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DPRK signs economic agreement with local Russian governments

Tuesday, April 29th, 2014

Not much specific information is available, but the DPRK has signed economic agreements with Russia’s Amur and Sakhalin Regions.

According to RIA Novosti:

North Korea’s Foreign Trade Ministry and the authorities of Russia’s Amur region in the country’s southeast have signed an economic cooperation agreement, the Yonhap news agency reports.

“An agreement on trade and economic cooperation was signed between the DPRK ministry of Foreign Trade and the Amur Regional Government of the Russian Federation,” Yonhap cited Pyongyang’s KCNA state news agency as saying Monday.

According to the Korean Central News Agency, the accord was signed Monday during the visit of Yuri Trutnev, a Russian Deputy Prime Minister and Putin’s official envoy to Russia’s Far Eastern Region.

As part of his North Korea trip, Yuri Trutnev met with the Cabinet’s Vice President Ro Tu-chol and reportedly shared his views on a broader economic cooperation between the two nations, among other issues.

The agreement between Moscow and Pyongyang is another step towards closer economic partnership in the Far Eastern region, after the Amur territory on China’s northern border signed a fraternity and trade deal with Korea’s South Pyongan province in 2011.

A similar economic cooperation agreement was signed last week between Pyongyang and the local government of Russia’s Sakhalin region.

Voice of Russia reports the following:

North Korean’s Foreign Trade Ministry and the government of Russia’s far-eastern Amur region have signed an agreement on trade and economic cooperation, the Yonhap news agency reports with reference to the Korea Central News Agency (KCNA).

The agreement was signed on Monday during a visit to Pyongyang of a Russian delegation led by Deputy Prime Minister and Presidential Plenipotentiary in the Far-Eastern Federal District Yuri Trutnev.

No further details have been immediately available.

A wide range of matters, connected with the development of political, trade-and-economic cooperation will be discussed in the Democratic People’s Republic of Korea (DPRK) by Yuri Trutnev, Russia’s Vice-Premier and Russia’s plenipotentiary presidential representative in the Far Eastern Federal District.

An official at the Russian Embassy to the DPRK said that Trutnev would arrive here by air on Monday by a special flight at the head of a Russian delegation for a three-day visit, TASS reports.

Apart from talks with DPRK officials, the Vice-Premier will attend a ceremony marking the handover of a large consignment of fire-engines to the Korean side.

The delegation will also lay flowers to the Liberation Monument here. The Monument bears an inscription “Eternal glory to the Great Soviet Army that liberated the Korean People from the yoke of Japanese militarists and opened up the road for the Korean people to freedom and independence!”.

The delegation leader will be accompanied by Primorsky Territory Governor Vladimir Miklushevsky, Khabarovsk Territory Governor Vyacheslav Shport, and Amur Region Governor Oleg Kozhemyako.

In March this year, the DPRK was visited by President Rustam Minnikhanov of the Republic of Tatarstan, as well as by Alexander Galushka, Russian Minister for the Development of the Far East. The latter attended a meeting of the Co-Chairmen of the Intergovernmental Commission for Trade-and-Economic, Scientific and Technical Cooperation between the Russian Federation and the DPRK as head of the Russian part of the Commission.

Moscow and Pyongyang actively strengthen economic contacts of late. The delegations of Russia and the DPRK attended a meeting the international “Organization for Cooperation of Railways. It is reckoned that the Organization’s main goals are to develop international freight and passenger transportation, and establish a Common Railway Transportation Space in Eurasia. This year the Organization’s conference is being attended for the first time by South Korea as well.

Tense relations between Pyongyang and Seoul are keeping on at the political level. Nevertheless, Russia is calling on the two countries to reach agreement between each other and take part in implementing the project for linking up the inter-Korean Railway and the Trans-Siberian Mainline Railway (Trans-Sib).

Railway transport is one of important areas of cooperation between Russia and the DPRK. A ceremony marking the completion of the upgrading of the railway section running from the Russian station of Khasan to the North Korean city of Rajin was held in the Republic in September last year. Work has been also completed to bring into being a general-purpose trans-shipment terminal in Rajin the principal port in the Rason trade-and-economic zone.

The upgrading of the infrastructure of the Khasan-Rajin railway leg is viewed as the pilot segment of the reconstruction of the entire Trans-Korea Railway. In prospect, when railway communication from the South Korean port of Pusan via the DPRK to Russia is established in full, an opportunity will open up to reorient to Russia’s Trans-Sib a considerable part of goods, which are currently shipped now via a trans-oceanic seaway from South Korea to Europe.

