North Korean Economy Watch

Pictured above (Google Earth): The Chongryon headquarters building in Tokyo ( 35.697001°, 139.743435°).

UPDATE 10 (2105-2-11): According to the Japan Times, the Chongryun building is still under control of the DPRK, even after it was sold:

The building and the land it stands on are mortgaged to a Chongryon-affiliated company on whose board sit a former member of the Supreme People’s Assembly of North Korea and a former president of Korea News Service, a North Korean news agency, people familiar with the situation said.

Records show ownership of the building and land was transferred to a real estate firm in Sakata, Yamagata Prefecture, on Jan. 28 from a real estate company in Takamatsu, Kagawa Prefecture, which place the successful auction bid.

The fact that the property is mortgaged to a Chongryon-affiliated company suggests the organization played a role in shifting ownership to the Sakata real estate firm, people close to Japanese public security authorities said.

The Sakata real estate firm is expected to lease the property to Chongryon so that it can continue using the building, informed sources said.

UPDATE 9 (2015-2-6): According to the South China Morning Post, there is a new fog of suspicion that has set over the former Chongryun headquarters:

A former Chinese diplomat once named as a spy in Japan’s parliament has business links to an obscure firm that has purchased the de facto North Korean embassy in Tokyo.

Wang Xinghu, who was previously stationed at the Chinese embassy but claims to have become a businessman, has set up a consultancy called HKS Japan with Takeharu Inamura, a Japanese national, according to records seen by the South China Morning Post.

It emerged last week that Inamura’s other company, a small warehousing firm that is called Green Forest, paid ¥4.4 billion (HK$290.7 million) to buy Pyongyang’s biggest asset in Japan, the headquarters of the quasi-official Chongryon organisation.

But Green Forest has limited resources and experience in the property sector, and questions are being asked about where the firm acquired the cash.

Chongryon’s imposing headquarters was initially put up for auction in 2012 at the request of the Japanese government’s debt collection agency after the association for North Korean residents of Japan defaulted on debts of more than ¥62 billion.

After two initial attempts to purchase the building fell through – one by a religious group with links to an organised crime gang with North Korean members and the second a shell company based in Mongolia but with no assets and no traceable history – the property was sold last year to Marunaka Holdings, a Japanese construction company.

After paying ¥2.21 billion for the building and demanding that Chongryon vacate it so the plot could be redeveloped, Marunaka suddenly changed its mind and sold the property – for ¥4.4 billion and a swift profit – to Inamura’s company, which is based in rural Yamagata Prefecture, has no history or licence to operate in the real-estate sector. Its annual turnover is a paltry ¥19 million.

In corporate documents, Chongryon is now listed as the mortgagee and will be allowed to remain in the property. The sale took place on January 28.

Phone calls to the offices of both HKS Japan and Green Forest were not answered. Local media have reported that Inamura lives in a small rented apartment in Tokyo’s Nakano district, but the curtains have remained drawn and the lights off since the deal was revealed.

Wang – who was named by Japanese politician Katsuei Hirasawa in the Diet in July 2012 as a Chinese spy – is apparently out of the country. Hirasawa is a former official of the Japanese police whose responsibilities primarily focused on foreign intelligence issues. At the time Hirasawa made his allegations, the Sankei Shimbun reported Wang was a member of to China’s Ministry of State Security.

Chongryon is also refusing to talk to the Post.

A Japanese human rights activist who is demanding that more international pressure be applied to the North Korean regime says he believed China was involved in the transaction.

“Wang cannot fund the Chongryon headquarters deal without the consent and financing of the Chinese government,” claimed Ken Kato, director of Human Rights in Asia and a member of the International Coalition to Stop Crimes Against Humanity in North Korea.

“It is a mystery why China has decided to spend billions of yen to save Chongryon’s face,” he added. “I am sure that China understands that once their involvement in the deal is revealed, it will anger the Japanese public.

“The Chongryon HQ was sold not because of ‘discrimination’ or ‘persecution,’ as they are insisting,” he added. “It was sold because they refused to pay back a debt that Japanese taxpayers were forced to shoulder.”

Kato is indignant North Korea is refusing to honour its debts in Japan despite spending vast sums on nuclear and ballistic missile programmes.

There have been several years of friction between China and erstwhile ally North Korea, and if Beijing funded the purchase of the building, it could be a sign that China wants to get the relationship back on track.

Beijing was angered when Pyongyang ignored its pressure to not go ahead with a third underground nuclear test in 2013 and, subsequently, a series of missile test-launches.

Since Beijing got tough on the regime of Kim Jong-un – including halting all supplies of fuel oil – North Korea turned its attentions to Russia and has been busily courting its new ally. Moscow and Pyongyang have agreed to carry out a series of military drills this year, major Russian investment in North Korean infrastructure is under way, and Kim has reportedly accepted an invitation to attend a ceremony marking the end of the second world war in Moscow in May.

UPDATE 8 (2014-11-7): Chongryun has lost its appeal for the forced sale of its Tokyo headquarters. According to a media report:

Chongryun, the association that represents North Korean residents of Japan, is running out of ways to keep its most prized asset after the Supreme Court ruled that the sale of its headquarters to a Japanese real estate developer would go ahead.

The dismissal of the appeal by Chongryun represents “a serious loss of face” for the organisation and the North Korean leadership, according to analysts, and could even serve to weaken links between the regime’s citizens in Japan and their homeland.

“They have not made any official comments yet but it is clear that this will be a major disappointment because it is such a serious loss of face,” Ken Kato, a Tokyo-based human rights activist, said.

“I also hope that North Koreans living in Japan … are able to stand up against the regime. Many of them have relatives in North Korea and they are effectively held as hostages to ensure that the people here send back ‘donations’ that are then spent on developing missiles and nuclear weapons,” Kato said. “I hope they wake up to the reality.”

Representatives of Chongryun could not be contacted but sources said last month that retaining a building that served as an embassy in Japan had been made a priority by North Korean leader Kim Jong-un.

Chongryun leader Ho Jong-man visited North Korea for the first time in eight years in October and, although he was not able to meet him in person, was handed a personal letter from Kim.

One of the instructions in the letter was to secure the continued use of the Chongryun headquarters in Tokyo.

The Supreme Court’s decision makes that target effectively impossible and will not go down well in Pyongyang.

The legal decision is in favour of Marunaka Holdings, which had lodged a bid of 2.21 billion yen (HK$149.5 million) for the building and the prime 2,387 square metre plot that it occupies in Chiyoda Ward.

Moves to sell the building began in March after the government-backed Resolution and Collection called in loans amounting to more than 62 billion yen that it had extended to the residents’ association.

Chongryun initially attempted to sell the property to a Kagoshima-based religious order that would permit the organisation to remain in residence. It was later alleged that the temple had links to underworld groups. The deal fell through when the temple was unable to raise the funds.

The next bidder was a mysterious Mongolian company known as Avar that was using an address in Ulan Bator but had no presence at the building and had never previously purchased a property in Japan.

Analysts believe it was a front for the North Korean government. That transaction was blocked by authorities in Japan for a lack of transparency, triggering a third round of bidding.

UPDATE 7 (2014-4-11): DPRK claims to send funds to Chongryun. According to KCNA:

Kim Jong Un Sends Educational Aid Fund and Stipends to Children of Koreans in Japan

Pyongyang, April 11 (KCNA) — Supreme leader Kim Jong Un sent educational aid fund and stipends amounting to 207.8 million yen to the General Association of Korean Residents in Japan for the democratic national education of children of Koreans in Japan on the occasion of the 102nd birth anniversary of President Kim Il Sung.

