Archive for July, 2014

Food imports from China fall in 2014

Wednesday, July 30th, 2014

According to Yonhap:

North Korea’s grain imports from China tumbled more than 50 percent on-year in the first half of this year, data showed Wednesday, amid speculation that relations between the communist allies are not like before.

North Korea imported 58,387 tons of cereal crops from China in the January-June period, down 53 percent from 124,228 tons recorded a year earlier, according to the data by the Korea International Trade Association (KITA).

By type, flour topped the list with 40,142 tons, or 68.8 percent, followed by rice and corn with 13,831 tons and 3,420 tons, respectively, added the Seoul-based agency.

Analysts say the remarkable decrease may be attributable to reportedly strained ties between the two sides in recent months.

“Of late, North Korea has appeared to move to reduce its economic dependence on China and diversify its foreign economic partners,” said Lim Eul-chul, professor at the Institute for Far Eastern Studies at Kyungnam University.

Kwon Tae-jin, researcher at private think tank GS&J, said it might have been more affected by Pyongyang’s increased crop yield.

“North Korea’s stockpile of crops seems to have grown due to a good harvest last year.

Meanwhile, China’s fertilizer exports to North Korea also plunged 21.3 percent to 109,531 tons during the January-June period this year from a year earlier, said KITA.

Read the full story here:
N. Korea’s grain imports from China halve in H1
Yonhap
2014-7-30

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Chinese Koreans and cross border trade

Tuesday, July 29th, 2014

According to the Daily NK:

The Hwagyo, North Korea’s community of overseas Chinese, are seeing their value rise in response to demand for assistance transporting cross-border freight for local traders hamstrung by their proscribed freedom of movement, according to a source inside North Korea. The local traders refer to the process as “renting a passport”.

The source in North Pyongan Province reported to Daily NK on July 28th, “Pyongyang Hwagyo are catering to the tastes of middle-class consumers in the city’s markets by taking orders from individuals or by bringing in goods on the behalf of traders.

“The measles outbreak prevented Pyongyang hwagyo in Pyongyang from taking the cross-border train, but recently that ban was lifted so they can come and go from Dandong again.” The measles travel ban was put in place during June in Yongcheon and Sinuiju, but was withdrawn on July 15th.

Hwagyo are treated as citizens in North Korea, carrying the same identification cards as all other residents; however, they are also able to hold Chinese passports, which allows for greater mobility and autonomy than other North Koreans. That is the reason for the high demand; North Korean traders and wholesalers employ them to ensure that their supplies arrive from China.

“Although there are a lot of hwagyo from Sinuiju and elsewhere in Dandong, Pyongyang hwagyo are the ones who get hired the most because the train ends in Pyongyang; This makes it easier to get the goods into circulation, and the procedures there are not as stringent,” the source reported. “This has caused their value to rise.”

“The hwagyo either use their own money to get products to sell in Pyongyang markets directly, or they use money from traders and take 5% of the total upon delivery,” she said. “They take commission for transferring goods from the cross-border trains to merchants in Pyongyang markets.”

“Merchants used to collaborate with train operators coming in from Dandong to bring goods into Sinuiju. However, more are seeking out the hwagyo instead, because it’s cheaper,” the source said.

There is a stipulated limit of 300kg of cargo per person on the train between Dandong and Pyongyang. Excess luggage is possible, but only up to 50kg, and this is charged at 1.50 RMB per kg, according to the source. The ticket for the 5hr 30min ride is 300 RMB, and this must also be factored into the overall freight transit cost.

The train departs at 10:00 daily. Once it arrives in Pyongyang at around 15:30, passengers and freight are subjected to customs procedures, followed by immigration inspections. “Not a single person can leave the train until everyone goes through immigration and officers check their passports and travel visas,” the source recalled.

“Because the staff in Sinuiji Customs House are tough about inspections and are sure to take at least one thing, it’s safer and cheaper to transport goods via the cross-border train,” the source said, concluding, “How funny it is that this place prevents North Korean citizens from moving around freely and ends up making hwagyo richer.”