The possibility is being explored for inviting South Korean businessmen to participate in developing the railway transportation infrastructure o the DPRK, including port facilities.

Here is some comprehensive analysis by 38 North.

Here is some more analysis at the Hankoyreh.

Read the full stories here:
Russia, North Korea Strike Economic Cooperation Deal
RIA Novosti
2014-4-29

N Korea, Russia’s Amur region seal regional cooperation deal
Voice of Russia
2014-4-29

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Posted in International Aid, International trade, Rason Economic and Trade Zone (Rajin-Sonbong), Russia | Comments Closed

DPRK grain imports from China fall

Sunday, April 27th, 2014

We earlier posted an article on how DPRK-China trade has fallen in the first quarter of 2014. The DPRK has apparently imported zero oil from China in the first quarter of this year.

Grain imports from China also fell.

According to Yonhap:

North Korea’s grain imports from China decreased by more than 50 percent in the first quarter from a year earlier, data showed Sunday.

According to the Korea International Trade Association (KITA), North Korea imported 26,263 tons of grain, including 23,636 tons of flour, 1,241 tons of rice and 1,192 tons of corn, from China in the January-March period.

The North’s imports during the first three months is equivalent to 48 percent of 54,178 tons imported during the same period a year ago, the data showed. Compared with the first quarter of 2012, the country’s grain imports from China decreased about 40 percent.

In terms of value, the North’s imports of Chinese grain amounted to US$11.93 million in the first quarter, down 52 percent from $24.71 last year.

“The drop in the North’s grain imports from China in the period compared with other years seems to be due to an increase in the country’s grain production last year,” said Kwon Tae-jin, a research fellow at the government-funded Korea Rural Economic Institute (KREI). “However, the country may increase its grain imports in the future, as the amount of its grain production is not enough for its people.”

The U.N. World Food Program (WFP) estimates the North produced 5.03 million tons of polished grain between November 2013 and October 2014, up 5 percent from a year ago.

Read the full story here:
N. Korea’s grain imports from China halve in Q1
Yonhap
2014-4-27

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Posted in 2014 Food Shortage, Agriculture, China, Food, International trade, Statistics, Trade Statistics | Comments Closed

ROK extends bridge loans to firms that invested in the DPRK

Friday, April 25th, 2014

According to Yonhap:

South Korea said Friday it will extend 20 billion won (US$19.2 million) in loans to companies that have been in financial trouble for years due to the suspension of their businesses with North Korea.

The decision came four months after South Korean investors called for special low-interest loans to help ease their financial pinch following the shutdown of their businesses.

South Korea has suspended a tour program to Mount Kumgang since 2008 when a female South Korean tourist was shot dead by a North Korean soldier near the mountain resort on the North’s east coast.

Seoul’s move dealt a heavy blow to South Korean companies that invested in the North’s mountain resort, including Hyundai Asan, the inter-Korean business arm of Hyundai Group.

North Korea has since repeatedly called for the resumption of the tour program, which served as one of a few legitimate revenue sources for the cash-strapped country.

South Korean businessmen involved in projects in North Korea suffered further setbacks in 2010 when Seoul slapped sanctions on Pyongyang over the deadly sinking of a South Korean warship blamed on the North.

Under the sanctions, South Korea has suspended inter-Korean projects and banned new investment in the North, except for their joint factory park in the North’s border city of Kaesong.

The unification ministry, which handles inter-Korean affairs, said it expected the latest extension of loans to help ease financial difficulties of the companies.

South Korea has extended special loans worth 62.6 billion won ($60.1 million) to more than 230 local companies involved in cross-border projects with North Korea in recent years.

This week, the North called on South Korea to lift the sanctions imposed on Pyongyang in retaliation for the sinking in March 2010 that killed 46 South Korean sailors.

South Korea has called for, among other things, the North’s admission of its involvement in the sinking in return for lifting of the sanctions, though Pyongyang has refused to take responsibility for the deadly attack.

Read the full story here
S. Korea to extend 20 bln won to firms with ties to N. Korea
Yonhap
2014-4-25

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Posted in Foreign direct investment, Mt. Kumgang Tourist Special Zone, South Korea, Special Economic Zones (Established before 2013) | Comments Closed

China seeking to boost Chinese tourist numbers

Monday, April 14th, 2014

According to Yonhap:

China has launched the second train service to North Korea, state media reported Monday, a move expected to boost travel between the two nations.

