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Growth of N. Korea-China trade tumbles to five-year low

Monday, August 28th, 2006

From Yonhap:
Byun Duk-kun

The increase in the first-half trade between North Korea and China fell to the smallest volume in five years, South Korea’s Unification Ministry said Monday.

Ministry officials said the slowdown did not appear to be linked to North Korea’s recent provocations, such as the test-firing of seven ballistic missiles in early July.

The amount of North Korea-China trade only increased 4.7 percent on-year to US$780 million in the January-June period, Kim Nam-sik, head of the ministry’s information and analysis bureau, told reporters.

This marked the smallest, as well as the first slowdown of, increase in trade between the close allies since 2002 when trade volume increased by 6.2 percent for the same period from a year before.

The year-on-year growth in the first-half Sino-North Korea trade reached 16.2 percent in 2003, 37 percent in 2004 and 43 percent last year, according to Kim.

The report comes amid reported signs that Beijing may have begun taking measures to reduce or limit its economic cooperation with Pyongyang as a way of expressing its dismay or anger at the North for its test-firing of seven ballistic missiles on July 5.

The ministry official, however, cautioned against interpreting the slowdown as signs of a possible disruption in relations between the communist allies, saying the reason for the slowdown appears to be economic rather than political.

“Many experts believe it (the slowdown) is more due to economic than political reasons,” Kim said.

The amount of North Korea’s exports to China for the first six months of the year decreased by more than 14 percent to some $200 million, also marking the first decline since 2000, according to a report by the information bureau.

Kim said this, too, was mainly because of economic reasons, such as the reduced price of North Korean exports to China “while the amount of exports remains the same” from that of last year.

Analysts here believe China may completely halt its economic and political relations with the North if Pyongyang decides to conduct a nuclear test.

The ministry official said there were no immediate signs of China taking such measures to punish North Korea.

Posted in China, International trade, Trade Statistics | Comments Closed

Pyongyang Selling Missiles in Pieces: Report

Monday, August 28th, 2006

From the Korea Times:

North Korea has recently changed its means of selling missiles to avoid interception, delivering them by air instead of by sea and in the form of components and equipment rather than complete products, a U.S.-based research organization said yesterday.
In its latest report, the Center for Nonproliferation Studies (CNS), headquartered in Monterey, California, said North Korea’s missile program appears to be under the command and control of its air force, not the army, an arrangement similar to Iran, which is believed to be buying missiles from the communist regime, according to the Yonhap News Agency in Seoul.

The report, called “CNS Resources on North Korea’s Ballistic Missile Program,” said that as Western opposition to the deliveries has increased, Pyongyang’s shipments have begun to be made by air rather than by sea, sometimes with the help of Moscow.

“Insome instances, this has been accomplished with private-sector Russian assistance, thereby calling into question the Russian government’s ability and/or willingness to control North Korea’s missile proliferation,” said the report.

The CNS Web site says the report was updated Aug. 11 this year.

North Korea also resorted to selling missile components and production equipment to clients, which include Iran, Pakistan and Syria, the report said.

“These changes will allow more rapid shipping deliveries, and interception of such shipments will become more difficult,” it said.

The CNS noted with interest that North Korea’s ballistic missiles appear to be under air force, not army, command and control.

It was Gen. Jo Myong-rok, then commander of the North Korean Air Force, who led a delegation to Iran in February 1994 to discuss testing of the Rodong missile in Iran, the report said.

“It should also be noted that Iranian ballistic missiles fall under the command and control of the air wing of the Iranian Revolutionary Guard Corps,” it said.

North Korea’s missile program came under renewed scrutiny after the secretive regime test-fired seven missiles last month, ranging from versions of its short-range Rodong to its long-rang Taepodong presumed to be able to strike the U.S. west coast.

The CNS said that while the test launches suggest advances in North Korea’s missile capabilities, there are still several technical hurdles before the long-range versions can be fielded.

“The developmental leaps to successful multiple stage systems using large rocket motors cannot be achieved without external technological assistance,” it said.

“Some of this assistance is probably being provided by Russian specialists, both in North Korea and Russia,” said the report, due mainly to Moscow’s inability to completely halt the leakage of information.

It added that while the shorter-range Rodong missiles are operational, since it has exported some to Iran, Pakistan and other nations, “it may not have enough missiles to field a full brigade.”

