Construction « North Korean Economy Watch

Archive for the ‘Construction’ Category

DPRK preparing for jump in construction demand

Friday, August 14th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-8-13-1
2009-08-13

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.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Construction, Light Industry, Manufacturing | Comments Closed

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.

Introduction:

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.

Posted in Construction, Economic reform, Price liberalization, Private property, Real estate, Urban Economics | 3 Comments »

Bank of Korea releases 2008 DPRK economic stats

Sunday, June 28th, 2009

North Korea doesn’t release official economic data. Since 1991, the South Korean central bank has released its own estimates of the North Korean economy to fill the void. Its figures are derived from information provided by the ROK’s National Intelligence Service and other sources. The 2008 statistics can be downloaded here.

According to coverage by the Associated Press:

The North’s gross domestic product for last year was estimated at $24.7 billion, a 3.7% increase from 2007, Seoul’s Bank of Korea said in a news release. The impoverished North’s economy shrank 2.3% in 2007 and 1.1% in 2006.

The central bank said the North’s economic growth was mainly because of “temporary factors” such as favorable weather conditions that resulted in an increase in agricultural production, and the arrival of oil shipments under an international disarmament deal on its nuclear program.

The size of North Korea’s economy, however, was still about 2.6% of South Korea’s, the bank said, adding it was “difficult” to determine whether last year’s growth means the country’s internal economic conditions have improved.

The bank said the North’s agricultural production increased 10.9% last year compared with 2007. The production of coal, iron ore and other minerals expanded 2.3% and the manufacturing industry 2.5%.

…and BBC coverage:

Agricultural production rose nearly 11% in 2008 compared with 2007. And coal, iron ore and other mineral production grew 2.3% for the year.

UPDATE from Business Week:

The surprise underscores the tiny size of the North Korean economy, which could be easily swayed by such factors as weather and outside assistance. Just over two-thirds of the 3.7% growth came from the agricultural sector, and that is heavily dictated by weather. North Korea’s agricultural output increased by 10.9% in 2008 after falling by 12.1% in the previous year as it managed to escape from major floods and drought. Its 2008 manufacturing production also grew by 2.5%, compared with a gain of a mere 0.8% in 2007, thanks to heavy oil supplies by the U.S. and its allies as a result of Pyongyang’s agreement last year to begin dismantling its nuclear facilities.

Even as hope builds in South Korea about a recovery, with the U.S. and China showing signs of revival, prospects for North Korea’s economy are looking grimmer. North Korea’s nuclear test in May and the regime’s missile tests this year have led to an end to outside help and economic sanctions by the U.N. This heralds a poor performance in the manufacturing sector, which will almost certainly face an acute shortage of oil and electricity this year.

Pyongyang can’t count on the agricultural industry for any major contribution to economic growth in 2009, either. Even if North Korea manages to maintain the 2008 grain output of 4.3 million tons, which will be difficult to achieve unless last year’s exceptionally good weather is repeated, it won’t help the economy grow as it starts from a high base.

Those factors make North Korea’s economic growth last year an anomaly. “There’s no indication that North Korea’s growth engine has improved in any fundamental way,” says Bank of Korea economist Shin Seung Cheol. Even with last year’s extraordinary growth, North Korea’s gross domestic product was 1/38 of South Korea’s $935 billion and its trade volume was 1/224 of the South’s $857.3 billion in 2008. As long as North Korea’s reclusive leader Kim Jong Il refuses to open up his country, the gap is bound to keep expanding.

I have collected the most commonly referenced North Korean economic statistics here.

Read more here:
South Korea’s Central Bank Says North’s Economy Grew in 2008
Associated Press
6/28/2009

North Korea’s GDP Growth Better Than South Korea’s
Business Week
Moon Ihlwan
6/30/2009

Posted in Agriculture, Agriculture statistics, Construction, Demographics, Electricity, Energy, Forestry, GDP statistics, Light Industry, Manufacturing, Mining/Minerals, Statistics, Trade Statistics | 1 Comment »

North Korea on Google Earth v.18

Thursday, June 25th, 2009

North Korea Uncovered version 18 is available. This Google Earth overlay maps North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks.

This project has now been downloaded over 140,000 times since launching in April 2007 and received much media attention last month following a Wall Street Journal article highlighting the work.