The Sunday opening of regular rail services from China’s northeastern city of Jian to the North Korean capital of Pyongyang (via Manpho) makes Jian the second city offering such service after another Chinese border city of Dandong, Xinhua news agency reported.

North Korea is one of the world’s most secretive and isolated nations, but Pyongyang has stepped up efforts to attract foreign tourists since last year by offering more international and domestic flights.

In Jian, Chinese tourists can apply for a one-day round trip, which is available once every four days, to North Korea for US$480 per person, the report said.

Zang Wanghong, director of the Jian Tourist Board, said the tour agency will begin selling the tour package to the North’s western port city of Manpo before May 1, according to the report.

According to Xinhua:

A group of 32 Chinese tourists on Sunday took a train from Ji’an City in northeast China’s Jilin Province for five-day trip to the Democratic People’s Republic of Korea (DPRK).

The opening of the train route makes Ji’an, the second city after Dandong in neighboring Liaoning Province with service to DPRK.

The train from Ji’an can take tourists to Pyongyang, Kaesong and Panmunjom in DPRK, according to Liu Jun, deputy manager of the Ji’an International Travel Agency.

Both Ji’an and Dandong face DPRK across the Yalu River. The distance between Ji’an and DPRK’s capital of Pyongyang is 400 km, while that between Dandong and Pyongyang is about 200 km.

Chinese visitors with ID cards and passports can apply for the 2,980 yuan(480 U.S. dollar) visit in Ji’an. The trip is organized every four days.

Zang Wanghong, director of the Ji’an Tourist Board, said Ji’an will open a one-day tour to Manpo, a port city on the western coast of DPRK before May 1.

Ji’an which boasts a UNESCO world heritage site of the Ancient Koguryo Kingdom hopes to develop tourism based on its own resources and its adjacency to DPRK, said Zang.

Read the full story here:
China starts 2nd rail travel service to N. Korea
Yonhap
2014-4-14

Another Chinese city opens train travel to Pyongyang
Xinhua
2014-4-13

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Posted in China, Railways, Tourism | Comments Closed

DPRK defection numbers, 2014-Q1

Tuesday, April 8th, 2014

According to Yonhap:

A total of 360 North Koreans fled their home and arrived in South Korea in the first quarter of this year, registering a slight increase from a year earlier, the unification ministry said Tuesday.

According to the data compiled by the ministry, which handles inter-Korean affairs, 153 North Koreans settled in the South in January, 111 in February and 96 in March.

The figure for the quarter was slightly higher than the 319 entrants for the same period in 2013 and the 352 people in 2012, the data showed.

“The 2014 tally was slightly higher than that of the previous two years, but it remains to be seen until the end of this year if it indicates any significant changes,” a ministry official said.

Last year, a total of 1,516 North Koreans settled in the South, up slightly from 2012 when 1,502 people crossed the border, according to ministry data. South Korea is now home to 26,124 North Koreans.

Here is additional data provided by the Choson Ilbo:

From 2006 until 2012, the annual figure stood between 2,500 and 3,000, but it fell to an annual average of about 1,500 when North Korean leader Kim Jong-un took power.

A ministry official said that the number has dropped because the regime has cracked down on defections. “It has tightened border security and is bringing defectors back to the country,” the official added.

Last year, defectors on average earned W1.41 million (US$1=W1,024) in South Korea, just 64 percent of the country’s average pay of W2.18 million. Unemployment among defectors stood at 9.7 percent, more than three times the average of 2.7 percent.

The Daily NK also reports the numbers.

Read the full stories here:
360 N. Korean defectors arrive in South in Q1
Yonhap
2014-4-8

Fewer N.Korean Defectors Reaching South
Choson Ilbo
2014-5-8

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Posted in 2014 Emigration Statistics, Emigration, South Korea | Comments Closed

US trade and aid to DPRK…

Tuesday, April 8th, 2014

According to Yonhap:

U.S. exports to North Korea jumped nearly 20-fold in February from a year earlier, a U.S. radio report said Tuesday.

The volume of trade between the two countries reached US$1.2 million in February, compared with $62,000 a year earlier, the Voice of America (VOA) reported, citing data compiled by the U.S. Commerce Department.

The VOA said that humanitarian assistance provided by U.S. private agencies accounted for 95 percent, or $1.13 million, of the total U.S. shipment to North Korea in February.

