chasing it for six hours, and detained 39 North Korean crew members.

After two days of searching and of questioning the crew, India’s Navy and Coast Guard handed the ship over to police and intelligence services, having found no evidence of illegal cargo, according to the Press Trust of India.

Ashok Chand, a senior police officer in the Andaman and Nicobar Islands, told Reuters that further tests were being conducted.

But it remains a mystery why the ship was in Indian waters at all.

India has watched warily for signs that North Korea is helping Myanmar build a nuclear reactor.

The investigation turned up some strange detials, but no UN violations.  According to UPI:

A preliminary search showed the ship, as stated by its captain, was transporting 16,000 tons of sugar from Thailand to Iraq, Indian media reports said.

The ship, M.V. Mu San is detained at Port Blair after dropping anchor without authorization off Hut Bay in the Andaman and Nicobar Islands in the Bay of Bengal Wednesday.

Mu San sailed off Thailand’s Laem Chabang port July 27 but an investigation showed it berthed in Singapore three days later, although that was not a port of call, and that the crew’s passports were not stamped in Singapore, the Times of India reported.

The report said authorities were interrogating the ship’s captain Yon Jung-sun and the other 38-member crew, with only one or two among them speaking English.

Further information:

1. Here is a great research paper on the DPRK’s merchant fleet.

2. Here are some stats on the DPRK’s flagged fleet from the CIA.

3. Here is the location of Hut Bay, where the ship was anchored.

4. Here is the location of Port Blair, where the ship was taken.

Read the full artilces here:
India searches North Korean ship

N. Korean Ship Searched for Radioactive Material
New York Times
Lydia Polgreen


The urban dimension of the North Korean economy: A speculative analysis

Sunday, August 9th, 2009

Chapter 11 of North Korea in the World Economy
Bertrand Renauld

(NKeconWatch: the whole paper is worth reading in full.  Below is the introduction.  Here is a link to the chapter in Google Books.


This chapter explores the urban dimension of the North Korean economy. Few areas of economic management of centrally planned economies have met with such widespread dissatisfaction and broad popular support for reforms as housing and urban development. This dissatisfaction arises from the peculiar systemic features of the “socialist city.” Since the early 1990s we have been able to study the economics of this type of city based on data from cities of the former Soviet Union, Central Europe, and also China and Vietnam. Of course, no such access to information exists today in North Korea.

As a starting point, I ask only one question: based on the body of knowledge that we have gained from other centrally planned economies (CPE), what are the systemic features of the North Korean urban economy that we expect to find? By so doing, the chapter applies to North Korean cities the method of “rigorous speculation” used earlier by Noland et al. (2000a) on North Korean macroeconomic and trade performance. According to Noland and his colleagues, “rigorous speculation” is the incorporation of fragmentary information into a consistent analytical framework that can clarify alternative scenarios regarding current economic conditions in North Korea. The results can then suggest suitable reforms to stimulate the economy.

Using a medical analogy, the focus is how the “personal history and diagnosis” of the North Korean urban system should be conducted some day. The analysis should not be misconstrued or misused: it is not offered as an actual diagnosis of the North Korean urban system. Rather, using our body of knowledge of the anatomy and physiology of the “socialist city,” it speculates about what we should expect to find in the Democratic People’s Republic of Korea (DPRK) urban system. This “pre-diagnosis” relies on the limited yet often revealing information available on the North Korean urban system and its patterns of investment. We also can narrow the range of uncertainty about the structure of the North Korean urban system by means of international comparisons. For instance, should we expect the North Korea system of cities to have more in common with the Soviet cities of Russia than with Chinese or Vietnamese cities, both in terms of time paths of development and of institutional arrangements?

The paper contains many interesting facts and data that help us understand just how different centrally planned/socialist cities are when compared with market-based cities.  The paper also spells out some interesting implications for North Korea’s urban residents (the majority of the country’s population) once the transition from a socialist to a market-based infrastructure begins.