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Stratgeic alliances in North East Asia: Railways, ports, and energy

Tuesday, March 4th, 2008

Writing in today’s Asia Times, Dr. Leonid Petrov analyses the complexity of Russia, Rok, DPRK, and Chinese relations:

Russia and North Korea:

Territorial claims, in one form or another, involve almost all countries adjacent in this region with the exception of Russia and Korea. The Joint Russian Federation-DPRK Commission for the Demarcation of State Borders has recently completed its work by documenting and marking the 17-kilometer frontier. This strip of uninhabited and swampy land in the mouth of the Tumannaya (Tuman-gang) River plays an exceptionally important geopolitical role. It not only provides the two countries with land access to each other, but also prevents Chinese access to the East Sea (Sea of Japan).

China and North Korea:

Here, some 50km north of the small port that forms the core of North’s Rajin-Seonbong Special Economic Zone, the interests of Russia and China are now at stake. Russia is rapidly repairing the railroad track, and China (in a similarly speedy manner) is constructing a new automobile highway, both leading from their respective borders to the port of Rajin. Russia, investing at least 1.75 billion rubles (US$72 million) into this project, seeks to strongly connect Rajin (and the rest of northern Korea) to its Trans-Siberian Railroad. China, in turn, hopes to divert the growing cargo traffic to its own territory, offering the efficient network of railroads for delivery of South Korean and Japanese goods to Central Asian and European markets. What position will the government of North Korea take in this clash of ambitions?

Russia and South Korea (energy and trade):

In 2007, the volume of the export of “black gold” from Russia to South Korea reached 38.13 million barrels (2.7 times more than in the previous year). The relative proximity of the Russian oil and gas fields is an attractive factor for Korean companies who actively search for alternatives to Middle East oil suppliers. This year South Korea will for the first time start importing natural gas from Russia. The expected volume of delivery during 2008 is 1.5 million tons (or 5.1% of South Korea’s annual demand).

and

Trade relations between Russia and Korea are steadily growing. According to customs statistics, last year Russia recorded the sharpest increase of South Korean imports (56.2% more than in 2006). Due to the inflow of “petro-dollars” the new class of nouveaux riches in Russia began actively buying Korean automobiles, cell phones, television sets and LCD monitors. South Korea exported to Russia goods worth US$8.1 billion (including $3.296 billion of automobiles, $859 million of mobile phone equipment, motor vehicles and spare parts worth $659 million). As for trade with North Korea, in 2006 Russia occupied third place after China and South Korea and absorbed 9% of the total $3.18 billion spent by the North on imports.

More on Russia/South Korea energy talk here.

The whole article deserves reading here:
Russia lays new tracks in Korean ties
Asia Times
Leonid Petrov
3/5/2008

Posted in Automobiles, China, Electricity, Energy, Foreign direct investment, International trade, Natural Gas, Oil, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Russia, Sea shipping, Trade Statistics, Transportation | 6 Comments »

DPRK 2007 trade statistics from KIEP

Tuesday, March 4th, 2008

The Daily NK covers the release of KIEP’s analysis of North Korea’s external trade in 2007. I cannot find the report in English, so I have to take the Daily NK’s word for it–insert caveat here.

Here are the highlights:

The estimated total value of North Korea’s foreign trade decreased from US$2.996 billion 2006 to US$2.7 billion in 2007.
China occupies 70% of the trade volume, up from 56.7 in 2006 (a startling increase).
Trade with Japan fell to US$900,000, a decrease of 92% from 2006 (so it appears that some Chinese are getting rich from international trade restrictions).
Trade with Thailand fell 42.4% since the nuclear test.
Trade with the EU fell by 53.2% since the nuclear test.

To be honest I do not trust these numbers, so if someone comes across the KIEP report in English, please send it to me.

According to the Daily NK, the KIEP report is called: “Economic Prospect of North Korea in 2008” by Cho Myung Chul and Hong Ihk Pyo

The full story can be read here:
North Korea’s Economic Prospect for 2008
Daily NK
Yang Jung A
3/3/2008

Posted in China, EU, International trade, Japan, Thailand, Trade Statistics | Comments Closed

David Kang on North Korean trade potential

Tuesday, February 12th, 2008

Kang: North Korean Trade Potential
Council on Foreign Relations
12/17/2007

Last December, David C. Kang, a professor of government at Dartmouth College and an adjunct professor at Tuck Business School, discussed the North Korean economy for the Council on Foreign Relations. I have excerpted some of his comments below.