The rest of the U.S. exports to the North included poultry, footwear and plastic products, the radio report said.

The U.S., however, imported nothing from North Korea during the cited period, it said.

Read the full story here:
U.S. exports to N. Korea jumps nearly 20-fold in Feb
Yonhap
2014-4-8

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Posted in Foreign aid statistics, International Aid, Statistics, Trade Statistics, USA | Comments Closed

China’s plans for Quanhe Customs House

Monday, April 7th, 2014

Quanhe Customs House will be the border facility for managing Chinese traffic into Rason (and further down the coast). Within the administration building on the site is a poster advertising the plans to expand the customs house to manage more traffic.

Quanhe-customs-2

The billboard offers a conceptual image of the new facility, a map of the new location, and some informative copy (in Chinese).

Here is a Google Earth image of the proposed construction site in relation to the existing border compound:

New-Quanhe-customs

Here is a translation of the Chinese on the sign text:

Introduction of Construction Project of Quanhe (Guanghe) Port

1. The Proposed Location
The proposed site is located in Quanhe Village, Jingxin-Zhen of Hunchun City, north side of Quanhe Road. The project covers an area of 180,000 square meters (map below).

2. Construction Project
The total investment of Quanhe Port Project is 299,331,500 RMB, and the total construction area is 16992m2. including Passenger Security Channel (5445m2), Cargo Inspection Channel (2000m2), House For Frontier Inspection (1680m2), Cargo Storehouse (2000m2), Inspection And Quarantine Site (2400m2), Dormitory Restaurant (2567m2), Garage And Boiler Room (900 m2).

Passenger Security Channel: Including each 6 channels for entry and exit, and another 4 vehicle channels for touring bus. Designed annual passenger capacity is 2 million.

Cargo Inspection Channel: Including each 4 channels for entry and exit of cargo and another 1 channel for passenger. The designed annual cargo capacity is 1.65 million tons.

3. Remaining
The existing inspection building will be used as channels for border trade and tourism after the new facilities getting into operation.

Thanks to Berhhard Seliger for the info!

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Posted in China, Rason Economic and Trade Zone (Rajin-Sonbong) | Comments Closed

Mongolia involved in Sepho Tableland project

Monday, April 7th, 2014

Sepho-tableland

Pictured above: Sepho, Phyonggang, and Ichon Counties. These three counties are home to the Sepho Tableland Project.

According to KCNA:

DPRK, Mongolia Sign MOUs

Pyongyang, April 2 (KCNA) — A memorandum of understanding on setting up the DPRK-Mongolia friendship joint company between the DPRK and Mongolian governments was inked here on Wednesday.

Present at the signing ceremony from the DPRK side were Ri Ryong Nam, minister of Foreign Trade who doubles as chairman of the DPRK side to the Inter-governmental Committee for Consultation in Economy, Trade, Science and Technology between the DPRK and Mongolia, Hwang Min, vice-minister of Agriculture who is also chairman of the Livestock Management Committee in Sepho Area, and officials concerned and from the Mongolian side were Mongolian Minister of Industry and Agriculture Khaltmaa Battulga who is chairman of the Mongolian side to the Inter-governmental Committee for Consultation in Economy, Trade, Science and Technology between the DPRK and Mongolia and his party and Manibadrakh Ganbold, Mongolian ambassador to the DPRK, and his embassy officials.

A MOU was also signed between the Ministry of Foreign Trade of the DPRK and the Ministry of Labor of Mongolia.

The Sepho Tableland Project was announced on November 9, 2012 (KCNA):

DPRK Premier Stresses Importance of Building Large-scale Stockbreeding Base

Pyongyang, November 9 (KCNA) — Premier Choe Yong Rim learned about the preparations for creating vast grass field in Sepho, Phyonggang and Ichon counties of Kangwon Province and turning it into a large-scale stockbreeding base of the country.

The creation of vast grass field in the counties covering tens of thousands of hectares and the construction of combined processing base for livestock products will bring about an epochal turn in carrying out the party’s policy of improving the standard of people’s living by massively breeding grass-eating domestic animals.

Generalissimos Kim Il Sung and Kim Jong Il gave instructions to Sepho County several times on developing stockbreeding suited to climatic, natural and topographical conditions, while making continued journey of guidance for people’s happiness.