The educational aid fund and stipends sent by Generalissimos Kim Il Sung and Kim Jong Il and Marshal Kim Jong Un in 160 installments total 47,331,150,390 yen.

Since the Mangyongbong-92 is no longer traveling the East Sea/Sea of Japan, I wonder how the funds will be transferred.

The Chongryun have seen bad financial news lately:

1. Chongryun headquarters in central Tokyo was recently auctioned off for debts incurred helping the DPRK get through the Arduous March.

2. Chongryon schools are not eligible for some Japanese education subsidies.

UPDATE 6 (2014-3-29): KCNA reports (surprise!) that the DPRK is not happy about the sale of the Chongryun headquarters building. Below are two related articles:

Japanese Authorities Warned of Their Moves to Seize Korean Hall of Chongryon

Pyongyang, March 29 (KCNA) — The Committee for Aiding Overseas Compatriots of Korea made public a statement on Friday denouncing the Japanese authorities for their extremely dangerous moves to stifle the General Association of Korean Residents in Japan (Chongryon) and Koreans in Japan.

On March 24 the Japanese authorities took such fascist action as instigating the Tokyo District Court to make an illegal decision to allow the sale of the land and building of the Korean Hall of Chongryon.

This is a wanton violation of the dignity and existence right of Chongryon and Koreans in Japan and a grave infringement upon the sovereignty of the DPRK, the statement said, adding:

The Japanese authorities are feigning ignorance of the fact, noting that the decision was made by a “judiciary organ” in a bid to evade the blame for seizing the Korean hall. But this is no more than an excuse to cover up their sinister criminal purpose.

It is their sinister political scenario to deprive the Central Standing Committee of Chongryon of the base of its activities and thus weaken the authority of Chongryon, a model of Juche-based overseas Koreans’ movement, and dampen the elated patriotic enthusiasm of Koreans so as to stamp out the movement of Koreans in Japan.

The statement went on:

Now that the Japanese authorities deliberately touched off distrust at a time when confidence-building is required for improving the DPRK-Japan relations more urgently than ever before the DPRK is compelled to take corresponding measures.

If the Japanese authorities persist in their moves to seize the Korean Hall despite the warning of the DPRK, they will be wholly responsible for the consequences to be entailed by them.

Illegal Decision of Tokyo District Court Slammed

Pyongyang, March 29 (KCNA) — The Tokyo District Court made a decision to allow the sale of the land and building of the Korean Hall of the General Association of Korean Residents in Japan (Chongryon) under the backstage wire-pulling of the Japanese authorities. The spokesman for the Democratic Lawyers Association of Korea Saturday released a statement disclosing the illegality of the decision.

The statement says:

The illegality of the decision finds its vivid manifestation in that the court selected a disqualified company as a successful bidder by fraud and swindle.

The Tokyo District Court had delayed the announcement of the results of auction of the Korean Hall of Chongryon, which was made in October of 2013. On March 20, it reopened the tenders for it for no reason all of a sudden and made the decision to allow the sale to the Marunaka Holdings Co. Ltd., Japan.

As far as the above-said company is concerned, it had already been disqualified as it underbid others in October last year and took back bid bond from the court.

In particular, it is a precedent of the Japanese courts that in case the relevant court returned the bid bond to a disqualified company it would not make a decision to allow the sale to it.

Therefore, it was a crude violation of the law in every aspect that the court chose the above-said company as a successful bidder.

The illegality of the decision of the Tokyo District Court is also evidenced by the double-dealing attitude of the Resolution and Collection Corporation, a creditor.

When the issue of the Korean Hall presented itself, the Corporation made a hostile and discriminating demand that Chongryon should repay a total amount plus interest though it has settled issues with other debtors in a friendly manner.

But the Corporation kept mum about the decision of the Tokyo District Court to sell the Korean Hall at a price less than half the actual one.

The Japanese authorities has long regarded the Korean Hall of Chongryon on which the flag of the DPRK is fluttering as a thorn in their flesh and run the whole gamut of plots to seize it.

That was why the Tokyo District Court staged an unprecedented farce in disregard of the Japanese law, precedents of the courts and practices of the basic procedures for tenders

The Democratic Lawyers Association of Korea categorically rejects the decision of the Tokyo District Court and declares internally and externally that the illegal decision is invalid, the statement says.

The Japanese authorities had better halt their moves to seize the Korean Hall, though belatedly, if it thinks of its face as a “law-governed state” even a bit and has real intention to improve the relations with the DPRK, the statement concludes.

UPDATE 5 (2014-3-24): A Japanese estate agency has been approved to buy the property. According to  NTD:

A court ruled Monday that a Japanese estate agency could buy the Tokyo property that serves as North Korea’s de facto embassy, after an earlier bid fell through.

The decision from the Tokyo District Court drew an immediate and angry reaction from Chongryon, the organisation that represents North Korean interests in Japan in the absence of diplomatic ties.

“This is an unfair decision. We cannot accept it,” said an organisation spokesman, adding that an appeal would be lodged.

The site — a 2,390-square-metre (25,725-square-feet) plot and 10-storey building occupied by Chongryon — was put up for auction after it was seized by authorities over unpaid debts.

Monday’s ruling gave real estate firm Marunaka Holdings the right to buy the building for 2.21 billion yen ($22 million), after a winning bid from an obscure Mongolia-registered company fell apart.

The Avar Limited Liability Company had won an auction in October with a bid of 5.01 billion yen, beating Marunaka’s offer. But the court disqualified the offer several months later reportedly due to flawed documentation amid questions over whether the firm had links to Pyongyang.

Japanese law bars an organisation forced to sell assets from taking part in an auction of them.

The Japanese firm is planning to remove the North Korean-linked organisation from the property, reports said, but it was unclear if it still planned to go through with the purchase following the judgement.

Hundreds of thousands of ethnic Koreans live in Japan, mostly a legacy of those who emigrated or were forced to move to Japan during its 1910-1945 colonial rule of the Korean peninsula.

About 10 percent are believed to be affiliated with Chongryon, which charges that the community is persecuted by authorities and harassed by right-wing activists.

UPDATE 4 (2014-1-23): NK News reports that the mysterious Mongolian firm has been blocked from purchasing the former headquarters building.

A Japanese court has blocked a Mongolia-based company’s bid to buy the Tokyo headquarters of the main pro-North Korea organization in Japan, Chongryon.

After months of screening, the Tokyo District Court announced on Thursday that due to purchase irregularities it would not allow the Ulan Bator-based Avar Limited Liability Company to purchase the property, which still serves as the headquarters for Japan’s main pro-North Korea organization.

The Mongolian firm, which had previously won an October 2013 auction for the building with a 5.01 billion yen (U.S. $48 million bid) bid, was rejected by the court because a certificate it submitted to support the purchase appeared to be a color photocopy and did not bear the official seal of the Mongolian government.

“It is a company on paper,” Hideshi Takesada, an expert on regional security at Takushoku University in Tokyo, told NK News on Thursday.

“With the bid tendering highly unlikely to be successful, Chongryon will be able to stay at the headquarters building and use the land. In a sense, the Japanese government is doing a favor for North Korea,” Takesada said. Takesada is a former executive director of the National Institute for Defense Studies in Tokyo, the Japanese Ministry of Defense’s think-tank.

UPDATE 3 (2013-10-22): Apparently funding fell through for the Buddhist group, and the building was put up for sale again. A Mongolian firm stepped forward to buy the building, but this was halted over fears that the new firm was a front for North Korean interests. According to the South China Morning Post:

The Tokyo District Court acted yesterday in response to a petition for an injunction on the sale filed by Ken Kato, director of Human Rights in Asia. Kato’s request pointed out that would-be buyer Avar was registered at an address in Ulan Bator, but the company apparently had no presence there.

