North Korean Economy Watch

According to Yonhap:

A Hong Kong conglomerate is likely to be tapped as a developer of a China-North Korea joint industrial complex on a North Korean island, a Chinese-language weekly said Monday, a move seen as deepening the North’s economic reliance on its neighboring country.

Earlier this month, China and North Korea broke ground to develop Hwanggumphyong Island, which sits at the estuary of the Yalu River between two border cities, Dandong on the Chinese side and Sinuiju on the North’s side.

The Economic Observer, one of the leading economy-focused newspapers in China, said it has exclusively obtained a document showing that Sunbase International Holdings Ltd., an investment conglomerate based in Hong Kong, will win exclusive rights to develop the border island.

The group, which reportedly has direct control over total assets of over HK$60 billion (US$9.3 billion), is recognized as one of the largest property management companies in Hong Kong and mainland China.

Gunter Gao, chairman of the board of Sunbase International, visited North Korea twice last year and had high-level meetings with North Korean government officials on the economic development of the island, the report said.

The newspaper earlier reported that the 56-year-old Hong Kong tycoon met Kim Yong-nam, president of the Presidium of the North Korean Supreme People’s Assembly, before the groundbreaking ceremony of the joint economic zone. Gao is widely considered to have strong ties with politicians in mainland China.

Gao has long served as one of the Hong Kong members of the National Committee for Chinese People’s Political Consultative, a political advisory body in mainland China.

Citing unnamed sources, the weekly said the North Korean authorities preferred Hong Kong entities rather than mainland Chinese firms as developers of the joint economic zone because Hong Kong companies are more open and international.

The economic cooperation between China and North Korea comes on the heels of North Korean leader Kim Jong-il’s weeklong trip to China in May when he studied the neighboring country’s economic development. It was his third trip to China in just over a year.

Beijing has been trying to lure its impoverished ally to embrace the reform that lifted millions of Chinese out of poverty and helped China’s rise to become the world’s second-largest economy.

North Korea has been facing worsening food shortages and massive inflation, which has increased public anger in the country.

Read the full story hre:
Hong Kong conglomerate likely to be tapped as developer of N. Korean island: report
Yonhap
Kim Young-gyo
2011-6-20

Imports from North Korea: Existing Rules,Implications of the KORUS FTA, and the Kaesong Industrial Complex
Mark E. Manyin, Coordinator, Jeanne J. Grimmett, Vivian C. Jones, Dick K. Nanto, Michaela D. Platzer, Dianne E. Rennack
Congressional Research Service (CRS)
June 2, 2011

Download the PDF here.  This publication has been added to the list of previous CRS reports on the DPRK here.

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Trade with China 1995-2009
Nathaniel Aden
Nautilus Institute
June 7, 2011

View the paper here.  A link to this paper has been added to the DPRK Economic Statistics Page. The Nautilus Insitute has also posted links to some very interesting presentations from the 2010 DPRK Energy and Minerals Working Group.

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[Book] The Contemporary North Korean Politics: History, Ideology, and Power System (현대 북한의 정치: 역사, 이념, 권력체계)
Jong Song-Jang (정성장)
More information TBA, but see here and here (Korean).

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[Book] Architekturführer Pjöngjang (German: Pyongyang Architecture Guide)
Philipp Meuser
Order here at Amazon. More here and here.

Andrei Lankov writes in the Korea Times:

The present author was born in the former Soviet Union and is frequently asked which period of Soviet history the current North Korea is reminiscent of?

I usually say that this question has no straightforward answer. The problem is that depending on what area you look, the associations are remarkably different. The developments in North Korea are not that different from those of the USSR, but in different areas the time seems to flow with a different speed.

North Korea’s official ideology and propaganda continues to be uncannily similar to late Stalinist Soviet culture, to the period of the late 1940s. The North Koreans are still served the same fare of ossified Leninism and strong nationalism, heavily spliced with eulogies to the leaders’ wisdom and benevolence.