His view on the new North-South cargo train service:

It doesn’t have huge economic significance in the overall GDP of North Korea. But it does have major economic significance in the fact that what North Korea had to do in order to let a train go through was an awful lot of adjustment[…]in terms of linking up the railroad, all the ministries had to prepare. The old [Korean Energy Development Organization] had this problem as well. [W]hen they wanted Americans and South Koreans working in North Korea to build this light-water reactor, [they] had to set up protocols [Post offices, phone calls, where they were going to stay, etc]. It is pretty significant in terms of how much they had to adjust.

He quoted the following figures on North – South trade:

From $200 million in 1998, to now exceeding $1.7 billion in 2007. South Korea’s total trade volume is $250 billion.

His opinion on the direction of the North Korean economy:

At this point what we’re seeing is very initial steps on the part of North Korea as they try to open up reform and yet maintain control. At the same time, they are being forced into a number of institutional changes and mind-set changes that are the first step forward in this process.

His view of North Korea’s comparative advantage:

Most of the companies that have gone in—the South Korean companies that have gone in—are assembly and light manufactures, such as or textiles and light consumer goods. This is the sort of obvious point of departure. It’s not hugely capital intensive in terms of building factories, and can take advantage of North Korean cheap labor and South Korean technological advantages.

There are a lot of potential mineral resources in North Korea, which would require a whole infrastructure of legal reforms to happen before anyone would take care of them. But at this point the safest bets are the ones that are on the order of assembly and light manufactures in the North and then exporting them out.

His view of South Korea’s long term goals:

If there’s unification, or even better relations, and South Korean companies can use cheap North Korean labor, instead of having to send those factories to China or Vietnam—not only do they speak Korean, they’re culturally similar, and the labor would be cheaper.

[I]f you could reconnect the railroads, from Japan, through Pusan [South Korea], up through North Korea, then out to China and Russia, you would be linking up all these economies in a much more efficient way than they are now. So everybody wants that. But obviously there’s the political problem. And even on the infrastructure side, the North Korean rail system is so old and so decrepit, that basically it would have to be rebuilt from zero. But the potential upsides are massive, in the long run.

His view of China’s engagement:

China has been essentially as deeply involved in economic engagement with North Korea as has South Korea—and by some measures, actually more so. Whereas South Koreans just do this assembling, some Chinese companies are moving in and building full factories in the North. There’s a lot of interest in Chinese-North Korean economic relations on both sides.

Posted in China, Economic reform, Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Manufacturing, Mining/Minerals, Mt. Kumgang Tourist Special Zone, Political economy, Price liberalization, Railways, Rason Economic and Trade Zone (Rajin-Sonbong), Sea shipping, South Korea, Special Economic Zones (Established before 2013), Statistics, Trade Statistics, Transportation | Comments Closed

Pyongyang to start using buses with air conditioning

Tuesday, February 12th, 2008

Yonhap
2/12/2008

North Korea will begin using more than a hundred new buses with air conditioning for the convenience of a growing number of foreigners visiting Pyongyang, a U.S. government-funded radio station reported Tuesday.

Pyongyang’s municipal people’s committee recently requested a Chinese bus manufacturer to install air conditioning in 110 new buses to be used in the capital city, Radio Free Asia said.

The North already paid the cost in cash and 52 of the buses were already sent to Pyongyang, it said.

The communist state depends heavily on foreign aid to overcome its chronic energy shortage.

“North Korea is introducing buses with air conditioning to make Pyongyang look more advanced and urban in the eyes of foreign tourists whose number is on the rise,” the radio report said, quoting an unidentified source in China. “North Korean people have realized by watching TV dramas and other programs from South Korea that their living standards are not good enough.”

Posted in Bicycles, China, International trade, Transportation | Comments Closed

North Korean run restaurants diversify product lines

Thursday, February 7th, 2008

Writing today for the Asia Times, Sunny Lee gives an update on the North Korean-run restaurants in China and South East Asia. Much has already been published on these restaurants: how they channel money back to North Korea and how the waitresses tend to defect. (As mentioned in the Kaesong post yesterday, they probably also pay hefty bribes for their overseas posts and have well-connected relatives.)

Sunny Lee points out that these restaurants (see YouTube video here) are now diversifying their product lines to boost profits, and like other successful capitalists across Asia, they are doing it by leveraging their most unique asset–attractive North Korean women. How? By transforming into karaoke bars after dinner hours.