When a Japanese television team arrived at the Mongolian address to ask about the purchase of the 10-storey building that is now occupied by Chongryon, the organisation that represents North Korean residents of Japan, and the prime plot it occupies in Chiyoda Ward, they were met by a bemused woman.

She told the TV crew her family had been living in the apartment for seven years and had never heard of Avar.

“I told the court that this was a typical case of money laundering and that the court cannot permit the transaction to go ahead,” Kato told the South China Morning Post. “The address is fake and the registration of the company must therefore be illegal.”

No deadline has been set for the court to make a decision on whether the transaction will go ahead, but Kato is confident any investigation will lead back to the North Korean leader. “Kim Jong-un wants to save face and not lose this property and I’m sure the decision to pay more than the market value is a case of a dictator’s whim,” he said.

The minimum price for bidders for the property was set at 2.13 billion yen (HK$168 million), while a previous deal to buy the building in May for 4.52 billion yen fell through when the buyer, the chief priest of Saifukuji Temple, was unable to raise the funds by the deadline. Kato said it was therefore curious that the latest sale price was 5.01 billion yen.

“The buyer could have got it for a lot less than that and I believe they offered so much in the hope no answers would be asked and the real purchaser could remain anonymous,” he said.

That was always likely to be a vain hope, given the interest in the property, which was put on the market in March by the government-backed Resolution and Collection Corp. in an effort to recoup loans of 62 billion yen that it extended to the residents’ association after the collapse of a number of financial institutions for North Korean residents of Japan.

The involvement of a Mongolian firm also raised eyebrows in Japan, as no Mongolian firm has ever purchased a building in Tokyo and there are very few Mongolian companies with enough cash to carry out such a deal.

As well as the suggestion that Avar is a front company for the North Korean regime, there has also been speculation that the Mongolian government might be involved as part of the burgeoning relationship between the two regimes.

UPDATE 2 (2013-3-27): A Buddhist order on good terms with the Chongryun won the property auction and will allow the Chongryun to remain on the premises.  According to the Japan Times:

The Kagoshima temple offered ¥4.5 billion, the highest among four bidders, to acquire the land and the Chongryon building.

“We will keep the building as it is and make it a base of harmony among ethnic groups in Asia, including North Korea,” said Saifuku Temple leader Ekan Ikeguchi.

“The function of our headquarters will be maintained for the time being, at least,” a Chongryon official said. “We feel relieved.”

The government-backed Resolution and Collection Corp. put the premises out to tender to recoup loans of about ¥62.7 billion it made to Chongryon.

UPDATE 1 (2013-3-13): The Wall Street Journal’s Japan Real Time reports that the auction has finally begun on the Chongryun’s headquarters building in central Tokyo. According to the article:

Bidding has begun for the repossessed central headquarters of the General Association of Korean Residents in Japan, North Korea’s de-facto embassy in the country. It’s an attempt by the Japanese government to get back some of the ¥62.7 billion owed by the pro-Pyongyang group, also known as Chongryon, and comes as the reclusive regime faces a new round of sanctions and international condemnation following its third nuclear test.

Built in 1986, the 10-story office building has two basement floors and is situated on a 2,390 square-meter piece of land in a prime location in central Tokyo. The Tokyo District Court said in its assessment of the building that some portions of it showed signs of age-related deterioration as well as damage incurred during the massive 2011 earthquake that shook northeastern Japan.

Analysts say that as the auctioneer’s hammer falls, so falls the fortunes of the once-influential group.

“Losing its central headquarters is symbolic of Chongryon’s decline,” said Hajime Izumi, Professor of International Relations at Shizuoka University. “While the organization will survive, I expect it to face increasing difficulty maintaining itself,” he said.

Founded in 1955 as an organization representing the pro-North Korean members of Japan’s ethnic Korean minority, Chongryon has been responsible for pumping out North Korean propaganda and has been operating banks, a newspaper and numerous schools for Korean residents in Japan.

The group has also been a reliable source of hard cash for Pyongyang, with members sending back a large portion of revenue accumulated through numerous “pachinko” gambling parlors and real-estate businesses operated across the nation.

But Yoshifu Arita, an upper house lawmaker in Japan’s parliament, said the organization faced severe head-winds in 2002 when the late Kim Jong Il admitted during a meeting with then-Prime Minister Junichiro Koizumi that North Korean agents had kidnapped Japanese nationals in the 1970s and 1980s.

“This led to a massive public backlash toward North Korea as well the organization,” he said. “It led to many disillusioned members leaving Chongryon as pressure on them mounted.”

Chongryon’s debt stems from a network of credit unions for pro-North Korean residents of Japan that collapsed and had to be bailed out by the government-backed Resolution and Collection Corporation in the late 1990s and early 2000s. The debt has been transferred to Chongryon, which has been sued by the RCC for repayment.

A 72-year-old South Korean businessman living in Kobe, who used to be affiliated with Chongryon, added that the younger generation of Koreans in Japan also felt less of a link and patriotism toward Pyongyang. And with Japan’s long economic malaise following the burst of its debt bubble in the early 1990s, “pro-Pyongyang supporters don’t have the cash or the will to lend a hand to the organization, even when its headquarters are about to be sold off,” added the businessman, who asked not to be identified.

Bids for the building, which began Tuesday, will be accepted through March 19. The winner of the auction, which Chongryon cannot participate in, is expected to be decided on March 29.

ORIGINAL POST (2012-7-26): The Atlantic has a great piece on recent developments with the General Association of Koreans in Japan (Chongryon or Chosen Soren):

In late June, a Japanese court ordered Chongryon, a business, education, and banking organization formally representing pro-North Korean members of Japan’s ethnic Korean minority, to auction off its ten-story office building in downtown Tokyo, effectively ending its mission of bringing money into North Korea and pushing propaganda out. The group’s problems are essentially financial: Chongryon owes the Japanese government nearly $750 million for a late-90s emergency bailout that rescued the group’s network of credit unions, which were rapidly de-capitalized because of remittances to North Korea during the country’s devastating mid-90s famine, an economic and humanitarian catastrophe that killed up to 2 million people.

As with just about anything regarding North Korea, even the surface-level truth belies deeper and darker realities. If it weren’t for the chronic economic crisis and resulting famine that gripped North Korea in the 1990s, as well as a rising anti-North Korean strain in Japanese politics, then the criminal enterprises, communal bonds, and official connections that made Chongryon such a formidable political and cultural organization may well have remained intact. It took economic collapse, regional crisis, and domestic political upheaval to bring Chongryon to its knees.

North Korea has no official embassy in Japan, so the Pyongyang-linked Chongryon acts as an unofficial representative of a government that has kidnapped Japanese citizens and fired long-range missiles in the island nation’s direction. It runs banks, a newspaper, dozens of schools, and a university named after Kim Il Sung, North Korea’s “eternal leader” and the current despot’s grandfather. In the 1980s, Chongryon’s business and criminal enterprises, which included off-book pachinko parlors, pubs, prostitution rings, and real estate, reportedly produced over a billion dollars a year in revenue — much of which, according to Michael J. Green of the Center for Strategic and International Studies, was sent back to Pyongyang. As late as 1990, its banking system was capitalized to the tune of $25 billion.

Because North Korea has few exports and is under severe international sanctions, unofficial currency-gathering enterprises like this one can be crucial. And the group also serves as a propaganda outlet, pushing out the DPRK party line to ethnic Koreans. It would be unimaginable for North Korea to own a K-Street high-rise, and South Korea officially bans any expression of support for its northern neighbor. But Japan has allowed its enemy’s outpost to remain, and even thrive.

The full story is well worth reading here.