Posted in Arms shipment, Russia | Comments Closed

Inter-Korean trade tops US$600 mln until July

Sunday, August 27th, 2006

Yonhap
8/27/2006

Trade between South and North Korea in the first seven months of this year topped US$600 millio this year due to increasing trade of agricultural products and corporate products, a local trade promotion agency said Sunday.

The inter-Korean trade reached $668 million in the January-July period, up 14.7 percent from a year earlier, according to the Korea International Trade Association (KITA).

Corporate-related trade, including the trading related to inter-Korean industrial complex in Kaesong, increased 31.9 percent to $489 million worth, while non-corporate trade such as government and private aids fell 15.3 percent to $178.5 million.

South Korea sent $446.6 million worth of goods to the North, down 2.2 percent, from the same period last year while the value of products coming to South Korea reached $263.2 million, up 56.8 percent, the association said.

Posted in International trade, South Korea, Trade Statistics | Comments Closed

China reduces oil shipment to N.Korea

Saturday, August 26th, 2006

From ABC News:
Burt Herman

China has reduced shipments of crude oil to North Korea, apparently in response to Pyongyang’s missile tests, a news report said Saturday.

China, the communist North’s closest ally and key provider of oil, also has agreed with South Korea to cooperate to prevent a possible North Korean nuclear test.

South Korea’s Chosun Ilbo newspaper said China has reduced “a significant amount” of its oil supplies to Pyongyang since the July 5 missile launches.

The report cited unnamed officials at an oil storage terminal near the Chinese border city of Dandong.

Officials could not be reached for comment Saturday.

There are growing concerns, bolstered by reports of suspicious activity, that Pyongyang may be planning to follow up its missile launches with a nuclear test. Pyongyang claims to have nuclear weapons but hasn’t performed any known test.

Song Min-soon, South Korea’s presidential security adviser, said Saturday that a North Korean nuclear test would be “a grave situation of a different level from missile launches and that South Korea and China have agreed to continue cooperation not to let that situation occur.”

Song, who returned from a two-day trip to Beijing on Friday, refused to elaborate how the two countries would cooperate.

South Korea, China, Japan, Russia and the United States have tried in six-party talks to convince the North to abandon its nuclear program.

South Korea’s seismic authorities said they detected a tremor in North Korea on Friday, but ruled out an underground nuclear test.

Talks on the North’s nuclear program have been stalled since November, when negotiators failed to make headway in implementing the North’s agreement to drop its nuclear program in exchange for aid and security guarantees.

Pyongyang has since refused to attend the six-party talks until Washington stops blacklisting a bank where the North’s regime held accounts, a restriction imposed over alleged counterfeiting and money laundering.

Posted in China, Energy, Oil | Comments Closed

On Searching Hualian Warehouse, a North Korea-China Trade Base in Dandong

Friday, August 25th, 2006

Daily NK
By Shin Joo Hyun
8/25/2006

“No changes to trade after the financial sanctions to North Korea”

In response to North Korea’s illegal trade of currency, the U.S. passed the North Korea sanctions in which China agreed to participate. However, it has been confirmed that little changes have been made to North Korea-China trade.

On 28th July, I went to Dandong, China where North Korea-China trade is most active. It was here that I met a tradesman ‘K’ who said that there has been little change to the amount of goods going from Dandong to Shinuiju. He said that the restraints on trade outlined in the press after the missile launch, is in fact different to reality.

In order to see the amount of trade between North Korea and China for myself, I headed for Hualian warehouse. The size of this warehouse and parking lot is as big as a school playground and numerous cargo trucks were on stand-by to be loaded and shipped.

Goods that pass the route from Dandong to Shinuiju are all contained at this warehouse and then are shipped over the boarder in large cargo containers. It appears that it is a goods warehouse to promote North Korea exports. On the 25th at 3PM, I snuck into the warehouse by a small truck.

On entering the premises ‘K’ who accompanied me to the warehouse did not have to undergo thorough inspection as he was a regular tradesman with North Korea. This location is restricted for foreigners to enter, in particular South Koreans who are unquestionably prohibited from entering the grounds. Undoubtedly photography and collection of data is also prohibited.

While riding the truck we circled the warehouse once and I was able to witness goods busily loaded onto containers. The busiest part of the day is around 1-2PM. At present the height of the day has passed and rather containers sent to Shinuiju customs are visible.

The warehouse seems quiet, maybe because the busiest part of the day has passed. I can see everyday warehouse workers taking orders from drivers and loading goods onto trucks such as sugar, flour and confectionary. On one side are boxes of fans and beer going to North Korea. As always, the majority of goods transported to North Korea is food and clothes.