Read the full story here:
Hwagyo Step in to Dominate Border Trade
Daily NK
Seol Song Ah
2014-07-29

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Eugene Bell offers TB assistance to the DPRK

Monday, July 28th, 2014

According to Yonhap:

The Eugene Bell Foundation, which provides medical assistance to the impoverished North, will send 770 million won (US$750,000) worth of TB medication to the communist country, ministry officials said.

In February, the foundation shipped 720 million won worth of TB drugs to the North in an attempt to tackle the growing issue of multidrug-resistant TB in the country.

So far this year, the South has approved 11 shipments of civilian aid worth a combined 2.82 billion won to North Korea.

The latest approval comes after Seoul announced on July 15 that it will provide Pyongyang with humanitarian aid worth 3 billion won through civilian organizations.

It marks Seoul’s first state-funded aid to North Korea since the North torpedoed the South Korean warship Cheonan in the Yellow Sea in 2010, killing 46 sailors. Following the incident, Seoul imposed a blanket ban on cross-border economic and other exchanges.

Read the full story here:
Gov’t OKs civilian medical aid to N. Korea
Yonhap
2014-7-28

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DPRK increases exports of rare earths to China

Sunday, July 27th, 2014

According to the Korea Times:

North Korea has increased its rare earth exports to China amid worries within the international community that its mineral exports could weaken the effect of sanctions imposed on the reclusive state.

The cash-strapped communist country exported goods to the value of $550,000 and $1.33 million in May and June, respectively, according to the Korea International Trade Association (KITA).

Last January, the North exported elements worth nearly $25,000 to China for the first time and continued them this year. The country has an estimated 20 million tons of rare earth elements.

The North’s resources exploitation have stirred speculation that the impoverished state may further diversify mineral exports to China, where it has previously mostly exported anthracitic and iron ore.

The KITA report identified the changing trend in North Korea’s earnings from mineral exports.

In the first half of this year, earnings from anthracitic and iron ore exports decreased 23 percent and 5 percent, respectively.

These earning deficits were compensated for by exports of rare earth elements. There has been a sharp increase in global demand over the last recent decade because several high-tech devices, including smartphones, and other high technology devices use them in core components. Rare earth elements are a group of 17 elements on the periodic table referred to by the US Department of Energy as “technology metals” because of their use and application.

The communist country relies heavily on mineral exports as a major source of hard currency after international sanctions were imposed on the Pyongyang regime for its continuing missile launches and testing of nuclear weapons.

Natural resources account for 73 percent of North Korea’s bilateral trade with China in 2012. The North exports 11 million tons of anthracitic to China annually.

Yonhap coverage:

North Korea exported rare-earth elements worth $1.87 million to China from May to June, resuming outbound shipments of the crucial industrial minerals to its key ally and economic benefactor in 15 months, data showed Sunday.

North Korea shipped rare-earth minerals worth $550,000 and $1.32 million to China in May and June, respectively, which amounted to a total of 62,662 kilograms, according to the Korea International Trade Association based in Seoul.

The communist regime first exported rare-earth metals worth $24,700 to China in January 2013 and had stopped selling them until recently.

Separately, Pyongyang has sold carbonate-containing rare-earth compounds to China since 2011, but the size of outbound shipments is small, with the total amount is estimated at about $170,000 over a period of three and a half years.

The impoverished nation is known to have large reserves of rare-earth minerals, which are crucial ingredients used in many tech products as well as the military and medical sectors.

The latest move comes as the North has stepped up developing rare-earth deposits to support its moribund economy.

Last year, the North’s state-owned Korea Natural Resources Trading Corporation signed a 25-year deal with British Islands-based private equity firm SRE Minerals Limited to mine deposits in Jongju, northwest of the capital, Pyongyang.