Here are previous posts on the Chongryon including a post from 2010 when the Japanese Supreme Court ruled that the headquarters could be seized.

According to the UN World Food Program:

On the occasion of World Food Day (16 October), WFP has opened a new factory to produce nutritious biscuits in DPR Korea. Fortified foods, produced in 14 factories all over the country, are the backbone of WFP’s efforts to address undernutririon and fight hunger in the country for some 1.6 million women and children every month.

Speaking at the opening ceremony, Country Director Dierk Stegen said: “WFP is committed to fighting hunger worldwide. In DPRK, we work in close partnership with the government to reduce hunger and undernutrition in young children and their mothers by providing locally produced foods that are enriched with vitamins and minterals.”

Improved Efficiency

The Pyongsong Biscuit Production Line is replacing an existing biscuit factory in Haeju, as the equipment of that production line has become too old and too costly to replace. The Pyongsong Factory is strategically located, with a railway connection to Nampo port and easier access to nearby counties. The new factory will improve production efficiency, save transport costs and minimize the transport time of delivering the nutritious biscuits to 231,000 children at nurseries, kindergartens and schools in 12 counties.

Government Partnership

WFP and the Government of DPR Korea have been working together to produce nutritious foods enriched with vitamins and minerals in country since 1998. The Government contributes the factory infrastructure, staff support, and maintenance, utilities and overhead costs associated with the production, while WFP provides raw materials, spare parts, technical training and oversight of production and distribution.

Funding Needs

The Pyongson Biscuit Factory has the capacity to produce up to 294 metric tons of fortified biscuits every month – but this is dependent on contributions from donors. Currently, funding levels are such that production will cease at the end of February. For the next 12 months WFP needs to source US$80million to continue its work to provide assistance to the most vulnerable children and women in DPK Korea.

According to the UN WFP web page:

A new factory in Pyongson [sic] City brings to 14 the total number of facilities producing fortified foods for WFP programmes in DPR Korea.

On the occasion of World Food Day (16 October), WFP has opened a new factory to produce nutritious biscuits in DPR Korea. Fortified foods, produced in 14 factories all over the country, are the backbone of WFP’s efforts to address undernutririon and fight hunger in the country for some 1.6 million women and children every month.

Speaking at the opening ceremony, Country Director Dierk Stegen said: “WFP is committed to fighting hunger worldwide. In DPRK, we work in close partnership with the government to reduce hunger and undernutrition in young children and their mothers by providing locally produced foods that are enriched with vitamins and minterals.”

Improved Efficiency
The Pyongsong Biscuit Production Line is replacing an existing biscuit factory in Haeju, as the equipment of that production line has become too old and too costly to replace. The Pyongsong Factory is strategically located, with a railway connection to Nampo port and easier access to nearby counties. The new factory will improve production efficiency, save transport costs and minimize the transport time of delivering the nutritious biscuits to 231,000 children at nurseries, kindergartens and schools in 12 counties.

Government Partnership
WFP and the Government of DPR Korea have been working together to produce nutritious foods enriched with vitamins and minerals in country since 1998. The Government contributes the factory infrastructure, staff support, and maintenance, utilities and overhead costs associated with the production, while WFP provides raw materials, spare parts, technical training and oversight of production and distribution.

Funding Needs
The Pyongson Biscuit Factory has the capacity to produce up to 294 metric tons of fortified biscuits every month – but this is dependent on contributions from donors. Currently, funding levels are such that production will cease at the end of February. For the next 12 months WFP needs to source US$80million to continue its work to provide assistance to the most vulnerable children and women in DPK Korea.

Story submitted by Liu Xuerong, Head of Programme, WFP DPRK

According to the Asahi Shimbun:

China is holding petroleum that was heading to North Korea from Iran in an apparent attempt by Beijing to maintain its control over Pyongyang, sources said.

According to Chinese sources, the petroleum was part of North Korea’s contract to import about 500,000 tons of condensate, a light oil, from Iran. North Korea, seeking to diversify its energy sources, started discussions on the deal last year.

The agreement was reached with the cooperation of a major Chinese state-run petroleum company.

The condensate is believed to have been shipped from Iran over a number of occasions on tankers registered to a third nation. But Chinese authorities ordered the tankers to stop when they reached the Chinese coast in the Yellow Sea this spring.

The ships were then towed to ports in Dalian, Liaoning province, and Qingdao, Shandong province. Sources said the condensate remains in those ports, which have restricted access to outsiders.

China is believed to have asked North Korea to pay about $2 million (about 196 million yen) for storage expenses.

“Once China realized that North Korea was beginning to depend on Iran for petroleum, China began using various measures to remain engaged so it can maintain its influence over North Korea,” a diplomatic source knowledgeable about relations between China and North Korea said.

Under the North Korea-Iran contract, Pyongyang is to pay Tehran for the condensate, but the condensate itself must be first sent to a Chinese state-run petroleum company.

“Because North Korea does not have the most advanced refineries, it had to ask China to refine the condensate,” a source in the petroleum industry said.

It is unclear what legal basis China is using for holding up the shipments because condensate and other petroleum products needed for daily living are not banned under U.N. economic sanctions imposed against North Korea.

However, one source involved in the transaction said, “As part of the economic sanctions that were imposed against military actions taken by North Korea, inspections were carried out by Chinese authorities, which asked that the petroleum be kept at the port.”

…

Until now, China is said to have provided about 80 percent of the petroleum used in North Korea. The main means of transport were through a pipeline that runs along the Yalu River between the border of the two nations as well as by ship.

According to Chinese customs statistics, the export volume was about 520,000 tons a year.

…

“Not only has a ban on petroleum export shipments been imposed by China, but the total import volume through the pipeline has also been reduced to one-third the level of the same period of the previous year,” a source involved in trade between China and North Korea was told by a North Korean government source in September.

China remains North Korea’s biggest backer, even with the contract with Iran.

Read the full story here:
China holding up shipment of Iranian petroleum to North Korea
Asahi Shimbun
Koichiro Ishida
2013-10-20

Pictured above (Google Earth): The Hyesan – Jilin Bridge

According to Radio Free Asia:

A bridge across the Yalu River connecting northeastern North Korea with China has reopened after more than four months of repairs and reinforcement work, reviving trade and tourism in the area, sources in North Korea said.

Traders eager to sell their goods lined up on both sides of the bridge between Hyesan city in North Korea’s Ryanggang province and Changbai city in China’s Jilin province as traffic resumed on Thursday.

The 500-foot (150-meter) bridge, initially built in 1936 by the Japanese and renovated in 1985, has been reinforced to accommodate trucks weighing up to 30 tons, double the earlier limit.

It had been closed since May, blocking trade and sending prices of consumer goods soaring at local markets in Hyesan, a source in Ryanggang province said.

Thursday’s reopening of the bridge, one of at least three spanning the Yalu River, took place on the anniversary of the ruling North Korean Workers’ Party without much fanfare, the source said, speaking on condition of anonymity.

“The Yalu River Friendship Bridge reopened officially at 10:00 a.m…. There was no special event or meeting for an opening ceremony,” the source told RFA’s Korean Service.

Another source in the province speaking on condition of anonymity said vehicles bound for China loaded with logs and minerals had lined up near the bridge early that morning in anticipation of a rumored reopening.

On the other side of the river in Changbai, trucks carrying Chinese food items and daily necessities had queued up to cross into North Korea, the source said.

The bridge is also a key gateway for Chinese tourists traveling to North Korea’s famed Mount Baekdu, a popular sightseeing destination.

During the bridge’s closure, local authorities in Ryanggang had lost valuable foreign exchange earnings because tours to the mountain had been limited and export of logs and minerals had stopped.