Amongst the goods, Chinese noodles and clothes with floral prints are most popular. Until recently, the most popular and expensive item was the VCD however it has now become a prohibited import. According to ‘K’ a large warning is written at the entrance of North Korea’s customs house saying ‘Import of VCD’s prohibited.’

‘K’ said “Lately, capitalist ideologies are entering North Korea, hence authorities are trying to destroy republicanism by prohibiting the import of VCD’s. This means we are to watch ‘Bocheonbo Band’ videos made in North Korea, however it’s easier said than done. We are lucky that they have not yet confiscated what we already have.”

To a passing North Korean trade director, ‘K’ asks whether or not a lot of goods were loaded onto containers today. The director replied “There are so many goods that the warehouse is overflowing” and added a snarl remark that “The workers (Chinese staff) are inefficient with their hands” and returned to his truck.

The director had an imposing built body rare for North Koreans. ‘K’ said that although the people of North Korea may be living a hard life, the North Korean people trading here live a relative abundant life. With the image of an imposing director in my mind, I left the warehouse.

Posted in China, International trade | Comments Closed

Japanese news service opens in Pyongyang

Friday, August 25th, 2006

From the Korea Times:

Kyodo to Open Bureau in North

Kyodo News, a major Japanese news agency, has announced that it is to open a bureau in the North Korean capital of Pyongyang on Sept. 1, the Yonhap News Agency reported Friday.

Kyodo is the second company from countries other than China and Russia, North Korea’s allies, to set up a bureau in the communist state.

APTN, a television arm of the U.S. news wire service the Associated Press, opened one in Pyongyang in May.

“Accurately reporting the actual situation in North Korea for readers in and outside Japan is our mission as a media organization,’’ Kenji Goto, Kyodo’s managing editor, was quoted as saying.

Kyodo said there will be no staff permanently stationed in Pyongyang at the beginning, while the North Korean bureau would be concurrently headed by the chief of its Beijing bureau.

“But when the need arises, reporters will be sent to the North to work from the Pyongyang base, which will have locally recruited staff,’’ it said.

Japan has no diplomatic ties with the North while their talks on normalization have come to a standstill amid disputes over North Korea’s kidnapping of Japanese citizens decades ago.

Posted in Communications, Japan | Comments Closed

N. Korea kept millions at Vietnam bank

Thursday, August 24th, 2006

From Kyodo News:

North Korea’s Tanchon Commercial Bank, which has been identified by the United States as the primary financial facilitator of that country’s ballistic missile program, had until recently held dollar and euro accounts at Vietnam’s Military Commercial Bank, a Military Commercial Bank official said recently.

The official said millions of both dollars and euros, respectively, had been deposited in the accounts.

But the funds were hastily transferred to other banks, including a German bank, in July after the State Bank of Vietnam, the country’s central bank, acceded to a U.S. request and began checking on any North Korean accounts involved in suspicious banking transactions.

Tanchon Commercial Bank is among North Korean entities that the United States has since June last year designated as proliferators of missiles and weapons of mass destruction, or their supporters, imposing sanctions aimed at denying them access to the U.S. financial and commercial systems.

The United States is urging other members of the United Nations to identify, track and freeze financial transactions and assets of such North Korean entities as the first step in implementing a binding U.N. Security Council resolution adopted last month.

The unanimous Security Council resolution, which condemned North Korea’s ballistic missile launches in early July, requires all U.N. member nations to prevent the transfer of financial resources that could help North Korea’s missile and WMD programs.

The U.S. Treasury Department identifies Tanchon Commercial Bank as the main financial agent for North Korea’s sales of conventional arms, ballistic missiles, and goods related to the assembly and manufacture of such weapons, which have provided Pyongyang with a significant portion of its export earnings and financially aided its own weapons development and arms-related purchases.

The Pyongyang-based bank held accounts at Macao’s Banco Delta Asia SARL, which the United States in September 2005 subjected to sanctions as a “primary money laundering concern” that had facilitated a range of North Korean illicit activities.

While it was not clear when the funds were deposited in the North Korean accounts at the Vietnam’s Military Commercial Bank, the bank official said they were transferred from a German bank and from the Bank for Foreign Trade of Vietnam, or Vietcombank.

According to sources, financial intelligence authorities of the United States, South Korea and Japan recently compiled a report on North Korea’s overseas bank accounts that singled out 23 accounts in 10 countries, including Russia, deemed suspicious. Among the total, around 10 were in Vietnamese banks.