Experts said the recent surge in North Korea’s rare-earth shipments may be part of its attempts to diversify sources of mineral exports, which account about half of its total exports.

The North’s export of anthracite coal fell 23 percent in the first half of this year to $571.2 million from a year ago, while ironstone declined 5 percent to $120 million in the cited period, according to trade data.

“The rare-earth minerals sold to China were valued at $30 per kilogram, and they were considered to be processed iron concentrates or oxidized substances,” said Choi Kyung-soo, chief of the Seoul-based North Korea Resource Institute. “It could be seen as an attempt to diversify items of mineral resource exports, but it remains to be seen whether the North will start exporting large volumes of rare-earth minerals.”

Read the full stories here:
Rare earth elements boost NK income
Korea Times
Kang Hyun-kyung
2014-7-27

N. Korea exports US$1.8 mln worth of rare earth to China in May-June
Yonhap
2014-7-27

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AmeriCares sends aid to the DPRK

Friday, July 25th, 2014

According to Yonhap:

A U.S. humanitarian group has sent US$800,000 worth of medical aid to North Korea as part of its continued effort to help the impoverished communist nation, a news report said Friday.

AmeriCares, a nonprofit organization based in Connecticut, shipped a package of medicine, sanitary goods and other medical aid in June, the Voice of America (VOA) reported.

The shipment will arrive at the end of this month, the aid group’s communication director, Donna Porstner, told the VOA.

The supplies will be distributed to six hospitals and clinics in Pyongyang, Pyongan Province, and North Hwanghae Province, it added.

AmeriCares said it delivered $1.8 million in medical assistance to North Korea earlier this year.

“Despite the challenging political context, AmeriCares — in its mission to help people in need irrespective of their race, creed or political persuasion — is committed to helping the people of North Korea, who have suffered from acute food shortages, natural disasters and isolation,” it said on its website, www.americares.org.

“A limited number of economic, political and social ties often means that the country faces shortages of key medical supplies,” it added.

Read the full story here:
U.S. NGO ships US$800,000 worth of medical aid to N. Korea
Yonhap
2014-7-25

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Foreign tourism in DPRK Increases by 20% in first half of 2014

Friday, July 25th, 2014

Institute for Far Eastern Studies (IFES)
2014-7-25

The number of foreign tourists visiting North Korea in the first half of 2014 has increased by 20 percent compared to the previous year. The Choson Sinbo, a news outlet affiliated with the pro-North Korean General Association of Korean Residents in Japan, reported the following on July 15: “The amount of foreigners looking to visit Choson (North Korea) is continuing to increase. . . . [and] according to Choson International Travel Agency President Ham Jin, the number of foreign tourists has increased by 20 percent over the previous year in just the first six months of 2014.” The Choson Sinbo, however, did not release detailed information of the total number of visitors.

The article mentions tour-package diversity as the secret to the recent increase in foreign visitors, saying, “Since the beginning of the year, the recently opened Masikryong Ski Resort has been well received by skiing and hiking enthusiasts.” It also mentions that “Military enthusiasts are also showing interest in the Korean People’s Army Exhibition of Arms and Equipment, the Jonsung Revolutionary Museum, and other military-related locations.”

The Choson Sinbo also mentioned the recent surge in popularity for railroad enthusiasts to visit Pyongyang and experience the subways and railroads. Furthermore, president Ham Jin was also quoted as saying, “In the future, tourism packages will be created to cater to surfing enthusiasts and badminton enthusiasts.”

North Korea has decided to cancel this year’s “Arirang” mass games, a large-scale performance which previously accounted for a hefty share of the nation’s tourism revenue. Instead, the country will focus on the development of new tourist attractions. The DPRK has already established a travel agency that will oversee the visitation of the world’s Taekwondo athletes, and is promoting “tent tourism” in beach areas to attract Chinese tourists to various beaches in Rason city.