It appears as if North Korean propaganda, as well as its official ideology, has been frozen in time since the late 1960s. One can take an article from Rodong Shinmun of, say, 1972 and then compare it with an article published yesterday only to find no major differences in language, style and reasoning.

At the same time, the general mood among educated urban North Koreans is quite similar to the mood which prevailed among the same social milieu in Moscow and Leningrad of the 1960s. People are still afraid to talk politics and most of them do not entertain serious doubts about the fundamentals of the system. They tend to believe that their economic problems have been created by a combination of natural disasters, collapse of the ‘socialist markets’ and, of course, an economic blockade maintained by the greedy U.S. imperialists and their shameless lackeys.

However, very few educated North Koreans nowadays buy the official propaganda message wholesale. They know that the official media lies, and sometimes lies quite shamelessly. While being more or less loyal subjects of their state, they entertain significant (and growing) skepticism about its institutions and the official pronouncements of its leaders.

It seems that social fear, once powerful and omnipresent, is diminishing. The North Korean state remains highly repressive, but the level of repressiveness is in steady decline. Nowadays North Koreans can do many things which would almost definitely have landed them in prison some 20 years ago ― in some cases, even mildly critical statements about the system are now tolerated.

Of course, open dissent is still unthinkable, but genuine enthusiasm is almost impossible to find. This is a picture, clearly reminiscent of the USSR of, say, year 1965 (albeit the North Korean state remains far more repressive than the Soviet Union used to be during Brezhnev’s rule).

The economic situation is different again. In economic terms, present day North Korea is similar to Russia in the early 1990s, the turbulent days that followed the collapse of the Soviet Union. At that time a large number of the Soviet people discovered that their official salaries would not suffice if they wanted to stay alive, so they began to look for additional sources of income. Ex-Soviet officials busily stole state property, whilst less lucky commoners relied on an assorted variety of small businesses, household workshops and subsistence farming.

This is very similar to present-day North Korea, even though the collapse of the socialist economy in North Korea led to far more damaging consequences than was the case in Russia –after all North Korea experienced a disastrous famine, while few if any Russians starved to death in the early post-Soviet period.

In North Korea, the collapse of the state-run economy and rationing system plunged a majority of the population into the world of the grass-roots market economy. No reliable statistics are available, but researchers tend to agree that roughly three-quarters of average household income in North Korea is now derived from private economic activities of different kinds.

Like their early post-Soviet peers, North Korean officials are always on the lookout for a nice bribe. They also don’t mind quietly transforming state property into their own personal property– many North Korean enterprises ostensibly still owned by the government are actually private nowadays. Meanwhile other North Koreans sell, buy, smuggle, farm unofficial plots, run individual workshops or find employment with such workshops.

So, we have a curious picture. Ideology still pretends that almost nothing has changed in the last 50 years (it’s telling that the official media has never mentioned the market economy, as if it doesn’t exist). The political consciousness is less dominated by the state, but still remains under its control.

However, the North Korean state has almost completely lost control of the economic life of its people. This picture has no parallels in the history of the Soviet Union or, for that matter, in the histories of other ex-communist countries, even though all its elements (if taken separately) would appear familiar to the people with Soviet-era experience.

Read the full story here:
Comparison of NK and USSR
Korea Times
Andrei Lankov
2011-6-19

UPDATE 2 (2011-6-19): According to Yonhap, a researcher at the Congressional Research Service (CRS) asserts the goal of Executive Order 13466 is to essentially facilitate ratification of the KORUS FTA by preventing the importation of goods made in the Kaesong Industrial Zone into the United States:

A recent executive order issued by U.S. President Barack Obama is partly aimed at banning the imports of products made at an inter-Korean industrial park in Kaesong, a North Korean border town, ahead of the ratification of a free trade pact with South Korea, a Congress-affiliated researcher said Wednesday.