Note: Kimchaek City is now in high resolution for the first time. Information on this city is pretty scarce. Contributions welcome.

Additions to this version include: New image overlays in Nampo (infrastructure update), Haeju (infrastructure update, apricot trees), Kanggye (infrastructure update, wood processing factory), Kimchaek (infrastructure update). Also, river dredges (h/t Christopher Del Riesgo), the Handure Plain, Musudan update, Nuclear Test Site revamp (h/t Ogle Earth), The International School of Berne (Kim Jong un school), Ongjin Shallow Sea Farms, Monument to “Horizon of the Handure Plain”, Unhung Youth Power Station, Hwangnyong Fortress Wall, Kim Ung so House, Tomb of Kim Ung so, Chungnyol Shrine, Onchon Public Library, Onchon Public bathhouse, Anbyon Youth Power Stations.

Posted in Agriculture, Alcohol, Architecture, Art, Automobiles, Aviation, Banking, Coal, Communications, Construction, Dams/hydro, Education, Electricity, Energy, Environmental protection, Film, Football (soccer), Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Golf, Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Intranet, Kaesong Industrial Complex (KIC), Mass games, Mt. Kumgang Tourist Special Zone, Nuclear, Oil, Pyongyang Metro, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Religion, Restaurants, Sea shipping, Sports, Tourism, Transportation, Wind | 4 Comments »

N. Korea digs tunnels in Myanmar to earn dollars

Friday, June 12th, 2009

Korea Herald and Yale Global
Bertil Linter
6/12/2009

Missiles and weapon technology, counterfeiting money and cigarette smuggling, front companies and restaurants in foreign countries, labor export to the Middle East – North Korea has been very innovative when it comes to raising badly needed foreign exchange for the regime in Pyongyang. But there is a less known trade in service that the North Koreans have offered to its foreign clients: expertise in tunneling. A fascinating new glimpse of this business has now been offered in secret photos from Burma obtained by this correspondent.

The photos, taken between 2003 and 2006, show that while the rest of the world is speculating about the outcome of long-awaited elections in Burma, the ruling military junta has been busy digging in for the long haul – literally. North Korean technicians have helped them construct underground facilities where they can survive any threats from their own people as well as the outside world. It is not known if the tunnels are linked to Burma’s reported efforts to develop nuclear technology – in which the North Koreans allegedly are active as well. (See Burma’s Nuclear Temptation by Bertil Lintner, YaleGlobal, Dec. 3, 2008)

The photographs published here show that an extensive network of underground installations was built near Burma’s new, fortified capital Naypyidaw. In November 2005, the military moved its administration from the old capital Rangoon to an entirely new site that was carved out of the wilderness 460 kilometers north of Rangoon.

Meaning the “Abode of Kings,” Naypyidaw is meant to symbolize the power of the military and its desire to build a new state based on the tradition of Burma’s pre-colonial warrior kings. But underground facilities were apparently deemed necessary to secure the military’s grip on power. Additional tunnels and underground meeting halls have been built near Taunggyi, the capital of Burma’s northeastern Shan State and the home of several of the country’s decades-long insurgencies. Some of the pictures, taken in June 2006, show a group of technicians in civilian dress walking out of a government guesthouse in the Naypyidaw area. Asian diplomats have identified those technicians, with features distinct from the Burmese workers around them, as North Koreans.

This is quite a turn around as Burma severed relations with Pyongyang in 1983 after North Korean agents planted a bomb at Rangoon’s Martyrs Mausoleum killing 18 visiting South Korean officials, including the then-deputy prime minister and three other government ministers.

Secret talks between Burmese and North Korean diplomats began in Bangkok in the early 1990s. The two sides had discovered that despite the hostile act in the previous decade they had a lot in common. Both had come under unprecedented international condemnation, especially by the United States, because of their blatant disregard for the most basic human rights and Pyongyang for its nuclear weapons program. Burma also needed more military hardware to suppress an increasingly rebellious urban population as well as ethnic rebels in the frontier areas. North Korea needed food, rubber and other essentials – and was willing to accept barter deals, which suited the cash-strapped Burmese generals. “They have both drawn their wagons in a circle ready to defend themselves,” a Bangkok-based Western diplomat said. “Burma’s generals admire the North Koreans for standing up to the United States and wish they could do the same.”