On July 14, 2014, the Korean Central News Agency (KCNA) introduced camping areas, touting the move as a “novel idea at the height of its popularity,” saying, “many tourists are enjoying swimming, taking walks, and fishing as they spend their afternoons and evenings in tents along the long sandy beaches in Rason.”

Rason, which has been designated as a special economic zone (SEZ), is renowned for its beautiful beaches in Chujin and Pipha Island and other locations frequently visited by Chinese tourists in the summer.

According to the KCNA, “Rason International Travel Agency has collaborated with Yanbian Spring International Travel Agency of Jilin Province in China to open a two-night, three-day camping event which took place from July 12th to the 14th.” At the event, it was said that Chinese tourists visited downtown Rason City during the day, and returned to the beach in the evening to pitch their tents, swim and enjoy freshly grilled squid and mussels.

Along with the opening of the “Rason-Yanji Angling Tourists’ Festival” on June 28, 2014, North Korea has been focusing on the Rason area, churning out a slew of new activities easily accessible to Chinese tourists.

Here is coverage in Yonhap:

“The number of foreigners visiting the Democratic People’s Republic of Korea (DPRK) is continuing to increase,” said the Chosun Shinbo. It quoted Ham Jin, head of the (North) Korea International Travel Agency, as saying the figure jumped 20 percent on-year during the January-June period.

But the newspaper did not reveal how many foreign tourists visited the reclusive country during the six-month period.

The newspaper said the country’s new ski resort in Masikryong has grown popular among foreigners, along with mountaineering courses and military-related tourist spots.

The lavish resort, opened in January this year, is one of the pet projects of North Korean leader Kim Jong-un who reportedly enjoyed skiing while attending school in Switzerland in the early 1990s.

Read the full story here:
Number of foreign tourists to N. Korea jumps 20 pct in H1
Yonhap
2014-7-15

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DPRK announces six more economic development zones

Wednesday, July 23rd, 2014

According to KCNA:

Economic Development Zones to Be Set up in Provinces of DPRK

Pyongyang, July 23, 2014 17:50 KST (KCNA) — It was decided in the DPRK to establish economic development zones in some areas of Pyongyang, South Hwanghae Province, Nampho City, South and North Phyongan provinces.

Unjong cutting-edge technological development zone will be set up in some areas of Wisong-dong, Kwahak 1-dong and Kwahak 2-dong, Paesan-dong and Ulmil-dong in Unjong District, Pyongyang.

Kangryong international green model zone will be set up in some areas of Kangryong township in Kangryong County, South Hwanghae Province.

Jindo export processing zone will appear in some areas of Jindo-dong and Hwado-ri, Waudo District, Nampho City.

Chongnam industrial development zone will be set up in some areas of Ryongbuk-ri, Chongnam District, South Phyongan Province. Sukchon agricultural development zone will appear in some areas of Unjong-ri, Sukchon County and Chongsu tourist development zone in some areas of Chongsong Workers’ District and Pangsan-ri, Sakju County, North Phyongan Province.

The sovereignty of the DPRK would be exercised in the economic development zones in provinces.

The relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Wednesday.

By my count, this brings the total number of special economic zones and economic development zones to 25. Little visible progress has been made on the zones announced in 2013, though things seem to be happening in Pyongyang. Also, South Phyongan Province now has Economic Development Zones. It had been omitted from previous lists.

Yonhap also reports:

Jin Qiangyi, a professor of Korean studies at Yanbian University, told the state-run China Daily that the move by North Korea is apparently aimed at breathing new life into its moribund economy.

“Many Chinese companies still feel daunted by doing business in the country because there is no clear policy to guarantee investors’ interests,” the newspaper quoted Jin as saying.

However, another Chinese expert, Li Tianguo, a researcher at the National Institute of International Strategy at the Chinese Academy of Social Sciences, was less pessimistic.

Li told the newspaper that the new zones will “have great attraction to Chinese enterprise and bring good opportunities, in particular for businesses with border trade and processing production.”