Dick Nanto, a specialist in industry, trade and foreign affairs with the Congressional Research Service (CRS), noted that the April executive order prohibits the direct and indirect entry of North Korean goods.

“The Treasury Department’s Office of Foreign Assets and Control said goods, services and technologies from North Korea may not be imported into the United States directly or indirectly without license,” he said at a forum hosted by Korea Economic Institute.

He said the wording “indirect” was inserted in consideration of Congress’s objection to the inclusion of Kaesong products in the South Korea-U.S. free trade agreement, or KORUS FTA.

“That includes any country — China, South Korea — any country that uses a product of North Korea in the process or as part of the process,” Nanto said.

UPDATE 1 (2011-4-19): Haggard and Noland have a good discussion on the EO.

ORIGINAL POST (2011-4-19): First of all, here is the Executive Order:

Executive Order — Prohibiting Certain Transactions with Respect to North Korea

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United Nations Participation Act of 1945 (22 U.S.C. 287c) (UNPA), and section 301 of title 3, United States Code, and in view of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006, and UNSCR 1874 of June 12, 2009,

I, BARACK OBAMA, President of the United States of America, in order to take additional steps to address the national emergency declared in Executive Order 13466 of June 26, 2008, and expanded in Executive Order 13551 of August 30, 2010, that will ensure implementation of the import restrictions contained in UNSCRs 1718 and 1874 and complement the import restrictions provided for in the Arms Export Control Act (22 U.S.C. 2751
et seq.), hereby order:

Section 1. Except to the extent provided in statutes or in licenses, regulations, orders, or directives that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the date of
this order, the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited.

Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 3. The provisions of Executive Orders 13466 and 13551 remain in effect, and this order does not affect any action taken pursuant to those orders.

Sec. 4. For the purposes of this order:

(a) the term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States;

(d) the term “North Korea” includes the territory of the Democratic People’s Republic of Korea and the Government of North Korea; and

(e) the term “Government of North Korea” means the Government of the Democratic People’s Republic of Korea, its agencies, instrumentalities, and controlled entities.

Sec. 5. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the UNPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.

Sec. 6. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 7. This order is effective at 12:01 a.m. eastern daylight time on April 19, 2011.

Here is the text of the letter to Congress:

TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE

April 18, 2011

Dear Mr. Speaker: (Dear Mr. President:)

Pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), I hereby report that I have issued an Executive Order (the “order”) that takes additional steps to address the national emergency declared in Executive Order 13466 of June 26, 2008, and expanded in Executive Order 13551 of August 30, 2010.

In 2008, upon terminating the exercise of certain authorities under the Trading With the Enemy Act (TWEA) with respect to North Korea, the President issued Executive Order 13466 and declared a national emergency pursuant to IEEPA to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula. Executive Order 13466 continued certain restrictions on North Korea and North Korean nationals that had been in place under TWEA.

In 2010, I determined that the Government of North Korea’s continued provocative actions destabilized the Korean Peninsula and imperiled U.S. Armed Forces, allies, and trading partners in the region, and warranted the imposition of additional sanctions, and I issued Executive Order 13551, expanding the national emergency declared in Executive Order 13466. In Executive Order 13551, I ordered blocked the property and interests in property of three North Korean entities and one individual listed in the Annex to that order and provided criteria under which the Secretary of the Treasury, in consultation with the Secretary of State, may designate additional persons whose property and interests in property shall be blocked.

The United Nations Security Council, in Resolutions 1718 and 1874, requires Member States to take certain measures to prevent, among other transactions, the importation of certain goods and services from North Korea. The sanctions contained in Executive Order 13551 strengthen the implementation of these Resolutions.

I have issued the order today to further address the national emergency with respect to North Korea and ensure implementation of United Nations Security Council Resolutions 1718 and 1874. The order also complements executive authorities under section 73 of the Arms Export Control Act to ensure that all imports from North Korea are consistent with the import restrictions described in that provision, even when relevant designations under that provision are not in effect. To accomplish these goals, the order prohibits the direct or indirect importation of goods, services, and technology from North Korea. Unless exempt, all imports into the United States from North Korea must be authorized.