Sources said that although many locals were relieved that trade would be resumed with the bridge no longer closed, others were concerned about the possibility of a sudden outflow of exports of local resources and goods across to China.

A more popular bridge along the Yalu River lies between China’s Dandong city and North Korea’s Sinuiju city.

Annual trade between North Korea and China, its closest diplomatic and trade ally, is worth about U.S. $6 billion. China also supplies nearly all of North Korea’s energy needs.

Read the full story here:
Bridge Across China-North Korea Border River Reopened
Radio Free Asia
2013-10-14

According to Yonhap:

According to Rep. Yoon Sang-hyun of the ruling Saenuri Party, imports of luxury goods reached US$645.8 million last year, up sharply from an annual import average of around $300 million tallied under the current leader’s father Kim Jong-il.

…

Citing data provided by the government ahead of the parliamentary audit on the Ministry of Unification, the lawmaker said the isolationist country imported such non-essential goods as pets, feed for such animals, and various European and U.S.-made bath, sauna and maternity products.

The report also showed a noticeable rise in imports of expensive musical instruments, cosmetic goods, handbags, leather products, watches, and mid-sized sedans made in Japan and China.

“The products were given as gifts to key figures in North Korean society to ensure their loyalty to the regime,” Yoon said. He claimed that handing out such gifts contrasted with the hardships felt by ordinary people.

The United Nations Food and Agriculture Organization said earlier in the month that North Korea remains one of the 34 countries in the world that require external assistance to properly feed their people.

It estimated that some 2.8 million “vulnerable” people in the communist country needed outside assistance at least until this year’s fall harvest.

The Saenuri lawmaker said that imports of wine, liquor, consumer electronics, fur products and expensive watches led the growth last year.

Imports of alcoholic beverages surpassed the $30 million mark, with electronics and watches reaching $37 million and $8.2 million, respectively, for the whole of last year, he said.

Read the full story here:
N. Korea’s luxury goods imports surge under Kim Jong-un leadership
Yonhap
2013-10-14

UPDATE 1 (2013-10-15): Yonhap reports on the activities carried out at the expo:

North Korean companies participating in an annual trade fair with China signed a total of 93 preliminary deals worth US$1.6 billion at the event, China’s state media reported Tuesday.

North Korea and its economic lifeline, China, wrapped up the trade expo, the second of its kind, on Monday in the Chinese border city of Dandong with some 130 North Korean firms attending the five-day exhibition.

The North Korea-China Economic, Trade, Culture and Tourism Expo came as China has been deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.

During the trade fair, preliminary investment deals worth $510 million and export deals worth $1.09 billion were signed, the official China News Service reported.

North Korea and China held the inaugural trade fair last year, with $1.26 billion worth of preliminary deals signed.

In the first eight months of this year, two-way trade between North Korea and China stood at $4.09 billion, compared with $4.1 billion for the same period last year, South Korean government data showed.

ORIGINAL POST (2013-10-10): According to Yonhap:

An annual trade fair between North Korea and China kicked off in the Chinese border city of Dandong on Thursday, with some 130 North Korean firms attending the five-day exhibition, organizers said.

The North Korea-China Economic, Trade, Culture and Tourism Expo, the second of its kind, comes as China is deepening its economic ties with the North even though Beijing appears to have become increasingly frustrated with Pyongyang’s nuclear weapons program.

About 500 North Koreans, including a 115-member propaganda troupe, joined the exhibition that features 700 booths for products ranging from foods and garments to mining and machinery equipment, according to the China Council for the Promotion of International Trade (CCPIT), which organized the event.

Of the booths, about 200 were allocated to buyers from Pakistan, Malaysia, India, Russia, Hong Kong and Taiwan, a Dandong branch of the CCPIT said.

North Korea and China held the inaugural trade fair last year, with US$1.26 billion worth of preliminary deals signed.

According to Xinhua:

The second China-DPRK economic, trade, culture and tourism expo has opened in the border city of Dandong in Northeast China’s Liaoning province.

The DPRK’s National Folk Art Troupe performed its ethnic dances at the opening ceremony on Thursday. A 500-member delegation from the DPRK is attending the expo which lasts from Thursday to Monday.

The expo is by far the largest foreign economic and trade event for the DPRK. And more than 90 percent of the country’s foreign trade companies have sent their representatives. Meanwhile there are over 10,000 traders from China.

The expo also attracts companies from Malaysia and Thailand. There are 16 events including promotion of China-DPRK commodities, and DPRK tourism. The DPRK’s investment policies are also to be introduced to attract investors.

The first such expo was held in 2012 with 72 agreements of cooperation signed. They have a combined value of over 1 billion US dollars.

According to KCNA:

The 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO opened on Thursday with due ceremony in Dandong, China.

Colorful events are to be held during the EXPO including trade fair, fine art exhibition, exhibition of photos on tourism and art performance.

Present at the ceremony were officials of the party and government of Liaoning Province and the city and those in the field of culture, economy and trade including Bing Zhigang, vice-governor of the province, citizens in Dandong, Liu Hongcai, Chinese ambassador to the DPRK, and his embassy members and diplomatic envoys of different countries to the DPRK.

Also present there were members of the delegation of the 2nd DPRK-China Economic, Trade, Cultural and Tourism EXPO led by Hong Kil Nam, vice-chairman of North Phyongan Provincial People’s Committee, Kim Kwang Hun, DPRK consul general to Shenyang, and Choe Un Bok, chairperson of the General Association of Koreans in China.

An opening speech was made there, which was followed by congratulatory speeches.

The speakers said that the EXPO will be a good opportunity to swap the successes and experience gained in various fields and boost the cooperation between the two countries.

They expressed the conviction that it will contribute to deepening the mutual understanding and trust and promoting the friendly and cooperative relations between the peoples of the two countries.

An art performance was given by the National Folk Art Troupe on the same day.

Prior to this, a reception was given for the participants of the Expo.

Xinhua also published this helpful advice for North Korean policy makers:

China-DPRK economic cooperation is important for maintaining peace and stability in Northeast Asia. China has a long history of investment in the DPRK, and is the country’s biggest trade partner. So what’s it like to do business in the DPRK?

Economic cooperation between China and the DPRK has strengthened as tons of goods are coming in and out the border each day. And the scale of their trade and investment has expanded over the past few decades. But the rapidly developing China-DPRK economic relations have certain problems that need to be solved. Many concerns have been raised in regards to the risk factor when investing in the country.

Today, China’s investment in the DPRK is mainly concentrated on minerals and other strategic resources. And many investors claimed that the main difficulties when they set up businesses in the DPRK is to cope with the country’s frequent policy changes.

Many Chinese companies and manufacturers have come to the exhibition hall for trade talks with the DPRK, and to have a better understanding of the country in which they have invested or intend to invest. The best way to find out the business environment there is to speak with someone who has been there long enough.

“You need to have certain knowledge about the rules and regulations in the DPRK before conducting investments there. A thorough business plan is a good start, and it’s crucial to have a business partner from the DPRK with a strong background,” said Ma Pengxiu, general manager of Dandong Hantong Trading company.

Some Chinese companies that have invested in the DPRK reportedly suffered losses, for which they blame the investment environment in that country. It’s true that enterprises cannot be certain of making profits, no matter which country they invest in they need to cope with local laws and regulations to avoid risks. But it’s also true that the DPRK has to improve its investment environment and make its policies more stable.

“There were companies and individuals who have experienced failures in the investments in the DPRK, so investors in these days are more concerned about the relevant protections from the DPRK side; my advise is to protect your business with a written wontract always,” said Ma.