After an exchange of secret visits, North Korean armaments began to arrive in Burma. The curious relationship between Burma and North Korea was first disclosed in the Hong Kong-based weekly Far Eastern Economic Review on July 10, 2003. A group of 15-20 North Korean technicians were then seen at a government guesthouse near the old capital Rangoon. The report was met with skepticism, especially because of the 1983 Rangoon bombings. But, when North Korean-made field artillery pieces were seen in Burma in the early 2000s, it became clear that North Korea had found a new ally – several years before diplomatic relations between the two countries were restored in April 2007.

“While based on a 1950s Russian design, these weapons (the field guns) were battle-tested and reliable,” Australian Burma scholar Andrew Selth stated in a 2004 working paper for the Australian National University. “They significantly increased Burma’s long-range artillery capabilities, which were then very weak.” Since then, Burma has also taken delivery of North Korean truck-mounted, multiple rocket launchers and possibly also surface-to-air missiles for its Chinese-supplied naval vessels.

Then came the tunneling experts. Most of Pyongyang’s own defense industries, including its chemical and biological-weapons programs, and many other military as well as government installations are underground. This includes known factories at Ganggye and Sakchu, where thousands of technicians and workers labor in a maze of tunnels dug under mountains. The export of such know-how to Burma was first documented in June 2006, when intelligence agencies intercepted a message from Naypyidaw confirming the arrival of a group of North Korean tunneling experts at the site. Today, three years later, the dates on the photos published today confirm the accuracy of this report. By now, the tunnels and underground installations should be completed, as would those near Taunggyi. This well-hidden complex ensures there is no danger of irate civilians storming government buildings, as they did during the massive pro-democracy uprising in August-September 1988. Sources say that the internationally isolated military junta may also consider these deep bunkers as their last repair in case of air strikes of the kind that the Taliban in Afghanistan or Saddam Hussein regime in Iraq endured.

It is not clear how much, or what, Burma has paid for the assistance provided by the North Korean experts, but it could be food – or gold, which is found in riverbeds in northern Burma. Or some other mineral. Burma, of course, is not the only foreign tunneling venture by North Korea.

In southern Lebanon following the 2006 war, Israel’s Defense Forces and the United Nations found several of the underground complexes, which by then had been abandoned by Hezbollah militants. By coincidence or not, these tunnels and underground rooms – some big enough for meetings to be held there – are strikingly similar to those the South Koreans have unearthed under the Demilitarized Zone that separates South from North Korea. Under small, manhole cover-sized entrances hidden under grass and bushes were steel-lined shafts with ladders leading down to big rooms with electricity, ventilation, bathrooms with showers and drainage systems. Some of the tunnels are 40 meters deep and located only 100 meters from the Israeli border. North Korea’s possible involvement in digging these tunnels is however, difficult to ascertain. According to Israeli investigative journalist Ronen Bergman, a senior officer in the Iranian Revolutionary Guards, who had defected to the West, revealed that, “thanks to the presence of hundreds of Iranian engineers and technicians, and experts from North Korea who were brought in by Iranian diplomats ?¶ Hezbollah succeeded in building a 25-kilometer subterranean strip in South Lebanon.”

Beirut sources suggest that it is more likely that Hezbollah has used North Korean designs and blueprints given to them by their Syrian or Iranian allies – both of whom are close to the North Koreans. (Both Iran and Syria have acquired missile technology from North Korea, and what was believed to be a secret nuclear reactor in Syria built with North Korean help was destroyed by the Israeli air force in September 2007.) Either way, North Korean expertise in tunneling has become a valuable commodity for export. And Pyongyang is flexible about the method of payment as long as it helps the international pariah regime.

Bertil Lintner is a Swedish journalist based in Thailand and the author of several works on Asia, including “Blood Brothers: The Criminal Underworld of Asia” and “Great Leader, Dear Leader: Demystifying North Korea under the Kim Clan.” He can be reached at [email protected] – Ed.

UPDATE: Burmese whistle-blowers sentenced to death
BBC
1/7/10

Two Burmese officials have been sentenced to death for leaking details of secret government visits to North Korea and Russia, the BBC has learned.

The officials were also found guilty of leaking information about military tunnels allegedly built in Burma by North Korea, a source in Burma said.

A third person was jailed for 15 years, the source added.

The military rulers in Burma (Myanmar) have so far made no public comments on the case.

