Archive for the ‘International Governments’ Category

Why the North Korea–China trade increase could be an illusion

Wednesday, May 24th, 2023

By: Benjamin Katzeff Silberstein

North Korea–China trade is steadily growing, perhaps slowly moving back to its normal  before Covid-19 -“Maximum pressure” sanctions in 2016–2017. According to the latest numbers, trade continues to grow:

Chinese outbound shipments to the isolated country surged 69% year-on-year to $166 million in April, data released by China’s General Administration of Customs showed.

The top export items in terms of value were processed hair and wool used in wigs, worth about $11.6 million, and diammonium hydrogen phosphate, a widely used fertiliser, worth $8.84 million.

But it is far from back to the “old normal” before 2017. Look, for example, at what is being exported. The biggest export products were wigs and fake eyelashes, accounting for over 66 percent of exports to China. This is part of an offshoring industry where North Korea first imports hair from China, and then locally manufactures it into wigs to export back. Sales of wigs, eyelashes and related products accounted for close to $22.7 million in April. To get a sense of proportion, consider that coal exports, formerly one of North Korea’s most central export goods, totalled $1.19 billion in 2016, a little over $99 million per month on average. So when we look at North Korea’s most central exports at the moment, they are still very small compared to the increasingly distant normal. Wigs just aren’t economically meaningful in the same way as coal.

None of this is to say the increase in trade isn’t meaningful. North Korean imports from China may be just as meaningful or perhaps even more so for the economy at this point, with inputs both for export-destined wigs and fertilizer being the central import goods. The increase in trade is certainly positive for the North Korean economy, but it does not seem to (yet) change the overall dynamics where North Korea still cannot export its formerly most important export goods openly, without circumvention and smuggling that involves significant costs. It could be that covert exports will eventually reach the old level of openly reported exports, but we don’t have any hard data to suggest that is yet the case.

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Yet another North Korea–China border opening report (including tourism)

Thursday, May 11th, 2023

By Benjamin Katzeff Silberstein

At this point, non-materializing reports about the China–North Korea opening for full traffic are too many to count. A recent story by SCMP (link here) claims both truck trade and tourism from China to North Korea will start in one month. But “sources briefed by officials on both sides” is an acknowledgment that the report is not based on direct sources. And as has seemed the case for North Korea since Covid-19, plans for policy changes can often change and often do. Judging by the policy pattern, there doesn’t seem to be an overall strategy or timeplan.

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As Chinese ambassador arrives, is North Korea opening up?

Thursday, March 30th, 2023

By: Benjamin Katzeff Silberstein

After a very long hiatus over the pandemic, China’s new ambassador to North Korea has taken up his post in Pyongyang, AP reports:

Wang Yajun will help in the development of the traditional friendship between the “close neighbors sharing mountains and rivers,” Foreign Ministry spokesperson Mao Ning said at a daily briefing.

China is North Korea’s main source of economic aid and political support, but interactions have been disrupted by travel restrictions imposed in an attempt to prevent the spread of COVID-19.

The ambassador’s posting comes as North Korean state media reported that leader Kim Jong Un urged his nuclear scientists to increase production of weapons-grade material to make bombs to put on the country’s widening range of weapons.

The report Tuesday followed a series of missile launches — seven this month alone — and rising threats to use the weapons against North Korea’s enemies.

(Full article here.)

Does this signal a broader relaxation in North Korea’s border restrictions, brightening prospects for trade to open up more broadly as well? Maybe. After all, there’s been signs for many months (well over a year), from infrastructure construction to (fairly tangible) rumors reported from the border area. And imports have increased, particularly of food, resulting in prices stabilizing somewhat.

At the same time, there are good reasons to doubt it. Welcoming back a Chinese envoy is, after all, a decision more in the realm of foreign policy and diplomacy than economics and pandemic prevention. Thus far there have been no reports in outlets such as Daily NK or Rimjingang suggesting a major reversal in trade policy is imminent. To the contrary, the bigger pattern seems to be the state centralizing control over trade while keeping it at a very small minimum. Whatever trade regime emerges from this, it may not look like the old one.