The order leaves in place all existing sanctions imposed under Executive Orders 13466 and 13551.

I have delegated to the Secretary of the Treasury the authority, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the United Nations Participation Act as may be necessary to carry out the purposes of the order. In particular, this delegated authority may be used to establish a process to consider licenses for imports from North Korea that are consistent with the purposes of the order.

The order is effective at 12:01 a.m. eastern daylight time on April 19, 2011. All executive agencies of the United States Government are directed to take all appropriate measures within their authority to carry out the provisions of the order.

I am enclosing a copy of the order I have issued.

Sincerely,
BARACK OBAMA

According to the Wall Street Journal:

Monday’s order further expands on an executive order imposed in August 2010 (pdf), and another in 2008. Both remain in effect under this order. In a letter to the House Speaker and the president of the Senate, Obama said the order prohibits the direct importation of goods, services or technology from North Korea.

“Unless exempt, all imports into the United States from North Korea must be authorized,” the letter says.

The goal of the latest executive order is to further implement two United Nations Security Council resolutions, 1718 and 1874, which tasked member states to prevent certain transactions and imports from North Korea. The latest issuance sends a signal that the prior orders weren’t enough, however.

Treasury is tasked with coming up with rules on how to enforce the sanctions and issue import licenses under the order. It went into effect at midnight Tuesday.

The US Treasury also blacklisted another North Korean bank. According to Reuters:

The U.S. Treasury on Tuesday imposed sanctions on North Korea’s Bank of East Land over transactions with a blacklisted North Korean arms maker that it said has exported torpedoes to Iran.

The Treasury said the action was taken under an August 2010 White House executive order that aims to thwart North Korea’s arms trade, luxury goods imports, narcotics trafficking and money laundering.

The move seeks to freeze any Bank of East Land assets that may be under U.S. jurisdiction and bans U.S. entities from transactions with the institution, also known as Dongbang Bank.

The Treasury has fought a long-running sanctions battle against illicit activities of the North Korean government, including its alleged manufacturing of high-quality counterfeit $100 bills known as “supernotes.”

“Bank of East Land is a major conduit for facilitating North Korea’s conventional arms trade,” David Cohen, the Treasury’s acting under secretary for terrorism and financial intelligence, said in a statement.

“Today’s designation exposes North Korea’s efforts to circumvent sanctions to conduct illegal activities and degrades its ability to abuse the international financial system,” Cohen said.

The Treasury said Bank of East Land has facilitated transactions for Green Pine Associated Corp, a North Korean arms manufacturer and exporter that was previously placed on the U.S. sanctions list. It said Green Pine produces submarines, military boats and missile systems and has exported torpedoes and technical assistance to Iranian defense-related firms.

In 2007 and 2008, the bank also facilitated transactions involving Green Pine and two blacklisted Iranian financial institutions, Bank Melli and Bank Sepah, the Treasury said. The Iranian state banks previously were sanctioned under an executive order aimed at curbing Iran’s nuclear and missile development efforts.

In 2005, the Treasury blacklisted a small bank in Macau, Banco Delta Asia, which cut off Pyongyang’s primary conduit to the international financial system at that time. The move was separate from sanctions aimed at curbing North Korea’s nuclear program but added pressure on the reclusive communist regime to bring it back to multilateral nuclear talks.

Here is the US Treasury Department’s North Korea sanctions page.

UPDATE (2011-6-23): Today the Nautilus Institute sent out more interesting resources on the state of the DPRK’s forests.  Check them out below:

“Forest and Other Biomass Production in the DPRK: Current Situation and Recent Trends as Indicated by Remote Sensing Data”
Power Point Presentation by  Seung-Ho Lee (June 2006)

“Unbearable Legacies: The Politics of Environmental Degradation in North Korea”
Peter Hayes, August 30, 2009

ORIGINAL POST (2011-6-17):

Pictured above (Google Earth): A North Korean propaganda slogan on a mountain-side urging “Let’s plant more trees!”

