Yonhap
5/1/2006
China’s second-largest carrier China Southern Airlines Co. began a three-times-weekly flight service between Beijing and Pyongyang, Xinhua News Agency reported Monday.
The airline’s first airplane left Beijing at 1:05 p.m. (local time) and arrived in Pyongyang, the North’s capital, at 2:35 p.m., the report said.
According to the Nautilus Institute’s web site [Link broken since posing]:
“Under the direction of central authorities, foreign currency management groups are rapidly being moved into Sinuiju, while ordinary residents are being relocated to other regions only to be replaced by residents of Pyongyang and other areas who are in the process of moving in.”
The Sinuiju Special Administrative Region (SAR) project lost momentum in September 2002 when its first governor-to-be, Chinese-born Dutch businessman Yang Bin, was arrested in China. North Korean leader Kim Jong Il’s visit to China at the beginning of this year, however, appears to have triggered a turnaround. With Kim’s China trip focused on the revision of economic policies, the rejuvenation of Sinuiju SAR development plans came into the spotlight.
Most South Korean press have run pieces, based on the stories of North Korean defectors and Chinese residents in Dandoong and other border areas, alluding to the fact that there is change in the air around Sinuiju. A North Korean businessman in Dandoong was quoted as saying, “No official word has come down from central [authorities], but they are busy preparing the Sinuiju SAR,” while rumors are spreading among area residents that “Sinuiju is the next Hong Kong.”
The most reluctant promoters are the People’s Committee and regional administrative organs. As orders come down, some administrators are required to immediately pack and relocate to southern Sinuiju, an underdeveloped area not even comparable to Sinuiju proper. Authorities had chosen the site as far back as 1986, and while development was fully promoted, only factories were built up. Housing, roads, and other indirect social capital facilities are still lacking. While regional authorities may have decided to build up southern Sinuiju, it will take another ten years of hard work to do so.
On the other hand, the outlook for city authorities is considerably brighter. This is because in the future, they will have the opportunity to rise up though organizations run by special administrative businesses. Up until now, instructions have come through the Regional People’s Committee, security bureau and defense authorities, but even though they own the facilities, they can still receive orders directly from the central government. Because of this, regional officials are still influenced by the temperament of local and central party politics while being faced with increasing pressure from city authorities to transfer power to them. While some factories — like the Sinuiju Cosmetics Factory, Sinuiju Shoe Factory, Sinuiju Synthetic Fiber Plant, and other large factories — are preparing for foreign capital support and cooperative ventures, most administrators appear to be pushing for keeping the status quo.
There are still many concerns. As the SAR is being set up, central officials are being dispatched to fill roles as factory officials; central officials without any personal interest. A similar sort of dispatch of central officials took place in the Rajin-Sonbong Special Economic Zone in the past.
Most small- and medium-sized enterprises and regional factories are beginning to transform into trading companies. There are currently around one hundred fifty such trading offices in Sinuiju. In the future, if Sinuiju is officially designated as a SAR, it appears that a great many more trade offices will appear.
Other news from Sinuiju insiders is that the People’s Committee, People’s Security Force, National Security and Defense Bureau and other central government departments that have received Kim Jong Il’s permission to trade have already opened offices in Sinuiju, employing people in the area and busily seeking out people with connections in China in order to find trading partners.
It appears by looking at the relocation currently underway that the goal is to move residents within the same timeframe that was required for the first round of relocations in 2002, when residents were moved to Chunma, Kwaksan, Dongrim and other areas around the outskirts of Sinuiju. There are problems here as well, as the government wants to relocate residents from Pyongyang and other regions to Sinuiju. At issue is the fact that while the number of residents who can move in needs to equal the number relocated out of the area, some North Koreans have already used connections with the central and regional party affiliates in order to move to the region.
In addition, the housing market is active, with housing prices in central downtown areas having already skyrocketed. While officially owned by the state, dwellings are unofficially “sold” through the use of “modification fees”: apartments run from 25 to 30 million won (8 to 10 thousand USD), while two-three story condominiums in “Chinatown” in the Namsang district run in the tens of thousands of dollars.
However, complications have arisen. Many residents being moved out have decided to get rid of their houses, but this has proved more difficult than expected. Some have put up their house for sale but have been unable to find a buyer. There are also those who were caught in the midst of sales through “real estate offices” when a crackdown by authorities resulted in their expulsion. A source stated that the administrative authority of the city security bureau in charge of relocating residents is undermanned and takes different measures to direct different groups of residents, while pressing for the expulsion of what it deems as “lesser” or unemployed people.