The source told BBC Burmese that Win Naing Kyaw, a former army major, and Thura Kyaw, a clerk at the European desk of Burma’s foreign ministry, had been sentenced to death by a court in Rangoon on Thursday.

They were found guilty of leaking information about government visits to North Korea and Russia, which reportedly took place in 2008 and 2006.

The two men were also convicted of leaking details of a network of tunnels reportedly being built in Burma.

It is thought the tunnels were built to house communications systems, possible weapons factories and troops in the event of an invasion.

The third man, Pyan Sein, was given 15 years in prison on Thursday.

Burma still has capital punishment, but it has not carried out executions in recent years.

Posted in Construction, Military, Myanmar | Comments Closed

North Korea’s construction boom

Thursday, May 21st, 2009

Using Google Earth’s feature which allows users to view the same location at different points in time, we can see that Pyongyang has experienced quite a construction boom in the 21st century, particularly in the southern Rakrang District. Below I have posted some of the more interesting discoveries (dates are in the upper right corner of the images).

Tudan Duck Farm (Pyongyang)

Rakrang District

Tongil Market (Rakrang)

Russian Orthodox Church (Rakrang)

Kaesong Industrial Zone

Sinuiju market growth

Many have speculated that the construction boom is related to the DPRK’s plan to achieve a “strong and prosperous state” (Kangsong Taeguk) by 2012—the 100th birthday of the country’s eternal president, Kim il Sung.

UPDATE: Jon Herskovitz writes in Reuters that all this construction is actually making pepole worse off. According to the article:

The programme to forge a “great and prosperous nation” by 2012 was a central part of the mandate for Kim Jong-il, son of the founding president, when parliament extended his official leadership in March for five years.

The goals for the broken economy are lofty. The North wants to revamp its railways, coal mines, steelworks and electrical supply, end hunger and strengthen its already large military.

“The Korean people will strikingly demonstrate their heroic stamina as socialist workers … and thus fling open the gate to a thriving nation in 2012,” North Korean state media said in a report to mark May Day.

Foreign residents in Pyongyang say streets are being spruced up and buildings refurbished to mark the 100th birthday of Kim Il-sung, who died in 1994 but is still considered president for eternity of Asia’s only communist dynasty.

“The 2012 project fits into these themes: glorification of the past, and if past history is any guide, the wasting of huge sums on useless monumental edifices,” Marcus Noland, an expert on the North’s economy with the U.S.-based Peterson Institute for International Economics, wrote in an email.

“The problem for North Korea will be financing this initiative.”

North Korea’s centrally planned economy has shrunk significantly since the rise to power in 1994 of Kim Jong-il, whose government quickly stepped away from early attempts at economic reform which might have threatened its grip on power.

Money from overseas has been drying up as the prickly North has backed away from an international disarmament-for-aid deal and the impact of U.N. sanctions, tightened after its April 5 test launch of what many saw as a disguised long-range missile.

…

Those likely to bear the brunt of this shift in internal spending will be the most impoverished in the already destitute state, analysts said.

They will be forced to mobilise for government projects, leaving their local and mostly rural economies to stagnate, which means less food in a country that for years has been unable to produce enough grain to feed its 23 million people.

Read the full article here:
North Korea’s prosperity push could raise poverty
Reuters
Jon Herskovitz
5/12/2009

Posted in Construction, General markets (FMR: Farmers Market), Google Earth | 5 Comments »

Kim Jong Il, Urban Planner

Friday, April 24th, 2009

Daily NK
Lee Sung Jin
4/24/2009

Hyesan, Yangkang Province: If it had been any other day, on April 18th the entire city would be buzzing with People’s Unit evaluation meetings and cadre lectures. On this particular day, however, influential officials in Yangkang Province, including Kim Kyung Ho, Chief Secretary of the provincial committee of the Party, were gathered together around the railroad tracks in Sungwoo-dong.

The “Ground-Breaking Ceremony” for a project to clear residences near the railroad, so as to fulfill “Supreme Commander Kim Jong Il’s March 4th Decree,” was being held. However, the expressions on the faces of the officials carrying out the decree were grim. The ceremony ended with a few civilians who had been mobilized for the event demolishing an old farmhouse near the railroad and without the top official present making the planned speech. The faces of the bystander officials as well as the gathered civilians betrayed their distress; removal of houses near the railroad has already started, while new homes for residents, whose houses are to be demolished, are not yet prepared.