This should be nothing new to regular readers of this site, but according to a recent article by Yonhap:

Deforestation in North Korea is taking place at a rapid pace as people cut down trees for fuel and turn forest into farmland, a report by a state think tank here said Friday.

An average of 127,000 hectares of forest in North Korea have been destroyed on average every year for the past two decades, the Korea Forest Research Institute (KFRI) said in the report based on data by the United Nations Food and Agriculture Organization.

I have not been able to locate the report on the KFRI web page.  If any readers are able to locate it, please send it to me.

An earlier report found that in two adjacent biosphere reserves across the border of China and North Korea, over one half of primary forest landscapes have been deteriorated by exploitive uses, including seed harvesting and systematic logging.

You can read a number of previous posts on similar topics here: Ministry of Forestry, Forestry, and Lumber.

Yonhap has published a short article on the difficulties of analyzing North Korean trade data.  According to the article:

Data on North Korea’s trade with other countries is scarce, and there are stark contrasts in recent estimates from South Korea and the International Monetary Fund (IMF) in terms of both volume and composition.

North Korea’s imports and exports, excluding those with South Korea, reached US$4.17 billion last year, according to a report published last month by the South’s state-run Korea Trade-Investment Promotion Agency (KOTRA). The North’s trade with China — its chief ally and benefactor — amounted to some $3.5 billion, or 83 percent of the reclusive state’s total trade with other countries, the report said. Inter-Korean trade, meanwhile, reached $1.91 billion in the same period.

The findings were based on an analysis of annual trade reports filed by countries that deal with North Korea, as Pyongyang does not provide its own economic data.

The IMF, however, estimates North Korea’s total trade volume at 5.91 billion euros ($8.39 billion) last year, about double KOTRA’s figure, according to a recent report by the Voice of America (VOA), which cites the European Commission. The IMF estimates North Korea’s trade with China at some $3.9 billion, which is similar to KOTRA’s estimate, but accounts for a much smaller proportion of the total volume at 46 percent.

These figures are also based on data from North Korea’s trade partners, but appear to include some of these countries’ exports and imports with South Korea, according to experts.

The IMF’s estimates may be affected by errors in distinguishing the North from the South, while KOTRA’s South Korean staff are able to filter out many of these mistakes, the experts said. The trade agency’s figure may also be smaller because it relies on official data from governments, while the IMF collects its material from a wide range of sources.

“We do not reflect figures that we do not see as normal trade, such as foreign aid or under-the-table transactions,” a KOTRA official said on the condition of anonymity.

Back in February, Marcus Noland had this to say about KOTRA trade statistics (in regards to the % of the DPRK’s trade comprised of transactions with China):

The canard’s origin is in the odd way that the official (South) Korea Trade-Investment Promotion Agency (KOTRA) reports data on North Korean trade.  KOTRA excludes trade with South Korea, the North’s second largest trade partner after China, from North Korean international trade figures, treating these cross-border exchanges as “domestic.” (Funny, I’ve never noticed a minefield separating Maryland and Virginia or encountered heavily armed guards manning the Texas-Oklahoma border.) Then, to compound matters, KOTRA seems to have stopped following some of North Korea’s trade with Middle Eastern countries. The explanation could be budget cuts; there is also speculation that it is politics—dovish South Korean governments were reluctant to report North Korean involvement with dodgy Middle East regimes; or it could be general disinterest.  Whatever the reason, the breadth of KOTRA’s coverage of North Korean trade in the Middle East has dropped considerably, further exaggerating China’s prominence.

…

The upshot is that there is a huge divergence between the figures produced by KOTRA and those derived from UN and IMF data.

Read the full story here:
S. Korea, IMF differ over volume of N.K. trade
Yonhap
2011-6-17

According to the Korea Herald (h/t L.P.):

A number of economic cooperation projects appear ready to take shape between North Korea and China.