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What upgrades of North Korea’s surveillance equipment say about policies and priorities

Monday, November 7th, 2022

By: Benjamin Katzeff Silberstein 

According to a recent report, North Korean authorities upgraded their system for monitoring and detecting use of foreign-made cell phones (which is illegal) along the border. This is all part of the general crackdown on “anti-socialist” phenomena over the last four-five years, and under Covid-19 in particular:

North Korea has replaced radio wave detectors installed in regions along the China-North Korea border with the latest models.

The authorities use the radio wave detectors to crack down on illegal mobile phones.

According to a Daily NK source in Yanggang Province, North Korean authorities recently replaced the radio wave detectors in border regions such as Hyesan and Samjiyon as part of its efforts to ferret out locals who use illegal foreign-made mobile phones.

The Ministry of State Security’s Bureau 10, the division in charge of radio wave surveillance, replaced the equipment under top secrecy from Oct. 1 to Oct. 15.

The source said that given how the ministry upgraded its detectors along the border to the latest models, it seems the ministry will once again wage a fierce war to root out users of illegal foreign-made mobile phones.

In fact, since the COVID-19 pandemic, the Ministry of State Security has been conducting a sweeping “mop-up war” and “war of annihilation” in border regions against people who use illegal foreign-made mobile phones.

The Ministry of State Security has arrested many border residents on espionage charges, subjecting them to forced labor of varying severity. In serious cases, the ministry has even dragged off locals to political prison camps.

With border residents continuing to use illegal mobile phones to contact China, South Korea or other countries despite these efforts, the Ministry of State Security appears to have replaced its existing radio wave detectors with high-end ones capable of tracking the location of mobile phone users more quickly and accurately.

A defector who came to South Korea in 2019 told Daily NK that given how the Ministry of State Security installed the old radio wave detectors several years ago, it may have been time to replace them.

“In fact, if the ministry replaced them with new, highly capable radio wave detectors, it means they want to root out more Chinese-made mobile phone users, and even if not, the rumor that it installed new devices would have been effective in generating fear that the authorities will catch people who use Chinese-made mobile phones,” he said.

(Source: Kim Chae-hwan, “N. Korea replaces radio wave detectors on border with the latest models,” Daily NK, November 3, 2022.)

None of this information is possible to confirm, and the report relies on a small number of sources. Nonetheless, if accurate, the news is interesting for several reasons. For one, it highlights the regime’s increasing reliance on, and investments in, technology for surveillance. Moreover, it further highlights the government’s emphasis on border control and information censorship, which has increased significantly over the past few years.

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North Korean imports from China turning toward food

Thursday, November 3rd, 2022

By Benjamin Katzeff Silberstein

The first items North Korea imported from China when railway freight trade started back up were mainly industrial goods, but lately, imports appear to have shifted more toward foodstuffs. Daily NK

According to a Daily NK source in China last Friday, freight trains have been departing every morning from the Chinese city of Dandong for the North Korean city of Sinuiju since Sept. 26.

From late September to early October, the freight cars have been mostly laden with aluminum window frames, tiles, living room lights and other construction supplies, but from mid-October, the trains are carrying a wider range of cargo.

Trains entering North Korea still carry construction or interior supplies such as aluminum window frames, wood for furniture and sawdust, as well as medical supplies like masks and antibiotics. However, since mid-October, foodstuffs have accounted for a far higher share of imports, so much so that over half of freight cars have been laden with various food items.

In fact, the items now accounting for a greater share of North Korean imports by freight trains from China include soybean paste, soy sauce, red pepper powder, sugar, seasonings, vinegar, garlic soybeans and other items. In particular, imports of foodstuffs needed to make kimchi have reportedly increased with the start of kimjang, or the kimchi-making season.

However, the freight trains have yet to begin carrying grains such as rice or wheat flour.

(Source: Seulkee Jang, “N. Korea is now focusing on importing food from China,” Daily NK, November 1st, 2022.)