North Korea has some 100 restaurants overseas, mostly in China and Southeast Asia, including Laos, Vietnam and Cambodia. These restaurants serve as an important revenue pipeline for earning foreign currencies for Pyongyang. Each overseas North Korean restaurant is said to be allotted a revenue quota to fill, ranging from US$100,000 to $300,000 a year to send to Pyongyang, which makes the total revenue estimation some tens of millions of dollars.

The business formula – restaurant by day and karaoke bar by night – is also seen as an effort for these restaurants to meet the assigned financial quota. Currently, there are scores of North Korean restaurants in China, including in cities such as Beijing, Tianjin, Tsingdao, Dandong and Yanji. Beijing has 11 North Korean restaurants. All of these employ North Koreans whose total employment number in China is estimated to be several hundred. (Asia Times)

Despite the higher cost, business is brisk…

The reason that North Korean restaurants are expensive yet remain popular among customers is their immaculate service from beautiful employees. In China, where service quality at restaurants is often unsatisfactory, North Korean restaurants are becoming a favorite alternative among members of the businesses community. (Asia Times)

However, if you want to enjoy an authentic North Korean dining experience but have moral qualms about supporting the regime, then you can patronize similar resturants managed by North Korean defectors in South Korea–though the experience is quite different. Whereas the Chinese pay extra for premium restaurant service in Beijing, the South Koreans pay for the genuine socialist restaurant experience. In other words, they pay to be treated like an annoyance to the staff.

[At the Pyongyang Moran Bar (located in South Korea), the] North Korean waitresses wore traditional dresses in the bright colors that were fashionable in the South some years back. The singer’s interpretation of “Whistle,” a North Korean standard of the 1980’s, was shaky and off-key. Service was bad and included at least one mild threat. Drinks were spilled, beer bottles left unopened and unpoured.

But the South Korean customers could not get enough of the Pyongyang Moran Bar. (New York Times)

So you have your choice of North Korean themed restaurants: The propaganda ideal or the socialist reality.

The full articles can be found here:
Chillin’ at a North Korean karaoke bar
Asia Times
Sunny Lee
2/8/2008

In Deep South, North Koreans Find a Hot Market
New York Times
Norimitsu Onishi
5/25/2006

Posted in China, Economic reform, Education, Finance, Fiscal & monetary policy, Foreign direct investment, Joint Ventures, Restaurants, South Korea | Comments Closed

IFES DPRK monthly recap: January 2008

Tuesday, February 5th, 2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-2-5-1
2/5/2008

Kim Jong Il’s first visit of the year was reported on January 6 to have been to the Ryesonggnang hydro-electric power plant. Generally, the leader’s visits in the first months of the year, along with the New Year’s Joint Editorial, which focused on economic recovery, set the tone for the coming year’s policies. His second inspection of the year was to a military unit.

Defectors claim that prostitution is on the rise in North Korea, and on January 9, the aid group ‘Good Friends’ reported that the DPRK has begun to close massage parlors as part of a crackdown on prostitution. The agency reported that in the DPRK there was a “steady campaign to weed out decadent foreign culture,” and that in September, DPRK soldiers were ordered to avoid alcohol, sex, and money.

On January 16, it was reported that Kim Jong Il had instructed all DPRK institutions to reduce their bureaucracies, including senior staff, by thirty percent.

Figures released by North Korea’s Korean Central News Agency indicate that the DPRK’s population had increased to 23.6 million in 2004, the latest available figures. According to DPRK figures, the population has grown from 22.1 million in 1996.

North Korea announced the closure of its Australian embassy on January 22. While the DPRK will continue to maintain diplomatic relations with Australia, it apparently can no longer afford to maintain an embassy in Canberra.

According to a report released by the International Red Cross, North Korea has the largest number of people in the world killed by natural disasters over the past decade. The report states that 458 thousand North Koreans have died from natural disaster, 38 percent of the disaster-caused deaths in 220 countries from 1997-2006.

A U.S. Senate investigation reported that the DPRK funneled as much as 2.7 million USD through a bank account set up from UN development projects. The report stated that North Korea used the UN account due to fears that the United States would block its ability to transfer money internationally.