The dear respected Marshal Kim Jong Un unfolded a plan for transformation of Sepho tableland, true to the intention of the great Generalissimos and brightly indicated the orientation and ways for realizing it.

The premier first learned about the vegetable produced in part of the reclaimed Sepho tableland, looking round the field of a sideline farm of a unit of the Korean People’s Army.

Then, he acquainted himself with the area of reclaimed grass field and soil condition in Sepho County in Songsan area of the Sepho tableland.

A consultative meeting of senior officials of party, state and army was held on the spot.

The participants were briefed on a huge map showing the panoramic view of the field. The meeting discussed the goal of reclaiming grass field in Sepho, Phyonggang and Ichon areas and building stockbreeding base and the issue of providing labor, raw materials and equipment necessary for its reclamation and construction.

The meeting called on all the units to channel efforts into achieving the goal of creating grass field and reclaiming and building stockbreeding base in Sepho, Phyonggang and Ichon areas. The goal reflects the far-reaching plan and unusual wisdom of the Marshal.

Practical issues including the work for keeping the designing ahead of the project and providing raw materials and equipment under a plan were discussed and relevant organization of work was made at the meeting.

The premier, concluding the meeting, called on officials and builders to carry out the behests of Kim Il Sung and Kim Jong Il and certainly realize the noble intention of the Marshal to create the socialist fairyland in Sepho, Phyonggang and Ichon areas.

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Posted in Agriculture, Mongolia | Comments Closed

Sinuiju-Kaesong high-speed rail project (UPDATED)

Monday, April 7th, 2014

Sinuiju-Kaesong-high-speed-rail

Pictured Above (KBS):  A map of the planned high-speed rail project

UPDATE 4 (2014-4-29): The Choson Ilbo reports that Ms. Choi has returned from the DPRK:

The Organisation for Co-Operation between Railways (OSJD) has decided to hold two major meetings, the Commission on Freight Traffic in 2015 and Conference of General Directors in 2019, in Seoul.

KORAIL president Choi Yeon-hye made the announcement at Gimpo Airport on Monday after returning from an OSJD meeting in Pyongyang. It is unprecedented for an associate rather than full member to host the conference.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

“We don’t know yet whether the North will attend the meetings in 2015 and 2019, but the participants unanimously decided to hold them here, and the North didn’t oppose it, so we expect them to come,” she added.

The annual conference of general directors alternatively takes place in Asia and Europe, but exceptionally the 2019 meeting will also be held in Asia following the 2018 meeting in Vietnam.

The government here is keen to work with the railway body to link South Korea to Eurasia via North Korea.

Here is coverage in Yonhap.

UPDATE 3 (2014-4-22): The Choson Ilbo reports that the head of Korail has left for the DPRK:

KORAIL president Choi Yeon-hye is appropriately on her way to North Korea by train.

Choi left for Pyongyang on a train from Beijing on Monday afternoon to attend a meeting of the Organisation for Co-Operation between Railways (OSJD), KORAIL said Monday.

The OSJD is an organization of 27 former and current communist countries, including Russia, China and North Korea.

The government approved Choi’s request to visit to the North on Sunday after the North sent her a letter of invitation. She got a visa from the North Korean Embassy in Beijing the same day.

The train runs from Beijing to the North Korean border city of Sinuiju in 24 hours, where she switches trains for the 225 km stretch to Pyongyang.

A KORAIL executive said, “Choi’s visit is the North’s first approval of a South Korean official’s visit” since the South imposed sanctions against North Korea in 2010.

She is the first senior South Korean figure to visit Pyongyang since the inter-Korean summit in 2007.

President Park Geun-hye is keen to connect South Korea to Eurasia by railway, which requires cooperation from the OSJD.

Here is coverage in Yonhap.

UPDATE 2 (2014-4-7): KBS has a report (in Korean) on the project. See the report here. Seoul Village has translated some of the details.

Construction would last 6 years, with two waves that have not been fully detailed yet:
1st stretches: 80 km
From the North: Sinujiu Station – Tongrim Station (Sinujiu-Dongnim, 40 km)
From the South: Kaesong – Yonan (Gaesong-Yeonan, 40 km)
2nd stretches: 296 km

From the North: Tongrim – Chongju – Sinanju – Pyongyang (Dongnim-Jeongju-Sinanju-Pyongyang, 147 km)
From the South: Yonan – Haeju – Sariwon – Pyongyang (Yeonan-Haeju-Sariwon-Pyongyang, 149 km)

UPDATE 1 (2014-4-7): Korail may be involved in the high-speed rail project. According to the Hankyoreh:

News of a recent agreement between North Korea and China to build an international high-speed railroad and highway between Sinuiju (a city on the Chinese border) and Kaesong is raising questions about the fate of a scheduled North Korea visit on Apr. 24 by Korail CEO Choi Yeon-hye.