Needless to say the DPRK delegation at the EXPO this year was well prepared and ambitious in seeking cooperation opportunities with the outside world. The country is keen on drawing investments to beef up its industries. In the meantime the DPRK still needs to take measures to ensure a stable business environment to make it easier for investors to thrive in the country.

Here is a link to the inaugural trade fair post.

Read the full stories here:
N. Korea, China kick off annual trade fair
Yonhap
2013-10-10

2nd China-DPRK Expo opens in Dandong
Xinhua
2013-10-11

Pictured above (Google Earth): The new Yalu/Amnok River bridge under construction

UPDATE 13 (2014-10-31): Opening of new NK-China bridge delayed indefinitely. According to the Daily NK:

The planned opening of the bridge connecting Dandong in Liaoning Province, China with Sinuiju, North Pyongan Province in North Korea has been delayed indefinitely, according a report by China’s state-run Global Times on October 31st.

According to the report, North Korea has not followed the business plan stipulating that it construct access roads to the bridge, and as such, its opening remains on hold. North Korea was charged with construction on access roads for the bridge, but work at the site has yet to begin, in fact, the area continues to be nothing but swathes of farmland.

On the ground in Dandong, the report conveyed the disappointment by many in the area, “This new bridge that was going to be so magnificently built is finished on one side, and a vegetable plot on the North Korean end.” Many traders and people purchasing homes and opening stores in the area were anticipating to benefit from increased commerce between the two cities, which account for 70% of bilateral trade, after the bridge’s completion.

The construction of the new bridge over the Amrok [Yalu] River, to replace the aging “Sino-Korean Friendship Bridge,” was officially proposed by China’s former Vice Minister of Foreign Affairs, Wu Dawei, when he visited North Korea in 2007. However, it was not until October 2009 that former Premier Wen Jiabao visited North Korea to make the deal official, for which China agreed to take on the construction costs. The two countries then finalized plans for the project in February 2010, with China continually pushing for construction to begin in October, only to see them finally begin in December that year after a series of delays.

Over the past four years of construction, China accelerated efforts to build a four-lane highway and other advanced features amounting to 2.22 billion RMB [approximately 360 million USD].

As to why the project has not moved forward despite China’s completion of its end of the deal, “North Korea demanded more investment from China for the connecting roads and has done no construction,” the report stated.

Daily NK previously reported in July about the advanced construction efforts on the Chinese side and predicted delays in the bridge’s opening due to failure by North Korea to uphold its end of the contract.

The story is not completely accurate, however, because the North Koreans have at least begun the process of building a road to connect the bridge to Sinuiju. According to Google Earth satellite imagery dated 2014-6-9 we can see the beginning of road construction:

Here is more in the Hankyoreh.

UPDATE 12 (2014-7-18): The Institute for Far Eastern Studies (IFES) offers an explanation for the lack of progress on the DPRK side of the bridge:

New Amnok (Yalu) River Bridge – Present Conditions and Future Outlook

According to recent reports, the New Amnok (Yalu) River Bridge may not be finished by its projected date of September 2014 due to delays in the construction of roads and customs facilities.

The bridge, which will connect the North Korean city of Sinuiju with the Chinese city of Dandong in Liaoning Province, has advanced into the final stages of construction following the recent completion of the control tower and the bridge deck.

When the bridge is completed, the existing Amnok River Bridge (located approximately 10km away from the new bridge) will be restricted to railroad traffic only, and general road traffic to-and-from North Korea and China will be rerouted to the new bridge.

The existing Amnok River Bridge has been cited as a bottleneck for the blooming trade industry between North Korea and China for several reasons. The bridge, built in 1911, accommodates both a railway and roadway, but has only one lane. Furthermore, its old age has sparked safety concerns; trucks weighing over 20 tons have been prohibited from using the bridge.

Reportedly, China has begun construction on a new commerce zone costing 2 billion RMB (330 billion KRW) that will connect with the New Amnok River Bridge from the Chinese side.

The new commerce zone is set to be built on a 380 thousand square-meter plot of land and will include various services such as border checkpoints, customs, quarantine facilities, and immigration. Business facilities such as hotels, shopping centers and other residential and commercial buildings are also expected to be built in this area.

Once construction finishes and operations begin, China is expecting that the new area will accommodate for the passage of up to twenty thousand cars and fifty thousand people per day. It is also predicted that the new trade zone will be responsible for up to 60 percent of the total trade volume passing between the two countries.

However, on the North Korean side, it appears that construction has yet to begin on any of the necessary immigration facilities such as checkpoints and customs.

It has been reported that since construction of the New Amnok (Yalu) River Bridge began in 2010, abrupt changes in the state of affairs and weakening international ties between the two countries has left North Korea without a financier. North Korea had originally projected total construction and operation costs of 20 million USD (approx. 20 billion KRW), but has yet to secure the money from foreign investors.

In the past, the Chinese government persuaded North Korea into constructing the New Amnok (Yalu) River Bridge, but appears to have lost its previous fervor.

Back in 2007, China’s former Vice Minister of Foreign Affairs, Wu Dawei, proposed the construction of the new bridge under the condition that China will be responsible for the entirety of construction costs. In October 2009, former Premier Wen Jiabao visited North Korea and finalized the agreement.

From the outset, plans for the creation of the New Amnok River Bridge were not drawn up by North Korea, but rather strongly demanded by the regional governments in China’s Liaoning province and Dandong city. North Korea set its focus on the repair of the original existing Amnok River Bridge in order to set a fixed limit on the exchange of personnel and materials, citing regime stability as a reason. However, China persisted, promising to provide financial support for the construction of not only a new bridge, but also for customs facilities, immigration, and a highway connecting the bridge to Pyongyang.

At first, China was actively engaged in supplying North Korea with the financial resources necessary for construction. However, with the increase in nuclear tests, missile launches and increasingly negative internal public opinion, as well as the execution of Chinese ally Jang Song Thaek, China seems to have slowed the pace and now carefully monitors its involvement with North Korea.

In order to protect its domestic and foreign image, it is expected that China will complete construction of the infrastructure on their side of the New Amnok River Bridge within the year. China is also expected to offer less support to North Korea, showing an increasingly passive response.

According to recent reports, North Korea is currently in the process of preparing the customs and immigration facilities in Sinuiju—connected to the existing Amnok River Bridge—to handle procedures after construction of the new bridge is finished. The existing facilities are expected to be used due to North Korea’s inability to finish construction of the new immigration facilities and other connecting roads on time.

North Korea’s Central News Agency (KCNA) introduced the New Amnok River Bridge on a television program in August 2013, boasting that over 3,000 lorries and cargo ships will pass over and under the bridge per day. In the program, it is said that the bridge will be completed by September 2014

UPDATE 11 (2014-7-2): The bridge opening is likely to be delayed (again). According to the Daily NK:

The planned opening of a large new bridge across the Yalu River connecting Dandong in Liaoning Province with Sinuiju is likely to be delayed, Daily NK has learned. The cause of the delay is thought to be North Korea’s failure to make good on its contractual obligations.

“The Chosun side took on the job of constructing the roads, but they are making painfully slow work of it. Because the roads are still not finished, people are wondering whether their initial aim of increasing trade volumes is on its way down the drain,” a source close to the project told Daily NK on the 1st.

“China provided a lot of materials and machinery to the North, but there is a story that this machinery was sent for use on other projects rather than for the bridge construction. The Chinese traders who did harbor high hopes for [economic] opening brought on by the bridge are showing their disappointment more and more,” the source explained.

The partially complete New Amrok [Yalu] River Bridge is designed to connect Langtou new city with south Sinuiju at a total cost of 2.22 billion RMB (approximately 357 million USD). It lies 8 km downstream from the ageing “Sino-Korean Friendship Bridge” (formerly the Amrok [Yalu] River Bridge).