A businessman here claimed the North and China have signed a more concrete agreement last year following up on a 2005 preliminary deal to jointly develop an offshore oil field.

“The North has agreed with China to jointly develop an offshore oil field in the waters off Nampo,” a western coastal town, said Kim Young-il, chief executive of a South Korean trading firm and inter-Korean trade adviser to the Korea International Trade Association.

“The North Korea-China agreement on joint development of the oil field seems to have taken place last year.”

It is estimated that some 20 billion tons of crude oil is buried under the Bohai Gulf continental shelf which stretches across the Korea Bay between the North Pyongan Province and China’s Liaoning Province, Kim said during a policy debate session hosted by a legislator.

“The joint exploration would be economically viable because, once about a third of the oil reserve can be extracted, they can extract between 7 and 8 billion tons, enough to meet China’s entire demand for nearly 30 years,” Kim said.

Read the full story here:
Communist allies seek strategic interests
Korea Herald
Kim So-hyun
2011-6-1

Pictured above (Google Earth): Kangso Mineral Water Processing Factory (Google Maps)

According to the Hankyoreh:

Former DD Trading Chairman Lee Dae-sik, 74, still has trouble sleeping when he thinks about the events of the past few years. In that time, he has had to shut down an effort in the North Korea that was earning 4 to 5 billion won ($3.7 million to $4.6 million) in annual sales just a few years ago, as a result of the Lee Myung-bak administration’s hardline policy against North Korea.

“At the time I was investing in North Korea, we had the Inter-Korean Exchange and Cooperation Act, and I never dreamed they would halt North Korea projects. Now the government will not let us do an effort it granted approval for, something we had been doing consistently. It is just…”

During an interview with the Hankyoreh at a cafe in the Hawolgok neighborhood of Seoul’s Seongbuk District on Tuesday evening, the day before the eleventh anniversary of the June 15 Joint Declaration, Lee was too overcome with emotion to finish his sentence. He is one of the many South Korean businesspeople who have suffered as a result of the government’s restrictions on trade with North Korea. According to a January-February survey of companies engaged in North Korea efforts, the 104 companies that responded sustained an average loss of 3.9 billion won ($3.6 million) as a result of the May 24 measures restricting inter-Korean trade.

Lee is a first-generation North Korea entrepreneur who has been engaged in trade with the country since the Kim Young-sam administration in 1994. Originally the operator of a shoe factory in Busan, Lee struggled with the competition of cheap labor in China and Northeast Asia and searched for a change before finally taking the leap into North Korea. At first, he imported Pyongyang soju and agricultural products like bracken, balloon flower roots, and pine mushrooms.

“After the June 15 summit in 2000, the North Koreans grew more flexible in their attitude and became easier to deal with,” he recalled.

Lee, who steadily expanded the range of his operations over the years, began an effort in 2005 with Pyongyang’s Kangso Yaksu. This mineral water, North Korean National Treasure No. 56, is naturally carbonated and contains minerals like calcium and iron. After securing exclusive sales rights from North Korean authorities, Lee completed construction on a production plant the next year at an investment of 3 billion won. According to the conditions of the contract, Lee sent the cost of the water and the raw materials for the bottles, along with caps and labels, and the North Koreans operates the factory and sent the water produced.

“We imported it to South Korea under the brand name of ‘Gangseo Cheongsan,’ and sales increased from an initial level of 100 thousand to 200 thousand bottles a month to 300 thousand to 400 thousand bottles a month,” he said.

But stormy clouds appeared on the horizon when the Lee Myung-bak administration took office in 2008. As inter-Korean relations grew chilly due to the shooting death of a South Korean tourist at Mt. Kumkang in July of that year and North Korea’s missile launch and nuclear test in April and May of 2009, respectively, the Lee administration placed restrictions on contact with North Korea by civilians.