China’s direct investment into North Korea jumped to US$109.46 million in 2012 from $5.86 million in 2009, the newspaper reported, citing what it called a “2012 Statistical Bulletin of China’s Outward Foreign Direct Investment.”

Here is analysis by the Institute for Far Eastern Studies (IFES):

North Korea Declares Six Additional Economic Development Zones

On July 23, 2014, the (North) Korean Central News Agency (KCNA) announced the designation of six additional economic development zones (EDZs) throughout various provinces in North Korea. The announcement, which states, “It was decided in the DPRK to establish economic development zones in some areas of Pyongyang, South Hwanghae Province, Nampo City, South and North Pyongan Provinces,” and that this decree was promulgated by the Presidium of the Supreme People’s Assembly (SPA).

It was announced that North Korea will push forward with the Unjong Cutting-Edge Technological Development Zone in the areas of Wisong, Kwahak 1 and 2, Paesan and Ulmil, located in the Unjong District of Pyongyang. Furthermore, it appears that the Kangryong International Green Model Zone will be established in Kangryong County in South Hwanghae Province. According to the investment propositions revealed in November 2013, the “International Green Model Zone” will focus on the development of organic farming and greenhouse technology, wind and water power technology, and the development of services such as golf courses and hotels.

The Chongnam Industrial Development Zone will be set up in Chongnam District in South Pyongan Province, Sukchon Agricultural Development Zone will be established in various areas in Unjong in Sukchon County, and the Chongsu Tourist Development Zone will cover the areas of the Chongsong Workers’ District and Pangsan, Sakju County in North Pyongan Province. It has also been reported that North Korea will push forward with the Jindo Export Processing Zone in Jindo and Hwado, located in the Waudo District of Nampo City. Following the announcement of thirteen new economic development zones in November last year, including the Amrok (Yalu) River EDZ, Sinpyeong Tourism Development Zone, the Manpo EDZ and Wiwon Industrial Development Zone, the newly announced six additional zones brings the total number of economic development zones in North Korea to nineteen.

It was also reported by the KCNA on the same day that the Sinuiju Special Economic Zone in Sinuiju, North Pyongan Province, will be renamed to the Sinuiju International Economic Zone. Through this renaming, it can be assumed that North Korea is intending to reinitiate development in the stagnating zone, which has been in the development process since first being designated as a special economic zone in 2002.

On the other hand, the Wonsan Kalma Peninsula in North Korea’s Kangwondo Province, renowned for its beautiful scenery, has been garnering attention due to a recent push for the construction of large-scale accommodation, recreation and industrial facilities. Over 1,400 ha plot of land along the Kalma Peninsula is expected to be divided up into several areas, including hotels and accommodations, conference and exhibit fairgrounds, an athletics stadium, economic development area, and a commerce service area.

In order to respond to the increase in tourists visiting the Wonsan area, North Korea is preparing to increase the area’s hotel and lodging capacity by ten times, maxing out at a total capacity of eleven thousand people. Furthermore, plans have been drawn up calling for the construction of a passenger wharf which can transport up to twenty-five thousand people per day to the waterfront. The beach area will also be developed, allowing for up to ten thousand beachgoers at one time.

In the Dunam Mountain area of Kalma Peninsula, theaters, golf courses, an underwater hotel, and tourist accommodations will be built together with industrial complexes for science, industry and agricultural research and development. It is also predicted that North Korea will also develop several of the small islands off the coast of the Kalma Peninsula into tourist attractions.

I have all of the economic Development Zones mapped out on Google Earth.

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Sinuiju SEZ renamed

Wednesday, July 23rd, 2014

Sinuiju-SEZ-2014-2

Pictured Above (Google Earth): The approximate borders of the Sinuiju Special Economic Zone.

According to KCNA:

Special Economic Zone in Sinuiju City to Turn into Sinuiju Int’l Economic Zone

Pyongyang, July 23, 2014 17:40 KST (KCNA) — The DPRK decided to rename the Special Economic Zone in some parts of Sinuiju City, North Phyongan Province, Sinuiju International Economic Zone.