The old bridge is currently the only one that connects the two cities, but, built in 1943, it is wholly unfit for purpose. Trucks that weigh more than 20 tons are not allowed on it due to safety concerns, and it also has just one lane, which restricts trade volumes. Traders had hoped that the new bridge would speed up commerce between the two cities, which account for 70% of bilateral trade despite these structural limitations.

The construction of the new bridge was officially proposed by China’s former Vice Minister of Foreign Affairs, Wu Dawei, when he visited North Korea in 2007. However, it was not until October 2009 that former Premier Wen Jiabao visited Pyongyang and sealed the deal, under which China agreed to foot the bill for construction. The two countries then finalized plans for the project in February 2010, and the groundbreaking ceremony was held in December that year.

The Chinese side has demonstrated its intent to see the completion of the four-lane bridge, with its accompanying management, security and inspection infrastructure.

“In accordance with the plan, China has already got a customs office in place to administer the flow of goods over the bridge,” the source revealed. “But the North has slowed right down, and the talk of trade expansion from before has gone away.”

This declining enthusiasm is tangible in the property market in Langtou, the region of Dandong that ought to benefit the most from bilateral economic activity across the new bridge. “Apartment prices remain where they were three years ago, at roughly 4000 Yuan per pyeong,” explained the source. Pyeong is a Korean unit of measuring area, and amounts to 3.305785m².

“The number of people wanting to learn Korean in Dandong is still the same,” he admitted, “but that’s only because they want to watch Korean dramas. They have already given up on the idea of booming trade with North Korea since they saw those who had been successful going to the wall after the execution of Jang Song Taek.”

In addition to problems with the bridge, Daily NK established in May that almost no progress has been made on the development of two Special Economic Zones in the Sinuiju area (see linked article).

UPDATE 10 (2014-1-14): Xinhua reports the bridge will open in 2014:

A new bridge over the river border between China and the Democratic People’s Republic of Korea (DPRK) is expected to open this year, local authorities said on Tuesday.

About 80 percent of work on the Yalu River Bridge is complete, according to the Transport Department of northeast China’s Liaoning Province.

Construction began on the 3 km bridge at the end of 2010, and will cost 2.22 billion yuan (356 million U.S. dollars).

A joint project between the two countries, the bridge will have four two-way lanes upon completion, according to an agreement signed in February 2010. The new route is expected to boost communication and economic cooperation.

The only bridge connecting the nations was built in 1937. Trucks weighing more than 20 tonnes are not allowed on the one-way bridge, considerably restricting trade volume.

UPDATE 9 (2013-11-8): Yonhap releases a photo of the bridge nearing completion:

UPDATE 8 (2013-10-14): According to the Global Times:

A new bridge will link China and the Democratic Republic of Korea (DPRK) by 2014 and greatly boost exchange and trade between the two countries, officials said Monday.

A new border trade complex, complete with customs services, border control and quarantine services, as well as office buildings, hotels and markets will also be operational by 2014, according to Shi Guang, mayor of Dandong city, where the bridge is located.

The whole complex will cover 38 hectares and cost two billion yuan (325.8 million USdollars) to build, Shi said.

The new bridge is 10 kilometers down the Yalu river from the old bridge, which was built in 1937 and has been sole major passage on the China-DPRK border.

The two governments agreed to build the new bridge in early 2010. It will have four lanes and a span of about three kilometers.

The new facilities will be able to handle as many as 20,000 vehicles and 50,000 people a day and Dandong authorities expect that businesses done at the trade complex will account for 60 percent of China-DPRK trade.

UPDATE 7 (2013-10-10): The Institute for Far Eastern Studies (IFES) offers some new information:

The construction of the New Yalu River Bridge, the new suspension bridge over the Yalu River, connecting China’s Dandong city (Liaoning Province) and North Korea’s Sinuiju city (North Pyongan Province) is in its final stages.

Currently, the volume of trade between Sinuiju and Dandong is heavy, and the Yalu River Railway Bridge is saddled with transporting goods. It is hoped that the new bridge will help ease that burden. Several hundred workers are involved in its construction.

According to one Dandong resident, “Despite North Korea’s nuclear test and China’s decision to impose sanctions against the North, construction of the New Yalu River Bridge has been relentless.” The new bridge is considered as an important symbol of Sino-DPRK economic cooperation. Its construction is believed to be well on track.

The total project cost of the construction is estimated to be 2.22 billion CYN (about 390 billion KRW or 3.6 million USD). China is covering the bridge’s construction costs and has reportedly introduced a variety of new technologies to improve the precision and safety of the structure. Once completed, the bridge will be 3 km in length, with the height of its two pylons at 197 meters and the distance between pylons to be about 636 meters.

Travel from Pyongyang to Dandong currently takes 4 hours; that time is expected to be cut in half as the new suspension bridge is located 8 km downstream from the existing railway bridge.

If the construction progresses smoothly, the bridge should open for operation by July 2014. The Korean Central News Agency (KCNA) reported on August 23 that the new bridge should accommodate over 3,000 55-tonne freight cars per day, and 3,000-tonne ships will be able to pass under the bridge.

Along with the new bridge, China and North Korea are also engaged in joint development of a new district in Dandong and the Hwanggumpyong Special Economic Zone (SEZ). Despite the lingering concerns over the development of these areas after the death of former North Korean leader Kim Jong Il, the development has reportedly continued uninterrupted.

Despite the continued international and other sanctions against North Korea, the development of Hwanggumpyeong SEZ is speculated to pick up speed after the completion of the bridge. The Hwanggumpyeong SEZ is a project that North Korea put forth in response to the “May 24 Sanctions” imposed by the South Korean government after the sinking of ROKS Cheonan. These sanctions essentially had brought an end to all inter-Korean economic cooperation and exchanges (with the exception of the operations at the Kaesong Industrial Complex).

Last September, a groundbreaking ceremony for the administrative building in the Hwanggumpyeong SEZ was held. Since then a customs building, security facilities, management office, street lights, and transport inspection office are reported to have been built or are currently under construction.

UPDATE 6 (2013-8-23): New KCTV footage of the bridge can be seen here:

UPDATE 5 (2013-6-4): I wrote an update on the construction of the bridge at NK News.

UPDATE 4 (2012-11-7): The China Daily’s English-language Dandong page reports on the status of the bridge:

Construction on the new bridge, with an investment of 2.22 billion yuan, began at the end of 2011. According to the Dandong government, the main structure of the bridge has been completed. It is expected to become operational in July 2014.

UPDATE 3 (2011-6-25): Adam Cathcart took some pictures of the new bridge construction–so it is progressing!

UPDATE 2 (2011-2-2): For some time I have been trying to track down the location of the proposed new Yalu River bridge which will connect the DPRK and China.  Thanks to a story in the Daily NK, I was able to map it out on Google Earth:

Pictured above: Location of the proposed Yalu Bridge (Google Earth) [UPDATE-The bridge was ultimately moved from this location]

According to the Daily NK:

According to someone inside the construction company responsible for the bridge’s development, “The development of Xinchengqu has been on the drawing board for two years. This time, the construction of the New River Yalu Bridge was confirmed between China and North Korea. This is a very good chance for us, from now on Xinchengqu will become the center of China-North Korea trade.

According to Dandong’s urban development plan, the bridge will connect Busan-Seoul-Pyongyang-Dandong and Beijing in the future, implying that future trade and cooperation between a reunited Korea and China is being taken into account.

China is providing the construction costs for the New Yalu River Bridge; an estimated one billion Yuan (approximately $145 million).