Economic Reform and SEZ as Survival Strategy of DPRK
PDF: Deok Ryong Yoon.pdf
Deok Ryong Yoon
Introduction to & implications of Gaesong Industrial Complex Project
PDF: kaesong.faqs.pdf
Ministry of Unification
Gaeseong Industrial complex: Past, Present and Future
PDF: Dong-geun Kim.pdf
Speech by Dong-geun Kim, Chairman of Gaeseong Industrial District Management Committee
Gaeseong Industrial Complex : Frequently Asked Questions (FAQs)
PDF: kaesong.faqs1.pdf
Ministry of Unification, ROK
From the Daily NK:
Computer Prices (Mar 14, 2006):
-17inch Pentium Ⅲ is US$110~120 retail ($90 wholesale price)
-A printer is US$65~70
-10 Floppy discs are 5,000W
-A keyboard is US$20
-A mouse is US$5
Snack prices (March 28, 2006)
-roast chicken is 6,500-8,000W
-roast duck is 9,000~12,000W
-750g of noodles are 2,400W
-box of Korean noodles is 6,750W
-1kg of potatoes is 400W
-1kg of Beans is 700W
-1kg of wheat flour is 750W (690W at wholesale price)
-400g of Milk is 5,000W
-1kg of Butter powder is 5,000W
-25g of Baking powder is 400W
-1kg of Chinese noodles of 2,000W
-1kg of dried cuttlefish is 8,800W.
Entertainment Costs (March 28, 2006)
-movie admission fee is 50W
-comic book is 1,500W, to borrow 100W
-Swimming pool is 70W
-bath admission fee is 2,500W
-5,000W ($1.67) /huor to use a Karaoke singing room
-1,000W ($0.33) /hour to use a computer in an internet café
Other Prices
–sanitary napkin is 500W, 600w, and 1,000w
-Skin lotions of three kinds are 42,000w
-Aloe cosmetics of three kinds are 42,000w
-A set of cosmetics (a skin cream and a skin lotion) is 10,000w (made in South Korea), 3,500w (made in China)
-Small gas cooking stove is 27,000w (made in South Korea / 25,000w in a wholesale price
-An electric bicycle is 150-200w.
North Korean inflation has increased following consecutively excessive issues of the 500W, 1,000W, and 5,000W notes.
Cities that can provide North Koreans with leisure facilities to enjoy are only Pyongyang, Shinuiju, Chongin, Hamhung, and Rasun. These cities possess big theaters, amusement parks, and swimming pools. Especially Shinuiju, which is close to China, has been introduced with foreign cultures and commodities very quickly. Shinuiju residents are also in the highest economic class of the North Koreans. Thus, Shinuiju has internet cafes, singing rooms, saunas, massage rooms, and comic bookstores.
The investigation was carried out by traders visiting Shinuiju in March and attaining the price levels concerned and then DailyNK gathered the information and cross-examined it.
Also, another trader emphasized that, “The official wage of North Korean workers is about 3,000 won. At the same time, the price for using a singing room per hour is 5,000 won. It shows how badly North Korea has been transformed,” adding that, “Shinuiju is the city where traders doing business with big money from North Korea and China gather. Such singing rooms, PC rooms, and saunas are just for them.”
Items marked by dollars in the price index below are usually paid in dollars, not North Korean won. A Chinese businessman who participated in the price investigation informed us that, “Currently in North Korea, the dollar is used frequently enough to be called ‘common currency’ and has more exchange value,” adding, “As trading costly articles, their paying in dollars makes them win credits.” He also said that, “That the dollar is exchanged into North Korea won is welcomed, yet to exchange the won into dollars is often impossible, even double the value.”
Now, in the early of April, the exchange rate of the dollar in North Korean black markets is roughly 3,000 won against the dollar.
From the Daily NK:
The deputy director of Yanbian Korean Autonomous Prefecture in Jilin Province recently said he plans to “establish permanent trade relation with North Korea and pursue multinational tourism projects which connects China-North Korea-Russia through Tumen River Area Development Project”. He also said, “the government of Yanbian Korean Autonomous Prefecture will more actively pursue cooperation with North Korea during the 11th Five-Year Plan(2006~2010)”.