The sovereignty of the DPRK will be exercised in the Sinuiju International Economic Zone.

The relevant decree of the Presidium of the Supreme People’s Assembly was promulgated on Wednesday.

Previous posts on the Sinuiju SEZ here and here.

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On the availability of Chinese and North Korean rice

Tuesday, July 22nd, 2014

According to the Daily NK:

As volumes of rice bought and sold in North Korea continue to rise, stores operated by foreign-currency earning entities and market vendors are entering into greater competition for customers, inside sources in North Korea report.

“Goods including rice, beans and flour are flowing in steadily from China,” a source from North Pyongan Province explained. “In the olden days the arrival of July would have meant the worst conditions for rice, but this year there have been no big shifts and prices have stayed stable.”

A second source in North Hamkyung Province corroborated the state of affairs, saying,  “Every day a number of freight trucks loaded with rice come in through the customs house at Hyesan, and there’s the smuggled stuff, too.”

“It used to be the norm for rice to retail in the jangmadang [market]Stores only traded it wholesale,” the North Pyongan Province source went on. “But now stores are retailing it, too. Any time rice comes in through customs, buyers are there lining up to take it.”

“Stores” run under the auspices of foreign-currency earning entities began to spring up Pyongyang and other major cities toward the end of 2006. They were given formal permission to sell rice and corn alongside manufactured goods, thus in effect ending the state’s official dominance of domestic grain circulation.

The rice sold in markets comes from two sources: China, and domestic farms.  Stores mostly sell rice originating in China, whereas market vendors tend to purvey rice from a variety of sources, sources say. The ratio of Chinese to North Korean rice sold in public markets is roughly 6:4.

Lower socio-economic groups and restaurants catering to the general public tend toward Chinese rice, which is plentiful and cheap but considered insufficiently glutinous. On the other hand, affluent groups are the main purchasers of rice grown in North Korea. The stickiness of the product is higher, but so is the price: roughly 500 KPW more per kilo than Chinese varieties.

“First to attract customers, and then to turn them into regular visitors, both shops and markets are competing on price and service,” one source explained. “The stores sell their rice for 100 or 200 KPW less than the jangmadang, but customers there cannot negotiate, and the seller never throws anything in for free.”

However, this appears to be changing. According to the source, stores have now begun to grant greater price autonomy to shop officials, allowing for haggling over price and other forms of value-added.

“Customers can negotiate prices and get home or business delivery if they purchase more than 100kg,” one source reported. “It’s just like in the market now. Shops have started providing extra services, and delivery men, eager as they are to earn money, have started crowding outside storefronts waiting for customers where once they would have waited on the road.”

Read the full story here:
Price War as Stores Take on Nimble Vendors
Daily NK
Seol Song Ah
2014-7-22

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Cabinet meeting on economic policy held

Tuesday, July 22nd, 2014

According to Yonhap:

North Korea recently held a top Cabinet meeting to assess its economic policy in the first half of 2014 and discuss a strategy in the coming quarter, according to a news report.

Premier Pak Pong-ju attended the extended Cabinet plenary session, according to the July 13 edition of the Minju Josun obtained by Yonhap News Agency on Tuesday. It did not specify when it was held.

Cabinet members raised the need to minimize flood damage this summer as a top priority and also stressed the importance of enhancing electricity production, said the North Korean government newspaper.

They also called for a concerted effort to develop the metalworking industry and the chemical sector, which the communist nation views as two pillars of its economic growth drive, it added.

In the first half of 2014, the North exceeded its target in several economic sectors, said the newspaper.

Salt production increased by 39,800 tons from last year’s total and fish catches jumped by 17,000 tons, it said.

Read the full story here:
NK officials discuss economic policy in key Cabinet meeting
Yonhap
2014-7-22

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