DPRK Nuclear Negotiations

2008 opened with the United States and Japan releasing statements expressing their disappointment at North Korea’s failure to meet its December 31 deadline to fully disclose the extent of its nuclear programs, while North Korea’s New Year’s Joint Editorial called for “stability on the Korean Peninsula and peace in the world” as well as an end to hostile U.S. policies. A U.S. White House spokesman stressed that there was still opportunity to move forward with negotiations, stating, “the important thing is that we get a declaration that…needs to be full and complete,” not whether the declaration is made by the deadline.

On January 4, North Korea claimed it had met its obligations to come clean on its nuclear programs, and that it had provided Washington with a list of its nuclear programs in November. Pyongyang also threatened to bolster its “war deterrent” because Washington had failed to provide promised aid following the declaration. Washington denied that any complete declaration had been made.

A senior Russian diplomat was quoted on January 11 as saying that while Russia regrets the slowed state of progress in talks on DPRK nuclear issues, Russia will fulfill its promise to provide the North with fuel oil. 50,000 tons of fuel oil were delivered on January 20~21.

According to a book of figures recently published by the National Statistical Office, ”Comparison of North and South Korean Socio-economic Circumstances”, the DPRK”s crude imports over the past several years bottomed out at 2,325,000 barrels in 1999, then rose to 4,244,000 barrels by 2001. Since 2001, imports have steadily fallen until only 3,841,000 barrels were imported in 2006, recording the least imports in the last five years.

North Korea opened its first online shopping mall in January. The site offers items from fourteen categories ranging from machinery and building materials to stamps and artworks. The site, www.dprk-economy.com/en/shop/index.php, is based in China.

Orascom Telecom, a Cairo-based phone operator, has been granted the first commercial license for provision of mobile phone services in North Korea. The license was granted to CHEO Technology, a subsidiary that is 25 percent-owned by the state-run Korea Post and Telecommunications Corporation.

DPRK Abduction Issue

The Cambodian Foreign Minister announced on January 16 that his country had been working behind the scenes to find a resolution to the DPRK-Japan abduction issue. The minister stated, “Cambodia is in a position where it can hold high-level meetings with North Korea, and it has the ability to persuade North Korea.”

Inter-Korean Affairs

The incoming Lee Myung-bak administration announced on January 4 a plan to develop an international cooperative fund to support North Korea’s economy. The plan is said to call for World Bank and the Asia Development Bank to help, and for South Korea to provide 40 billion USD.

On January 7, it was reported that Lee Myung-bak’s presidential transition team had asked the ROK Unification Ministry to slow the pace of inter-Korean economic projects and to link them to progress in the six-party talks. The incoming administration has promised not to link humanitarian projects such as rice and fertilizer aid to nuclear negotiations.

The Lee Myung-bak administration announced plans for downsizing the South Korean government, including disbanding of the Ministry of Unification. Opposition to the plan points out the role played by the ministry in improving inter-Korean relations, while proponents to the plan of relegating the ministry’s duties to the Ministry of Foreign Affairs and Trade applaud the move to align North Korea policy with standing foreign policy directives.

On January 14, it was reported that Lee Myung-bak had asked the United States to further engage in talks with DPRK military leaders, while presenting a balanced approach, stating that “our people don’t support the idea of giving lavish aid to the North nor do they want to irritate it too much, I believe.” He went on to add that the United States holds the key to easing DPRK fears of opening up.

The net worth of inter-Korean exchanges totaled 1,797,890,000 USD in 2007, up 33% from the 1.35 billion USD in the previous year. The almost 1.8 billion dollars in trade recorded in 2007 is the highest to date, and is equal to 65 percent of the DPRK”s non-Korean trade volume of 2.996 billion USD in 2006.

The Seoul-based International Vaccine Institute announced on January 14 that it will soon begin inoculating approximately six thousand North Korean children against bacterial meningitis and Japanese encephalitis.

The two Koreas began working-level military talks on January 25, marking the first talks of the year. During talks, the North proposed reducing the frequency of the inter-Korean rail services, citing a lack of cargo. The Southern delegation felt that the frequency was an important indication of inter-Korean cooperation. The two sides agreed to continue daily runs, but to reduce the number of empty carriages in the future.

North Korea is still not as attractive to businesses as other Asian neighbors. A survey released by the (South) Korea Chamber of Commerce and Industry on January 28 indicated that China and Vietnam are more attractive to ROK businesses. According to the survey, 80 percent of businesses have difficulties starting or operating businesses in North Korea.

An ROK special envoy returned on January 23 from Moscow after proposing a joint ROK-DPRK-Russian cooperative project in eastern Siberia. President-elect Lee Myung-bak sent a letter to Russian President Vladimir Putin pushing for cooperation of “North Korea’s workforce, Russia’s resources and capital, and [South] Korean technology.”