All of this started with Kim Jong Il’s onsite inspections at Samjiyeon, also in Yangkang Province, on March 4th. Kim, who entered the county along the road connecting Bukchung in North Hamkyung Province and Hyesan, had some choice words for the homes haphazardly clustered around the railroad.

“Why is it so disorderly around here? Get rid of all of the houses surrounding the railroad within the year!”

He also apparently expanded on his beliefs, “Clearing the area around the railway is an important project which improves the image of our country.” Since Kim Jong Il’s words and “instructions” surpass all laws and institutions, his words immediately formed the “March 4th Decree” and were subsequently relayed to all officials in the Yangkang Province region.

Railways in North Korea

In North Korea, there is no protection surrounding railroads, which frequently cut across the center of cities. There are rules that prohibit the construction of public buildings, including residential homes, within 50 meters of railroad tracks, but such rules have existed in name only for a long time.

From the perspective of common citizens, the areas around the railways are some of the most active zones for economic activity. Of course, it is very dangerous when trains are passing, but since they run only once or twice a day at most, the danger is short-lived.

The railroad is a more direct route than the roads, which are in any case not always paved, so it helps conserve time for commuters or those going to markets. It is also convenient to travel on the rails on wooden blocks during the winter! In the border cities of Yangkang and North Hamkyung Provinces, railways running alongside the Yalu and Tumen Rivers serve as important smuggling routes to and from China.

Since the early 2000s, when citizens began to prefer convenient locations around railroads for selling goods or commuting to and from work, the North Korean authorities permitted the construction of residential homes, though bribes had to be offered to officials. In small and mid-size cities, many homes were built within 10 meters of railway tracks.

A source from Yangkang Province explained in a phone conversation with Daily NK on the 23rd while relaying the news of the groundbreaking ceremony, “Workers have to spend most of the year constructing homes. Many people will then be forcibly evacuated from the danger areas.”

The source further commented, “In Hyesan, several hundred households have to be relocated even if only the residential homes within 50 meters of the railway are demolished. Since land is available only on the outskirts of the cities, citizens slated for evacuation have been putting up strong resistance.”

The source also commented dryly, “In resettlement projects, homes are usually built very sloppily. It would be better if the state provided resources to the individuals to build the homes themselves.”

In the areas surrounding the railroad in Hyesan proper, where one-bedroom rentals by university students recently discharged from the army are commonplace, frustration has been running high. The source relayed that while the People’s Units around the railways have been holding daily meetings to decide on the households to be relocated, angry words and even fistfights have been rampant, making mutual agreement difficult if not impossible.

The Party in Hyesan allotted responsibility for the construction of new residences to each factory and enterprises. However, the construction materials provided by the North Korean authorities amounted to just 300kg of cement, which is barely enough for the under-floor heating of a house. Additional materials and means of transportation have to be provided in their entirety by the factories and the enterprises.

Even the citizens who do not live in the vicinity of the railways are incensed by the recent decree. Each household in Hyesan was ordered to make and offer 500 bricks of mud and straw. The factories, in order to secure fuel and other materials, have had to reduce the wages of workers, which at best are not even equivalent to two kilograms of rice, by half.

The source explained, “In 1992, 1,000 homes were built for the discharged soldiers who had been stationed in the Hyesan mine, but in less than three years, at least half had abandoned their homes. Residential homes built in Potae-ri, Samjiyeon or in Daehongdan look great on the outside, but they were all built sloppily, so the soldiers are living in poor conditions to this day.”

Posted in Construction, Railways, Real estate | Comments Closed

Chinese investment in DPRK

Wednesday, April 8th, 2009

Writing in the Wall Street Journal, Evan Ramstad offers some information on China’s investments in North Korea:

The diplomatic minuet is taking place after China increased trade with North Korea over the past four years. Last year, trade between China and North Korea jumped 41% to $2.79 billion, with most of that coming from increased exports by China.

On Tuesday, truck traffic between the two countries resumed after a break Monday for a Chinese holiday. Dozens of trucks made the crossing in Dandong, a major city along the North Korean border.