If Korail does participate in the project, it would bring South Korea one step closer to the Asian continent via the North Korea-China high-speed rail project, which comes on the heels on North Korea‘s Rajin-Hasan development project with Russia.

South Korean businesspeople in China who are closely involved in the high-speed rail project said on Apr. 6 that a contract for the railway/highway construction was signed in Beijing on Feb. 24 by North Korea’s State Economic Development Commission, chaired by Kim Ki-sok, and a Chinese consortium headed by the Shangdi Guanqun investment company. The line would be 376 km in length and connect Sinuiju with Chongju, Sukchon, Pyongyang, Haeju, and Kaesong, with the five-year construction beginning in 2018 with a budget of US$21 billion, or around 22 trillion won. The method would be a Build-Operate-Transfer (BOT) arrangement, with an international North Korean-Chinese consortium providing the investment and delivering the line to North Korea once the costs are recouped. A survey team for the Chinese consortium is reportedly scheduled to visit North Korea in late April.

The chances of South Korea participating are higher in the wake of President Park Geun-hye’s speech in Dresden on Mar. 31. There, she declared that an “organic linkage between South Korean capital and technology and North Korean resources and labor could contribute to building a future economic community on the Korean Peninsula.”

She also said she planned to “achieve shared development for the Korean Peninsula and Northeast Asia both through collaborations with North Korea and Russia, as with the current Rajin-Hasan distribution project, and collaborations with North Korea and China focusing on Sinuiju.”

Further increasing the possibility of South Korean participation are guidelines handed down in January by North Korean leader Kim Jong-un, who said North Korea should work with China and South Korea on an international line through a privately funded BOT arrangement.

Meanwhile, Korail is awaiting Ministry of Unification approval on a request to allow CEO Choi Yeon-hye to travel to North Korea to attend a general directors’ conference for the Organisation for Co-Operation between Railways (OSJD), which is scheduled to take place on Apr. 24.

“Our basic position is to approve visits to North Korea in cases of international events,” said an official from the ministry on condition of anonymity, adding that a final decision would be made “after discussions with the other agencies.”

But Korail remains cautious about the possibility of future cooperation, whatever the outcome for Choi’s visit ends up being. Speaking on condition of anonymity, a source there said, “We’re preparing data on things like a plan to expand cargo transport for different continental rail zones, which is one of the topics on the agenda at the OSJD meeting.”

“We’ve never officially examined the North Korea-China high-speed rail project, and it doesn’t look like it would be economically feasible anyway unless a section is opened between Seoul and Kaesong,” the source added. “Anyway, the government has not decided on participating, and that‘s not a matter that KORAIL can weigh in on by itself.”

ORIGINAL POST (2013-12-20): High Speed Rail and Road Connecting Kaesong-Pyongyang-Sinuiju to be Built
Institute for Far Eastern Studies (IFES)
2013-12-20

On December 8, 2013, North Korea reached an agreement with a consortium of international companies to construct highways and high-speed railroad connecting Kaesong, Pyongyang, and Sinuiju.

The agreement between North Korean authorities and a consortium representing the Chinese companies was signed in both Chinese and Korean by Kim Chol Jin, Vice-Chairman of State Economic Commission of North Korea and representatives from state-owned enterprises of China’s Commerce Department.

The construction period was designated as five years and businesses will operate the rail for 30 years and return the operation rights to North Korean government in the form of a BOT (build-operate-transfer) project, worth a total of 15 trillion KRW. The high-speed rail will be a double-track system with a speed of more than 200km per hour, and the construction of four-lane highway will be built adjacent to the railway. Fence will also be built to prevent unauthorized access to the railway.

The construction zone will cover the areas of Kaesong, Haeju, Sariwon, Pyongyang, Sinanju, Jongju and Sinuiju, approximately 400 km in total length and from Sinuiju will connect to Chinese cities via railway while from Jongju will connect with the Rajin-Sonbong SEZ (special economic zone) to the Russian Khasan railway to be linked with the Eurasian railway.