This particular location is interesting because it completely bypasses the city and county of Sinuiju–where earlier reports (below) described its location.  The bridge actually crosses from China into Sopuk-ri, Ryongchon County (서북리, 룡천군)—in the middle of nowhere.  There is absolutely no infrastructure at this location for administering trade between the DPRK, China, and prospectively South Korea, so it will all need to be built from scratch or moved from Sinuiju. Either way, this is bad news for Sinuiju which today benefits financially as both the capital of North Pyongan Province and as the gateway for the majority of trade between the DPRK and China.  It looks like Ryongchon may be taking some of their business!

In addition, the North Koreans have been widening  the Sinuiju highway and “beautifying” all of the surrounding residential areas in anticipation of greater loads of traffic coming from China.  See more about this here.  This could all be for naught if the Chinese end up building a trade artery south of all this construction!

UPDATE 1 (2010-12-31): (KCNA h/t Aidan Foster-Carter) The ceremony did take place to mark the launch of the bridge’s construction:

Pyongyang, December 31 (KCNA) — A ground-breaking ceremony for a DPRK-China bridge across the River Amnok took place in Dandong City, China, on Friday.

Present there from the DPRK side were its government delegation headed by Kim Chang Ryong, minister of Land and Environmental Conservation, and from the Chinese side Li Shenglin, minister of Transport, Hu Zhengyue, assistant to Foreign Minister, and Chen Zhenggao, governor of the Liaoning Provincial People’s Government, and other officials concerned of the central and local governments of China.

Speeches were made by Kim Chang Ryong, Kim Song Gi, vice-minister of Foreign Affairs, and Choe Jong Gon, chairman of the North Phyongan Provincial People’s Committee, from the DPRK side and Li Shenglin, Hu Zhengyue, and Chen Zhenggao from the Chinese side.

They said that two rounds of General Secretary Kim Jong Il’s visit to China this year marked historic events of epoch-making significance in developing the DPRK-China friendship on a fresh high stage.

They expressed belief that the bridge would make a contribution to demonstrating once again the great vitality and invincible might of the DPRK-China friendship steadily growing stronger.

The bridge will be successfully built as a symbol of the DPRK-China friendship and a structure of the two peoples, they added.

Then followed a ceremony of the ground-breaking for the project.

The Ministry of Transport, the Liaoning Provincial Committee of the Communist Party and the Liaoning Provincial People’s Government of China arranged a reception in connection with the ceremony.

ORIGINAL POST (2010-12-28): According to Daily NK:

It was reported that there will be a ceremony to celebrate the start of construction of the New Yalu River Bridge linking Shinuiju and Dandong, China, before the end of the year.

Yonhap News yesterday quoted Shenyang and Dandong sources saying that both the North Korean and Chinese authorities decided to hold the ceremony this year and have started preparing for the event.

The source in Dandong said, “Instructions that the start of the bridge construction must not slip to next year were handed down from the Chinese government last week, so the governments of Dandong City and Liaoning Province urgently are trying to set a date. It will likely happen the 30th or 31st.”

The source also explained the reason why the Chinese government is hurrying to start the construction, which was supposed to start early next year. “Both China and North Korea intend to show observers domestically and internationally they have the will to construct the bridge.”

In Langtou, Dandong, where one end of the bridge will be built, a construction board has been set up and says the New Yalu River Bridge will connect to Jangseo in the southern part of Shinuiju.

China and North Korea agreed to construct the bridge in October 2009, and in February, the Vice Minister of Foreign Affairs of North Korea, Pak Gil Yon, and Chinese Assistant Foreign Minister Wu Hailong signed the agreement in Dandong, China.

Dandong City had announced plans to start construction of the bridge in October, but it has been delayed for uncertain reasons. It was rumored there was conflict over the construction of the bridge because North Korea had requested additional aid from the Chinese government.

Researcher Jeon Byung Gon of the Korea Institute for National Unification said in a telephone interview with The Daily NK that, “The ceremonial ground-breaking will be a chance to promote the friendship between China and North Korea again.”

Researcher Jeon explained that, “So far, there have been several impediments to trade such as quotas, outdated facilities for transportation, both countries’ border management, etc. However, when the New Yalu River Bridge is constructed, such limitations can be resolved and trade between China and North Korea can be revitalized.”

He predicted, “Since they are trying to carry out the construction in a hurry, economic cooperation and friendship relations between two countries will be taken to the next level.”

Also, from the Choso Ilbo:

A source in Dandong said Wednesday that North Korea and China will start construction of the bridge as early as Friday. The two sides agreed to build the bridge during Chinese Premier Wen Jiabao’s visit to North Korea in October last year, with work expected to start this October.

China insists on having the bridge connect the newly renovated area of southern Dandong and southern Sinuiju, but North Korea wanted it to cross over Wihwa Island in Apnok River and connect Dandong with the old part of Sinuiju. The North claimed the route preferred by China would necessitate building a long embankment but in fact seems to have been nervous that a direct link to Pyongyang would cause security concerns like making it easier for North Koreans to flee.

But the North seems to have caved in. A source said construction will begin in March but a groundbreaking ceremony will be held before the end of this year.

Meanwhile, transport of goods and products has picked up via the Hunchun- Rajin-Sonbong route as part of an economic cooperation project. Around 500 truckloads of coal from China’s Jilin Province were shipped out of Rajin-Sonbong Port on Dec. 7 and are being transported to Shanghai across the East and South seas.

Read the full stories here:
New Yalu Bridge Groundbreaking This Year
Daily NK
Mok Yong Jae
12/28/2010

N.Korea’s Cross-Border Business with China Picking Up
Choson Ilbo
12/30/2010

According to the South China Morning Post:

In 2012, Hong Kong became North Korea’s No 2 trading partner with two-way trade reaching US$111 million (HK$861 million), rising 457 per cent from the year before, according to data from a South Korean trade organisation.

Last year alone, the Stalinist country exported US$58 million (HK$450m) worth of goods to Hong Kong and imported items worth nearly US$53 million (HK$411m) from the city, according to a recent report by South Korea’s government-run Korea Trade-Investment Promotion Agency.

The upward trend in two-way trade might be explained as a one-time jump, but experts suggest that Hong Kong may be part of the mainland China’s broader agenda for its relations with North Korea.

“Hong Kong is a tool for Sino-Korean relations because it can play certain functions in pushing forward the relationship between Beijing and North Korea,” explained Steve Chung, a professor of international relations at the Chinese University of Hong Kong.

The rise in trade between North Korea and Hong Kong in recent years coincides with the establishment of a joint industrial zone to be operated by Beijing and Pyongyang.

Read the full story here:
How did Hong Kong become North Korea’s No 2 trading partner?
South China Morning Post
Audrey Yoo
2013-10-9

According to KCNA (2013-10-9):

Honorary Doctorate in Economics Awarded to Kim Jong Un in Malaysia

Pyongyang, October 9 (KCNA) — Supreme leader Kim Jong Un was awarded the degree of honorary doctor of economics from the Help University of Malaysia.

A ceremony for conveying the certificate and costume took place in Kuala Lumpur on October 3.

Present there were public figures of all social standings including the president of the university who is its establisher, the DPRK ambassador to the country and his embassy members.

The president said it is honor and historic event for his university to award the degree of honorary doctor to Kim Jong Un, who is the first foreign head of state to receive the degree by the university.

We decided to award the degree to Kim Jong Un who makes untiring efforts for the education of the country and the well-being of its people, the president said, adding that this is the pride of the university.

He hoped that the cooperation between the DPRK and Malaysia in the field of education would develop in the future.
The certificate and costume were handed over to the DPRK ambassador.

Foreign Policy follows up with helpful information.