U.S.-DPRK Relations

On January 9, amidst reports concerning possible DPRK-Syria nuclear connections, it was reported that in 1991 Israel was posed to strike a ship suspected of delivering missiles from the DPRK to Syria, but was dissuaded by Washington.

A U.S. State Department official stated on January 22 that North Korea had met the legal criteria to be removed from the U.S. list of state sponsors of terrorism. This came just after reports of conflicting opinions within the Bush administration, with Secretary of State Condoleezza Rice sharply rebuking Special Envoy on North Korean Human Rights Lefkowitz, who stated that North Korea is not serious about nuclear disarmament. Rice went so far as to say that Lefkowitz “certainly has no say on what American policy will be in the six-party talks,” dismissing his negative position on the failure of North Korea to meet its obligations. The White House later stated that North Korea must make a full declaration of its nuclear activities before being removed from the list.

Five officials from the DPRK recently visited the United States in order to learn how to treat and prevent tuberculosis, a serious concern for the North that is “practically non-existent in most developed countries.” The officials were invited by The Korea Society, which is based in New York.

DPRK-PRC Relations

According to the PRC General Administration of Customs, China’s oil exports to North Korea were the same in 2007 as they were in 2006. China sent 523,160 tons of oil to North Korea in 2007.

A senior PRC Communist Party official traveled to Pyongyang for a meeting with Kim Jong Il on January 30. Wang Jiarui, director of the International Liaison Department of the Chinese communist party, was to convey a message to Kim, inviting him to the opening ceremony of the Beijing Olympics. While Kim reportedly told Wang that there would be no change in the DPRK stance on nuclear negotiations, he also assured the Chinese envoy that North Korea had no intention of harming DPRK-PRC relations.

Posted in China, Civil society, Dams/hydro, Dating/Courting, Demographics, Disease prevention, Energy, Health care, Institute for Far Eastern Studies, Inter-Korean summit, International trade, International/Korean Red Cross, Labor conditions/wages, Nuclear, Pediatrics, Political economy, Trade Statistics, UNDP, USA | Comments Closed

DPRK’s largest copper mine flooded with difficulties

Saturday, February 2nd, 2008

Institute for Far Eastern Studies
NK Brief No. 08-1-29-1

It is being reported that North Korea’s Chungnyun Mine, in Hyesan, Ryanggang Province, is facing severe economic difficulties due to floodwater. Hyesan mines produce 80 percent of all North Korean copper, and the North had estimated that it will be able to continue mining copper there for the next forty years. Chinese firms in Hebei’s Luan River region had wanted to import 51 percent of Hyesan Chungnyun Mine’s product, but the deal fell through due to opposition from North Korea’s committee overseeing its second (military) economy.

In 1996, during the North’s ‘Arduous March’, electricity was not provided to the mine, leading to flooding in the mineshafts. Since 1998, Kim Jong Il has budgeted 8.2 million USD to dewater the mine, and the mine was recovered using electricity and equipment provided by China.

The mine resumed operations in May, 2004, and in March of last year even an ore-dressing plant and crushing facility were constructed, indicating that there were high expectations that production would grow. However, as water filled up at the dam for the near-by Samsoo Powerplant, completed in May, the mines began to flood again.

There was no end to criticism that the powerplant, located in Jangan-Ri, Hyesan, Ryanggang Province, was to be constructed on a limestone foundation that would leech massive amounts of water, however, as a result of its construction, despite this opposition, water leaks out of the power station and has flooded the mine.

In the event that North Korea abandons the Hyesan Chungnyun Mine, it will be faced with the difficulty of needing to import the large amounts of copper required by the manufacturing industry. As this mine began to flood, North Korea has begun to import most of the copper necessary for its economy from Chile.

Currently, there is no feasible way to technically restore the mine, so as senior authorities in the North are demanding that the mine be saved at any cost, those in charge of operations are said to be uneasy.