The Korean Autonomous Prefecture decided to establish 2 level highway between Rajin, North Korea and Yuanzheng maritime customs, Hunchun, China and to reconstruct the tailway between Rajin and Onsung in North Hamkyung Province.
Lee Yong Nam at Department of Trade in North Korea said, “economic trade between North Korea-China is improving with the attention of leaders in each country. Intimate economic cooperation will be maintained by all means possible”.
China gained exclusive right to use and develop Rajin port in North Korea, as compensation for establishment of high way in Wonjung-Rajin in North Hamkyung Province. China was excused from all the custom formalities of labor and equipments related to the establishment and development of highway and port, from which they saved 4 million Yuan per year.
Through the trading zone between North Korea-China in Tumen River area, China plans to export food, fertilizers, electronics, textile, plastic goods, cigarrete, mechanical devices. Yanbian Korean Autonomous Prefecture had 11 million 430 thousand dollars trade surplus from trade with North Korea in the first half of last year. A government official at the local government said, “trade surplus will increase drastically when the trading zone between North Korea- China is established” with excitement.
This story from the Daily NK has an update on whats happening at Raijin as well as a history of the area:
In December 1991, Rajin and Seunbong cities were declared “Free Trade Economic Regions”, Rajin Port was planned to be expanded according to a 3-stage development scheme. The first stage consisted of infrastructure construction such as railroads, roads, and ports. In the ten years since, the budgetary outlays have been insufficient.
In 1996, the Committee for Promoting NK Foreign Economic Cooperation published a report, “Reality and Outlook for Rajin- Sunbong Free Trade Economic Regions.” According to the report, the Rajin Port should first build capacity for large-sized containers. In stage two, its loading-handling capacity should be improved from 300 million tons to 1,700 million tons. The third stage, beginning in 2010, the port should have the capacity to manage 100 million tons.
I have visited the DPRK twice, and in that time, I purchased every different brand of cigarette I saw. So I have 9 different brands (not including menthols). So it came a a shock to me when I read in the Daly NK about another brand I had never heard of…and it was the most popular!?!?
“Craven A” Cigarettes! (a.k.a. cat cigarettes)
China has reached an agreement with North Korea to let the private sector, rather than the government, take the initiative in providing economic aid to Pyongyang and to respect market principles, sources familiar with China-North Korea relations said Saturday. According to the sources, the market-based approach is contained in a cooperation agreement in economy and technology signed by the two countries when Chinese President Hu Jintao visited North Korea in late October.
One of the objectives of North Korean leader Kim Jong Il’s visit to China in January was to confirm this approach, the sources said.
The sources also said a cooperation agreement in economy and technology signed by a Chinese delegation led by Vice Premier Wu Yi during their visit to North Korea in early October is separate from the agreement with the same name signed during Hu’s visit later that month.
The earlier agreement calls on China to continue providing materials and technological cooperation for the Da’an Friendship Glass Factory near Pyongyang. It also allows North Korea to export glass products made at the factory.
A Macau bank accused by the US of laundering money for North Korea has agreed to dissolve all links with the communist state.
The US Treasury said Banco Delta Asia had acted as a “willing pawn” for North Korea to channel money through Macau.
Macau’s authorities took control of the bank last year after the fraud claims led to a run on its deposits. Customers withdrew 10% of total deposits after the allegations surfaced.
Officials said the bank would end ties with North Korean clients and tighten its anti-money laundering procedures.
2/14/06
SEOUL – North Korea’s economy would have posted minus growth if it had not been for its rapidly growing trade with China, the South Korean central bank’s research unit said Monday.
North Korea-China trade has been rising by an average 30% every year since 2000, boosting the communist state’s economic growth by 3.5% every year, according to the Institute for Monetary and Economic Research.
As of 2004, the bilateral trade accounted for 39% of the North’s total trading volume, and also made up 77% of annual increase in the North’s trade volume, the institute said. North Korea’s economic growth could have dipped below zero if it were not for such a sharp increase in its trade with China, the institute said. Such a sharp increase in bilateral trade is the result of North Korea’s low production capacity and cheap prices of Chinese goods, it said.
Geographical proximity also boosted the trade. The fast growth of the Chinese economy will result in increased trade with North Korea and induce more market elements in the Stalinist state in the coming years, the institute predicted.
As a result, the inclusion of China in South Korea’s economic cooperation with the North will be one of the options that the government could consider in its policy, it added.