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North Korea reportedly sending more workers to occupied Ukraine

Wednesday, October 26th, 2022

By Benjamin Katzeff Silberstein 

I want to emphasize that this is all far from confirmed and that Daily NK, by the nature of their work, often has to rely on a very small number of sources. Nonetheless, this report suggests authorities in North Korea are preparing to send additional workers to Russian-occupied Ukraine, other than those that have already supposedly been selected. Although the move itself is political in context, as the source notes in the article, reasons are likely mainly financial for North Korea.

North Korea plans to select additional laborers to send to Russian-occupied regions of eastern Ukraine. In fact, Pyongyang plans to send about 300 people, with the primary goal being to earn foreign currency.

A source in North Korea told Daily NK on Monday that the country plans to start the second round of selections on Nov. 1. He said the authorities have issued “recommendation rights” to each Cabinet ministry and committee, and that each workplace must submit recommendations to the Workers’ Party’s Cadres Department (human resources department) by the end of November. 

Daily NK previously reported that North Korea had selected personnel to dispatch for reconstruction efforts in regions of eastern Ukraine occupied by Russia.

“Through the second round of selections, North Korea plans to organize a total of six teams [to be sent to Russian-occupied areas of Ukraine],” said the source. “About 50 people will be in each team, so it seems about 300 people will be chosen nationwide. Considering the first round of selections [about 800-1,000 people], the country plans to send a large number of people overseas.”

The source said people in Pyongyang or with connections to the Cadres Department are not inquiring about the location — presumably because they already know about Ukraine — nor do they want their family members to apply for the job.

“Since Pyongyang residents aren’t going, the authorities are giving as many recommendations as they can to provincial residents,” he said.

The source further explained that officials in the cadre departments of major cities like Pyongyang, Nampo and Pyongsong complain that this is the first time in 30 years that they have seen people avoid a chance to go overseas. They say this is a marked contrast with the old days, when people needed official recommendations to go abroad.

On the other hand, provincial residents reportedly demonstrate no real hesitation to apply. The source said volunteers do not believe they are going to die, even if eastern Ukraine is a conflict zone.

“Some provincial residents optimistically believe that the state would never drive them to their deaths,” said the source. “It seems they think the government will conclude a good contract with Russia so that they can work in the safest place possible.”

(Source: Mun Dong Hui, “N. Korea to select additional laborers to work in Russian-occupied regions of Ukraine,” Daily NK, October 26th, 2022.)

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North Korean trade with China in September highest since Covid-19 began

Tuesday, October 25th, 2022

By: Benjamin Katzeff Silberstein 

The latest figures are out for China-North Korea trade. Overall, trade in September was at its highest since Covid-19 began, which is particularly significant considering that rail traffic, one of the most central routes for goods, only started back up late that month. Total trade stood at $142.7 million. In January 2020, the same figure was slightly under $200 million. This was already a fairly low figure, but one that would have likely climbed steadily were it not for Covid-19.

$14.2 million consisted of exports, with the vast majority being imports. North Korea’s main export goods were iron ore and other mineral- and mining-related products.

North Korea mainly imported medicines and industrial goods, with truck tires being its main import. It is a crucial good for most sectors that depend on domestic transportation and the shortage of tires (whose domestically produced quality is low) has likely caused considerable difficulties.

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North Korean workers selected to go to Russian-occupied Ukraine, will go in November

Friday, October 21st, 2022

By Benjamin Katzeff Silberstein

I don’t think we’ll fully know how solid and extensive plans are for the dispatch of North Korean workers to Russian-occupied territories in Ukraine until “boots” actually start to arrive on the ground, if even then. A recent report by Daily NK says that authorities have finished selecting workers who will go. It suggests that any contingent that may be sent will be fairly small — 800 to 1,000 — and that they will begin to arrive in November:

North Korea has completed the process of selecting workers to take part in reconstruction efforts in Russian-occupied parts of eastern Ukraine, with plans to send the workers to the region in early November.

A source in North Korea told Daily NK on Monday that the authorities carried out the selection in Pyongyang from July, and that “800 to 1,000” workers were recruited.