Posted in China, Copper, Finance, Foreign direct investment, Institute for Far Eastern Studies, Mining/Minerals | Comments Closed

DPRK economic statistics from KEI (BoK data)

Saturday, February 2nd, 2008

In October, the Korea Economic Institute published a presentation of North Korean economic data assembled by the Bank of Korea. Basic stats below:

GDP: -1.1% in 2006 (+3.8% in 2005)-Due to decrease in agriculture output.
Services are the largest component of the economy (34%)
Trade volume (exports + imports) approximately US$3 billion
2005 trading partners in order: China, South Korea, Thailand, Russia, Japan, Singapore

See the full report here: northkorea.ppt

Posted in Agriculture, Agriculture statistics, China, GDP statistics, Japan, Russia, Singapore, Statistics, Thailand, Trade Statistics | Comments Closed

One eye on the fish, the other on North Korea

Friday, February 1st, 2008

The New York Times (free registration required) ran an article today on Baengnyeong Island, South Korea’s northern most island which is below the NLL (the de jure, though disputed, sea border between the DPRK and the ROK), but only 10 miles from the coast of North Korea.

Fishermen have gone missing from this island for years, and occasionally, naval clashes erupt between the DPRK and ROK. The latter problem, though not the former, was an agenda item on the most recent Inter-Korea talks between Kim Jong Il and the former South Korean President Roh Moo-hyun.

The island is now a sad reminder of the costs of division and isolation:

[F]or Chang Hyung-soo, a 64-year-old retired diver here, this narrow strip of water is what separates him from his hometown [in the PDRK]. It also separates him from three of his friends who were lost in fog while fishing and taken to North Korea three decades ago.

and…

“A few weeks ago, a 93-year-old man came here to take a last look at his hometown across the channel before he died,” Mr. Chang, the retired diver, said from the hilltop. “But he could see nothing because of the fog. I still remember the old man’s tears of disappointment.”

Complicating the matter, however, is the competition from Chinese fishersmen granted territorial access by the DPRK:

To make matters worse, hundreds of Chinese fishing boats, after paying fees to the North Korean Navy, have sailed into waters between their islands and North Korea in recent years while the South Korean fishermen have been restricted to waters close to their own shores.

“The Chinese trawlers catch anything, everything, and deplete our seas,” said Kim Myong-san, 78, who first came to the island as a marine and settled here with his wife.

Notes:
One Eye on the Fish, the Other on North Korea
New York Times
Choe Sang-Hun
1/31/2008

Top image from Google Earth. Download “North Korea Uncovered” to see this location on your own Google Earth.

Posted in Agriculture, China, Google Earth, Military, Sea shipping, Transportation | Comments Closed

Price of Flour Goes Up, So Difficult to Sell Dumplings

Thursday, January 31st, 2008

Daily NK
Yang Jung A
1/31/2008

Due to the food export restraint imposed by China, the price of food items have been rising significantly recently, revealed Good Friends, a nongovernmental organization for North Korea, through a newsletter released on the 30th.

The newsletter relayed, “The price of rice, flour, corn, and grains has been continuously rising due to a systematic adjustment in trade exchange with China. With the Beijing Olympics ahead, the duties on food items have gone up 5% for rice, 20% for corn, and 20~25% for flour.

The newsletter also divulged that “China demands an export permit for grains. Rice and corn are flowing into North Korea because the export permits issued last year still remain in effect. However, China has not yet demanded any export permits for flour, and therefore flour cannot be exported to North Korea.”

“As a result, the price of flour has been increasing rapidly within just a month. In December of last year, the price of flour remained at 1,000 won per unit for the most part, but since the new year, it rose to 1,700 won per unit. People who have been selling bread, dumplings, and snacks have not been able to do business due to the shortage of flour.”

The source relayed, “The North Korean custom house has been requesting a quality verification report on par with international standards at the time of the importing of Chinese food products, but a majority of merchants with whom food is traded has not been able to follow the new standard yet, saying such documents are hard to provide.”

“So, the food items have not been imported into the market, which has caused the price to continuously rise due to the lack of provisions. Nowadays, even if people tried to buy a 1 kg of rice for over 1,400 won, they are unable. Chinese companies who have been dealing with North Korea have predicted that the cease in trading with Chosun (North Korea) will give rise to a food shortage.

The Ministry of Commerce of the People’s Republic of China announced the process of registration and 2008 conditions for registration for milled farming export quarter on the 19th and has implemented a method for the provisional food export of rice, corn, and flour starting January of this year. Related parties of North Korea-Chinese trade forecasted that food exports to North Korea will be reduced significantly as a result of the stringent food export conditions imposed by the Chinese government.

Posted in 2002 Economic reforms, Agriculture, China, General markets (FMR: Farmers Market), Good Friends, International trade, Price liberalization | Comments Closed

North Korean Economy Watch