U.S. Treasury Undersecretary Stuart Levey, responsible for terrorism and financial intelligence issues, visited Vietnam in mid-July and called for Hanoi’s cooperation in investigating and freezing the suspicious North Korean bank accounts.

Posted in Arms shipment, Illicit activities, Tanchon Commercial Bank, Vietnam | Comments Closed

Vietnam closing DPRK accounts

Thursday, August 24th, 2006

from the Joong Ang Daily:

North funds lose havens in sanctions
8/24/2006

Vietnamese banks have closed down North Korean accounts over the past few weeks, most likely forcing Pyongyang to move its money to its last remaining haven, Russia, said Peter Beck, head of the International Crisis Group’s Seoul office, on Tuesday.

Mr. Beck said Nigel Cowie, general manager of North Korea’s Daedong Credit Bank in Pyongyang, e-mailed him last week and said Vietnamese banks have shut down Daedong’s and other North Korea-held accounts.

Daedong expected such a move by Vietnam after U.S. Treasury Undersecretary Stuart Levey visited Hanoi early last month, and had moved its funds elsewhere, Mr. Cowie said in the e-mail. He did not say where the money was moved to, but Mr. Beck said it’s most likely Russia.

“The only financial window [North Koreans] have left now is Russia, I am told,” Mr. Beck said at a roundtable on North Korea hosted by the Mansfield Foundation. Daedong is one of the several North Korean entities accused of shady financial transactions through Macao-based Banco Delta Asia.

The U.S. Treasury in September designated the Macao bank the primary money-laundering concern abetting Pyongyang’s illicit financial activities that it says range from counterfeiting of American currency to drug trafficking, smuggling of contraband and sales of weapons of mass destruction.

North Korea now demands that the United States lift the punitive measures on Banco Delta Asia before it will return to the six-nation nuclear talks.

From Yonhap:

Vietnam already shut down N.K. accounts in past few weeks: ICG Seoul director
8/22/2006

Vietnamese banks have already closed down North Korean accounts over the past few weeks, most likely forcing Pyongyang to move its money to its last remaining haven, Russia, said Peter Beck, head of the International Crisis Group’s Seoul office, on Tuesday.

Beck said Nigel Cowie, general manager of North Korea’s Daedong Credit Bank in Pyongyang, e-mailed him last week and said Vietnamese banks have shut down Daedong’s and other North Korea-held accounts.

Daedong expected such a move by Vietnam after U.S. Treasury Undersecretary Stuart Levey visited Hanoi early last month, and had moved its funds elsewhere, Cowie said in the e-mail.

He did not say where the money was moved to, but Beck said it’s most likely Russia.

“The only financial window they (North Koreans) have left now is Russia, I am told,” Beck said at a roundtable on North Korea hosted by the Mansfield Foundation.

Daedong is one of the several North Korean entities accused of shady financial transactions through Macau-based Banco Delta Asia (BDA).

The U.S. Treasury in September designated BDA the primary money laundering concern abetting Pyongyang’s illicit financial activities that it says range from counterfeiting of American currency to drug trafficking, smuggling of contraband, and sales of weapons of mass destruction.

North Korea now demands that the U.S. lift the punitive measures on the BDA before Pyongyang returns to the six-nation nuclear disarmament talks.

The Treasury’s designation led to a run by BDA clients, and the Macau bank froze US$24 million of funds related to North Korea.

Cowie has said in the past that Daesong’s accounts at BDA were not involved in any illegal activities, that its funds are all from legitimate sources.

“Talking to Cowie and others, he’s led me to conclude that it’s not just $24 million in Macau that North Korea is worried about,” Beck said.

“They are worried that Macau is just one step and means of cracking down on all North Korean financial activities, and Stuart Levey’s visit to Hanoi was clearly designed to further tighten the financial noose and get Vietnam to shut down,” he said.

Vietnamese central bank officials said earlier Tuesday that acting upon Levey’s suggestion, Hanoi has ordered all banks to investigate North Korea-related accounts.

Posted in Banking, Daedong Credit Bank, Finance, Illicit activities, International Governments, Vietnam | Comments Closed

China-DPRK trade Zone II

Wednesday, August 23rd, 2006

Updated from an Earlier Post.

From the Daily NK:

China-N. Korea, Slow Progress in ‘the Tumen River Free Trade Region’ Construction
‘Road-Ports Integrating Plan’ Disappeared… because of Passive Attitude of N. Korea
Han Young Jin, Reporter
8/23/2006

On the 21st, ‘Chizingsbao’, a website related to Chinese investment, reported that the projects to construct ‘the Tumen River Free Trade Region’ and integrate ‘Road-Ports’ have faced problems because of North Korea’s passive attitude.