Daily NK reported in August that North Korea had planned to send some North Korean workers already in Russia to the Donbas, and that North Korean authorities had also selected workers in North Korea to dispatch to the region.

In fact, Daily NK’s source said the newly selected workers in North Korea would be sent in turns in small teams of 30 to 60 people.

“No firm date has been selected, but they plan to send the selected workers in early November as they select new workers,” he said.

This suggests that North Korea — having weighed when to send the workers while carefully watching the progress of the war — is preparing to send personnel in early November, and also intends to conduct a second round of selections of workers to send to the Donbas.

As for how the workers would get where they need to go, officials are discussing plans to send them by train from the northeastern city of Rason, or by flying them aboard an Air Koryo flight to Vladivostok. Also reportedly being discussed is a plan to send them to Moscow or Saint Petersburg via Beijing.

The source said China has “decided to feign ignorance” since the workers are only transiting through the country, not stepping foot in it.

“North Korea, China and Russia have agreed that sending North Korean workers to Russian-occupied areas would not constitute a violation of sanctions,” he said.

The source added that since sending the workers to Russia through Beijing would cost about the same as sending them through Vladivostok, officials are largely considering sending the workers through the Russian city.

(Source: Mun Dong Hui, “N. Korea finalizes selection of workers to join reconstruction efforts in Russian-occupied parts of Ukraine,” Daily NK, October 21st, 2022.)

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North Korea-China trade officially reopened

Monday, September 26th, 2022

By Benjamin Katzeff Silberstein

On September 26, a spokesperson for the Chinese Foreign Ministry officially stated that railroad traffic between China and North Korea would restart yet again, after the brief opening and sudden cancellation five months ago. The same say, a freight train crossing the border was caught on video. Bloomberg:

Foreign Ministry spokesman Wang Wenbin said Monday at a regular press briefing in Beijing the cargo rail link between the China and North Korea is reopening, after service was halted in April as part of measures to control Covid.

“The two sides will continue to strengthen coordination to ensure the steady and secure transport of goods, and contribute to friendly relations between China and the DPRK,” Wang said, referring to North Korea by its formal name.

The rail connection between the city of Dandong in China and Sinuiju in North Korea is Kim’s main link to China, his country’s biggest trading partner by far. Reopening the trade route could take pressure off Kim to return to stalled nuclear disarmament talks with the U.S., where the Biden administration is dangling the prospects financial rewards in exchange for steps to wind down its atomic arsenal.

The link was closed in 2020 near the start of the pandemic when Kim shut the borders to prevent the coronavirus from entering, and was briefly reopened in January of this year. Video on social media on Monday showed a freight train that appeared to be crossing from the Chinese side into North Korea.

(Source: “China, North Korea Restore Rail Link on Kim’s Key Trade Route,” Bloomberg News, September 26th, 2022.)

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North Korea denies weapons sales to Russia

Thursday, September 22nd, 2022

By Benjamin Katzeff Silberstein

As per New York Times earlier this fall, US intelligence believes North Korea has sold weapons to Russia in aid of its attempt to invade Ukraine. North Korean authorities, for what it’s worth, have publicly denied this. Judging from the evidence reported so far, it doesn’t yet seem fully confirmed that any such weapons trade has in fact taken place. There’s little reason to doubt it’s been discussed — Russia is probably weighing all conceivable options for arms purchases and North Korea isn’t usually a picky seller. AP:

In a state media report Thursday, an unnamed North Korean defense official told the U.S. to stop making “reckless remarks” and to “keep its mouth shut.” Biden administration officials earlier this month confirmed a declassified U.S. intelligence assessment that Russia was in the process of purchasing arms from North Korea, including millions of artillery shells and rockets, as Moscow attempts to ease severe supply shortages in Ukraine worsened by U.S.-led export controls and sanctions.

The North Korean statement came weeks after Moscow described the U.S. intelligence finding as “fake.”

North Korean arms exports to Russia would violate United Nations resolutions banning the country from importing or exporting weapons.

(Source: Kim Tong-Hyung, “North Korea denies sending arms to Russia amid Ukraine war,” AP News September 22nd, 2022.)

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