“When you apply for contact with North Korea, the government tells you to ‘please refrain from doing so,’” Lee said. “They say ‘please refrain,’ but who is going to refuse a request from the government? They are basically telling you, ‘Don’t do it.’”

The decision left Lee unable to send the promised payment and bottle materials to North Korea and to receive the water. One day, a fax came in from North Korea. It notified Lee that the contract was null and void, as he had not supplied the raw materials or collected the water produced. “We had ten or so employees, and they all went their separate ways,” Lee sighed. “Fifteen years of work in North Korea, and all I have left now is a pile of debt.”

“North Korea said it would sell China the water produced at the facilities I invested in,” Lee added.

“Even so, they told me they would restore my rights if I am able to work again like before, so I really hope the inter-Korean trade restrictions are lifted right away so that I can do business freely.”

Read the full story here:
Losses continue for businesses engaged in inter-Korean trade
Hankyoreh
Park Byong-su
2011-6-16

According to Xinhua:

Maritime authorities in China and the Democratic People’s Republic of Korea (DPRK) on Wednesday launched their first joint patrol on the Yalu River, located on the border of the two countries.

The action, aimed at maintaining navigation order along the river, was conducted by Maritime Safety Administration of Dandong City, China’s northeastern Liaoning Province, and its counterpart in DPRK’s P’yonganbuk-do.

Three vessels from China and two vessels from the DPRK inspected about 92 km along the river and cleared ships and fishing boats hindering the normal flow of ships around the river’s Dadong Port, according to the Dandong Maritime Safety Administration.

In April this year, maritime authorities of the two countries signed a cooperative agreement on the management of the Yalu River. In the agreement, the two sides vowed to conduct joint patrols and rescue on the river.

Read the full story here:
China, DPRK launches first patrol on Yalu River
Xinhua
2011-6-15

Institute for Far Eastern Studies (IFES)
NK Brief 2011-6-13

Kim Jong Il has made four official appearances from May 28 to June 3 since his last visit to China, starting with industrial facility inspections. This could be construed as North Korea’s attempt to highlight current facility-building projects and the superiority of its leadership in improving the people’s economy, and to rally the North Korean people.

Kim commemorated his recent unofficial visit to China by attending a celebratory performance. In a speech, he commented on the outcome of the visit and encouraged solidarity and morale building of its people.

On his return from China, Kim provided field guidance at the construction site of Huichon Power Plant. He called for the early completion of the plant as an essential step in resolving North Korea’s chronic power shortage. Specifically, Kim commented, “Resolving the power shortage is the major task in order to build a strong and prosperous nation . . . . appropriate units must ensure timely production of facilities, equipments and materials.” Kim is reported to have visited the construction site of Huichon on five occasions from September 2009 to December of last year.

In addition, Kim visited a fish breeding institute and Kosan Fruit Farm, encouraging the pursuit of technology development projects through modernization and scientific advancement.

At the fish breeding institute, Kim called for the improvement of the ecological environment of the fishery and for the increase in fish production by constructing more fish farms and by advancing the facility in a way that meets the demands of industrialization and modernization.

Similarly at the Kosan Fruit Farm (located in the Gangwon Province), production was stressed once again as an important task. Kim called for the improvement in fruit production through modernization and the integration of science and technology. This was Kim’s third visit to the farm since 2008.

Kim’s official visits this year are slightly fewer in number compared with the same period of time last year: from 70 visits in 2010 (19 military-related, 29 economic-related, 6 foreign-related, 13 other activities), to 60 visits in 2011 (13 military-related, 28 economic-related, 6 foreign-related, 13 other activities) in 2011.

All major DPRK news outlets covered Kim’s recent visit to China. The Politburo of the Workers’ Party of Korea Central Committee organized a meeting calling for the strengthening of DPRK-China relations. Likewise, the Presidium of the Supreme People’s Assembly praised the current DPRK-China economic cooperation activities and growing friendship between the two nations.