China has been North Korea’s chief political and economic sponsor since the Soviet Union collapsed nearly 20 years ago. For much of that time, it served as donor of last resort, making up the difference when energy, food and donations to North Korea dropped off from other countries. That often amounted to $100 million to $200 million in aid.

China broke from that pattern in 2005 by boosting its exports and widening its trade surplus with North Korea. Outside experts view China’s trade surplus as the chief measure of its economic aid to North Korea because North Korea has no measurable debt instrument and little ability to narrow the trade gap.

Chinese companies, sometimes with help from the Chinese government, are investing heavily in North Korea’s mining industry, construction and light manufacturing such as textiles. Chinese consumer goods line store shelves and market stalls in North Korea.

Many executives of Chinese companies in North Korea say it’s a difficult place to operate. Among the challenges: getting money out of the country. China helped Panda Electronics Group, based in Nanjing, start a computer assembly factory with Taedong River Computer Corp. in North Korea five years ago.

North Korea’s currency, the won, can’t be converted. To move money out of the country, Panda must buy commodities in North Korea and sell them in China for cash, an executive said.

The increased business activity in North Korea reflects China’s desire to treat North Korea more as a “normal country” rather than a socialist brother entitled to unlimited assistance, scholars and analysts in China say. They say China also hopes its companies in North Korea will encourage the North’s government to open its economy as China began to do in the 1980s.

Wang Kai, a manager of Liaoning Fuxin Tianxin Technology and Development Co., says the company decided to build a pipe-making factory in North Korea because the country’s economy has few places to go but up.

“North Korea’s situation and economic status are pretty similar to China’s before the start of the opening up and reform policy,” Mr. Wang said in an interview before the rocket launch.

Others note China’s desire is to prevent North Korea’s collapse, which might pour refugees into China’s northeast.

The increased business is yielding a payoff in political influence for China in Pyongyang that’s become more important since North Korean dictator Kim Jong Il was incapacitated by illness in August. One signal that Mr. Kim was back in control came when he met in late January with a delegation of visiting diplomats from Beijing.

Read the full story here:
Economic interests shape Beijing’s Pyongyang Policy
Wall Street Journal Online
Evan Romstad
4/8/2009

Posted in China, Construction, Foreign direct investment, International Aid, International trade, Light Industry, Manufacturing, Mining/Minerals | 2 Comments »

North Korea Google Earth

Wednesday, March 11th, 2009

North Korea Uncovered v.16
Download it here

The most recent version of North Korea Uncovered (North Korea Google Earth) has been published. Since being launched, this project has been continuously expanded and to date has been downloaded over 32,000 times.

Pictured to the left is a statue of Laurent Kabila of the Democratic Republic of Congo. This statue, as well as many others identified in this version of the project, was built by the North Koreans. According to a visitor:

From the neck down, the Kabila monument looks strangely like Kim Jong Il: baggy uniform, creased pants, the raised arm, a little book in his left hand. From the neck up, the statue is the thick, grim bald mug of Laurent Kabila (his son Joseph is the current president). “The body was made in North Korea,” explains my driver Felix. In other words, the body is Kim Jong Il’s, but with a fat, scowling Kabila head simply welded on.

This is particularly interesting because there are no known pictures of a Kim Jong il statue. The only KJI statue that is reported to exist is in front of the National Security Agency in Pyongyang. If a Kim Jong il statue does in fact exist, it might look something like this.

Thanks again to the anonymous contributors, readers, and fans of this project for your helpful advice and location information. This project would not be successful without your contributions.