The consortium working group is planning to visit North Korea to confirm the specific construction plans. It was tentatively decided that the formal contract be signed in Pyongyang based on the proposal submitted by the consortium.

The subject of agreement is a multinational consortium of international investment group, which also includes a South Korean company, which is known as a company involved in North Korean mineral resources development. Once the project is in progress, there are plans of bringing other South Korean companies into the project.

In exchange, businesses will obtain the development rights of extracting gold from Hyesan City (Ryanggang Province) and iron ore in Musan (North Hamgyong Province). North Korean officials are claiming that this project was the legacy of Kim Jong Il and welcomed the participation of South Korean companies.

In March 2011, former North Korean leader Kim Jong Il is reported to have instructed that inter-Korean exchange programs be continued. Upon the completion of the railways and highways, the Presidium of the Supreme People’s Assembly will proclaim international road operations to ensure its stable operation.

The operation rights will be given to the consortium for 30 years while the ownership rights will be shared by the North Korean government and the consortium.

China is also building new railway lines up towards the North Korean border.

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Posted in China, Economic reform, Foreign direct investment, Railways, State Economic Development Commission (SEDC), Transportation | Comments Closed

DPRK – China trade: What is happening?

Friday, April 4th, 2014

Previous reports indicated that the execution of Jang Song-thaek has to date had little effect on DPRK-China trade. According to the Institute for Far Eastern Studies (2014-3-12):

Trade between North Korea and China in January has increased roughly 16 percent against the previous year. After the December 2013 purge of Jang Song Thaek it was predicted that trade between the two countries would decrease; however, there is no visible sign of this yet.

According to the Korean Foreign Trade Association’s* data, trade between North Korea and China in February increased from 471 million USD to 546 million USD, up 15.9 percent compared to the previous year.

February also showed an increase in anthracite exports, North Korea’s main export to China, rising 21.3 percent to 102 million USD. Iron ore exports also showed a slight increase of 35 million USD compared to last year.

Chinese exports to North Korea, including leading export commodities such as cellular phones and other wireless radio/communication devices, increased 28 percent compared to January of last year, totaling 14.5 million USD. In February, goods exported through China to North Korea increased by 10.2 million USD, a 38.6 percent increase compared to January of last year.

The trade gains in this report are annual for the most part…comparing 2013 data with 2014 data. This reveals little about the change in trade volume from month to month.

Now a story in Yonhap offers January and February 2014 data, and journalists have reached the opposite conclusion. Jang’s execution has played a role in DPRK-China trade. According to the article:

“In January and February this year, North Korea significantly stepped up checks on its coal exports to China,” a source in Beijing said on the condition of anonymity.

“Such reinforced checks appear to be related to the execution of Jang Song-thaek,” the source said.

According to the latest data by the Korea International Trade Association* in Seoul, North Korea’s exports of coal to China in February fell 26 percent from a month ago to 920,000 tons. The North’s exports of iron ore to China also fell 23 percent in February from a month earlier to 197,000 tons.

The North’s total trade with China in February plunged 46 percent from a month earlier to US$255 million, the data showed.

In Dandong, the Chinese border city with North Korea where about 80 percent of bilateral trade is conducted, the flow of goods in and out of North Korea appears to be affected by the execution of Jang.

“In previous years, the North Korean authorities had usually set their annual targets for exports and imports, and given quotas to trading firms,” said another source in Dandong who is doing businesses with North Korea. “But, no quota has been given yet this year.

“Obviously, the mood is different than previous years,” the source said.

No progress has been made on special economic zones, including Hwanggumphyong and Wihwa, set up by the North on the border with China, according to the source.

“Under the current circumstances, Chinese investors will not invest in the North’s special economic zones,” the source said.

Does this mean anything?  Well, we don’t know enough about these numbers, or the cause for such dramatic change in trade patterns, so we will need to continue to watch the data.  Even before the February numbers came out, Scott Snyder reminded us that DPRK-China trade has taken a dip between January and February for each of the last three years!

Snyder-DPRK-China-Trade-2011-2013

Then there are the caveats: 1. This only counts legitimate trade (no illicit, secret, or military trade) 2. No aid 3. No official or unofficial transfers 4. No capital flows.

*Presumably the Korean Foreign Trade Association and the Korea International Trade Association are the same thing.

Read the full Yonhap story here:
N. Korea’s trade with China shaken after Jang’s execution
Yonhap
2014-4-4

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Posted in China, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Statistics, Trade Statistics | Comments Closed

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