In the article ‘Slow Progress in N.Korea-China Free Trade Region Construction’, this website illustrated that, “A half year ago, the projects to construct free trade regions for foreign trades in Tomen and integrate “Road-Ports between China and N. Korea” had been hot issues. Yet now nobody talks about them.”

China has ambitiously carried out the project ‘Integrating Road-Ports between China and N. Korea’ that links Najin Port to Hunchun City adjoining three countries North Korea, China and Russia to reinvigorate foreign trades.

In the meanwhile, Tumen City has set up building ‘N. Korea-China Free Trade Regions’ in Rodongja district of Namyang, North Korea.

Cheng Guoli, vice-director of the Department of Temen Commerce, stated that, “We already got an approval to build free trade regions from the government of Jilin. As we know, officials of Onsung district also consented on the free trade region construction and reported to the North Korean government.”

However, he said that, “We have been waiting for a certain action of North Korea, yet until now no progress”.

In the website, Cheng Guoli revealed, “Tumen City will contract the construction of free trade regions to one company,” yet adding “revealing the name of the company is premature”.

Hunchun City also is in the same situation. Donglim Public Economic Trade Corporation promoting the project ‘Road-Ports between China and N. Korea’ revealed that, “We have prepared the construction of the integration, yet North Korea has not taken any actions for that.”

Donglim Public Economic Trade Corporation that was entrusted with the ‘Road-Ports between China and N. Korea’ made a contract with Nasun People’s committee, North Korea last July, and Bosae Public Incorporated Corporation of Hunchun Economic frontier also jointed the construct.

Donglim Public Economic Trade Corporation had set up the Huchun-Najin road construction under the collaboration with Design Center of Hunan University. It was to build a second rank road at 48km in length, yet North Korea did not even start on the construction yet.

Posted in China, International trade, Russia | Comments Closed

Number of N. Koreans defecting to S. Korea increases nearly 60 percent

Wednesday, August 23rd, 2006

Yonhap
Byun Duk-kun
8/23/2006

The number of North Korean defectors coming to South Korea increased by nearly 60 percent in the first seven months of this year compared to the same period of last year, the Unification Ministry said Wednesday.

A total of 1,054 North Koreans have come to the country as of the end of July, up 59 percent from a year ago, the ministry said in a report. Apparently hundreds more are waiting to find their way here, it said.

Earlier reports said a group of 175 North Koreans were rounded up by Thai police on suspicion of illegal immigration Tuesday, only hours before they were to board a passenger jet flying to South Korea.

The chief of the Thai police’s immigration bureau, Lt. Gen. Suwat Tumrongsiskul, was quoted as saying the North Koreans would be prosecuted, but would be detained “on a humanitarian basis” until they leave the country since they are seeking refuge in third countries.

The number of North Koreans coming to the South has steadily increased since the late 1990s with more than 100 finding their way here in 1999 for the first time since the end of 1950-53 Korean War.

The number increased to 1,139, breaking the 1,000 mark for the first time, in 2002, and rose to 1,281 in 2003 and 1,894 a year later.

International relief agencies, however, believe as many as 100,000 North Koreans may still be hiding in other countries, mostly in China, while civic organizations working to help the North Koreans put the number at 300,000 in China alone.

With no relatives or jobs in China, most of the North Korean defectors live in extreme destitution, usually making a living by begging. The Chinese government refuses to recognize them as refugees and regularly rounds them up and sends them back to their communist homeland where they are reportedly tortured, prosecuted and often executed.

The South Korean government says it will accept any North Koreans coming to the country, but cannot encourage or support their defection because of its relations with the North, as well as with other countries, which are used as stopovers for North Korean defectors.

Beijing is bound by a written agreement with Pyongyang to repatriate any North Koreans in its custody, according to government officials.

North and South Korea remain divided along a heavily-fortified border since the fratricidal Korean War (1950-53).

Defection through the inter-Korean border is not unprecedented, but is nearly impossible with nearly 70 percent of some 1.8 million troops on both sides standing guard within a radius of a few kilometers from the border.

Relations between the divided Koreas significantly warmed up following a historic meeting of their leaders in the North Korean capital in 2000.

The two, however, still remain technically in a state of war as the Korean War ended with an armistice agreement, not a peace treaty.

Posted in Emigration, South Korea, Thailand | Comments Closed

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