Version 16 contains the following additions: Rakwon Machine Complex, Sinuiju Cosmetics Factory, Manpo Restaurant, Worker’s Party No. 3 Building (including Central Committee and Guidance Dept.), Pukchang Aluminum Factory, Pusan-ri Aluminum Factory, Pukchung Machine Complex, Mirim Block Factory, Pyongyang General Textile Factory, Chonnae Cement Factory, Pyongsu Rx Joint Venture, Tongbong Cooperative Farm, Chusang Cooperative Farm, Hoeryong Essential Foodstuff Factory, Kim Ki-song Hoeryong First Middle School , Mirim War University, electricity grid expansion, Tonghae Satellite Launching Ground (TSLG)” is also known as the “Musudan-ri Launching Station,” rebuilt electricity grid, Kumchang-ri suspected underground nuclear site, Wangjaesan Grand Monument, Phothae Revolutionary Site, Naedong Revolutionary Site, Kunja Revolutionary Site, Junggang Revolutionary Site, Phophyong Revolutionary Site, Samdung Revolutionary Site, Phyongsan Granite Mine, Songjin Iron and Steel Complex (Kimchaek), Swedish, German and British embassy building, Taehongdan Potato Processing Factory, Pyongyang Muyseum of Film and Theatrical Arts, Overseas Monuments built by DPRK: Rice Museum (Muzium Padi) in Malaysia, Statue de Patrice Lumumba (Kinshasa, DR Congo), National Heroes Acre (Windhoek, Namibia), Derg Monument (Addis Ababa, Ethiopia), National Heroes Acre (Harare, Zimbabwe), New State House (Windhoek, Namibia), Three Dikgosi (Chiefs) Monument (Gaborone, Botswana), 1st of May Square Statue of Agostinho Neto (Luanda, Angola), Momunment Heroinas Angolas (Luanda, Angola), Monument to the Martyrs of Kifangondo Battle (Luanda, Angola), Place de l’étoile rouge, (Porto Novo, Benin), Statue of King Béhanzin (Abomey, Benin), Monument to the African Renaissance (Dakar, Senegal), Monument to Laurent Kabila [pictured above] (Kinshasa, DR Congo).

Posted in Agriculture, Architecture, Art, Automobiles, Aviation, Banking, Coal, Communications, Computing/IT, Construction, Dams/hydro, Education, Electricity, Energy, Environmental protection, Figure skating, Film, Finance, Fiscal & monetary policy, Food, Football (soccer), Forestry, Gambling, Gasoline, General markets (FMR: Farmers Market), Golf, Google Earth, Health care, Hoteling, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Intranet, Kaesong Industrial Complex (KIC), Leisure, Library, Light Industry, Mansudae Overseas Development Group, Manufacturing, Mass games, Military, Mining/Minerals, Mt. Kumgang Tourist Special Zone, Music, Nuclear, Oil, Pyongyang Metro, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Real estate, Religion, Restaurants, Sea shipping, Special Economic Zones (Established before 2013), Sports, Telephones, Television, Tourism, Transportation, Water, Wind | 10 Comments »

Home make-overs: DPRK edition

Friday, February 27th, 2009

In the last twenty years, a number of 1960s-era, Soviet-style houses in the DPRK’s elite housing compounds have been upgraded into more “western-contemporary” housing. For example, compare Kenji Fujimoto’s 1989 Kangdong photo (below) with a 2004 image from Google Earth:

1989

2004

Judging from Google Earth imagery, this process is largely completed, though there still appear to be a few locations that that have not been remodeled. Looking at Onchon County (below) we can see that the reconstruction of old-style compounds was still under way as of 2005. The house on the left of both photos appears to already be upgraded in 2002, but by 2005 the unit on the right of the first photo (below) has been completely leveled. Reconstruction of this residence was probably underway into early 2006.

3/1/2002

3/2/2005

I do not know the calculus used to determine which residencies are updated, neither in degree nor order. I am also immediately unaware of which organization/s is/are responsible for construction/maintenance of these facilities. A KPA unit built Sihanouk’s palace on Lake Changsuwon, and it is reasonable to believe the same unit constructed in the above locations as well. If any readers have more information on this, please let me know.

UPDATE: (Hat tip to Mike) “The residences are either constructed on commission or they are presented to KJI, or some other CCKWP cadre, as a gift. KJI, his family, members of the Kang and Jang families, long time CCKWP members and select intelligence/security appartus officials are known to have designated homes.

The home are constructed by KPA construction units (like Changsuwon) in cooperation with civilian crews under the auspices of the Escort/Bodyguard Bureau. Some members of the civilian crews also work on the large monuments in the DPRK, and overseas. When the homes are built or renovated on commission, the financing comes from the CCKWP offices. A lot of the fixtures and furnishings are purchased through SOE’s or by discreet MOFA officers. A lot of these purchases are conducted in Beijing, Moscow, Geneva, Vienna and Paris. “

Not to draw to stark a comparison, but the reverse process is also evident through dated satellite photos. This warehouse/factory near the Bukchang Thermal Power Plant has clearly fallen into disrepair (and possible asset stripping) between 2002 and 2005.

7/7/2002