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Kim Il-sung sought discussions with US in 1974

Sunday, January 16th, 2011

According to the Korea Times:

The late North Korean leader Kim Il-sung proposed secret negotiations with Washington ahead of the assassination of then South Korean first lady Yuk Young-soo in 1974, according to a classified document dated June 6, 1974 from the U.S. Embassy in Senegal.

The revelation came after An Chi-yong, a former journalist based in the United States, posted the confidential dossier, classified as “secret,” on his website “Secrets of Korea,” Tuesday.

It reveals that the North’s founder, father of current leader Kim Jong-il, asked the late Senegalese President Leopold Senghor to deliver a secret message to the U.S. in 1974.

“President Senghor informed me on June 5 that during his recent visit to Pyongyang, Kim Il-sung charged him with a message for the United States government,” according to the dossier.

“Kim Il-sung said the DPRK (North Korea) would welcome secret negotiations with the USG (U.S. government) on the future of Korea.”

The suggestion was made two months before the assassination of the first lady on Aug. 15, 1974.

Yuk was shot by a Japan-born Korean believed to be a communist sympathizer and having acted upon orders from a pro-Pyongyang organization there.

The dossier also offers a glimpse of Kim Il-sung’s attitude toward Washington and Tokyo and his thoughts on the unification of the two Koreas.

“The North Korean leader told Senghor he felt the DPRK’s enemy in the Pacific is Japan, not us,” the document stated.

“What North Korea seeks is a confederation, not suppression of South Korea, and within that confederation, there would be a place for U.S. influence in the South.”

Another U.S. government document that cites a New York Times article by Richard Halloran reveals that Kim Il-sung may have sought a similar favor from the late Japanese Prime Minister Takeo Miki before the 1974 assassination.

“Halloran (NYT 8/10) says Kim Il-sung informed President Ford through Prime Minister Miki he wants to open direct talks with us to settle outstanding issues of Korea,” according to the dossier dated Aug. 11, 1975. “Wants us to send envoy to prepare agenda for talks with HAK (Henry A. Kissinger) on U.S. troop withdrawal, peace treaty to replace 1953 truce.”

The two Koreas remain technically at war as the 1950-53 Korean War ended in an armistice, not a peace treaty

It remains uncertain whether the communist North succeeded in holding bilateral talks with Washington.

A declassified U.S. document shows that Pyongyang continued its efforts to have dialogue with the U.S. even after the tragic assassination took place.

It says on Aug. 27 1974 an aide to then Romanian President Nicolae Ceausescu met with then U.S. President Ford at the White House to deliver a message from Kim Il-sung.

“The North Korean leadership wants to have confidential contact with the United States for discussions,” according to the declassified memorandum from President Gerald Ford’s files.

Yet, Ford’s response to the repeated proposal for talks was lukewarm.

“Certain things must precede such contacts. We don’t want to go in without a firm understanding,” the U.S. President was quoted as saying in the declassified documents.

Here is a link to the actual document.

Here is a link to “Secret[s] of Korea“.

Read the full story here:
NK proposed talks with US before 1974 assassination’
The Korea Times
Lee Tae-hoon
2011-1-11

Posted in Political economy, South Korea, USA | Comments Closed

ROK government encouraging DPRK restaurant boycott

Monday, January 10th, 2011

According to the Choson Ilbo:

Siem Reap, Cambodia’s second largest city near the sprawling ruins of the Angkor Wat, has two North Korean restaurants, down from three since North Korea recalled all their expat staff after Kim Jong-il’s stroke in 2008 and returned only the employees of two of them. The restaurants rely on South Korean tourists for business since the town is a popular destination for them.

One of them, called Restaurant Pyongyang, sells the famous cold noodles or naengmyeon for US$7 a dish, while North Korean dancers perform and pour drinks for customers. It used to be a regular stopover for South Korean tourists, with tour agencies charging $30 for a visit and a meal. One tour guide said, “In Cambodia $7 a dish is already pretty expensive, but many tourists go to the restaurant because of its attractions.”

After North Korea’s sinking of the Navy corvette Cheonan in March last year, the South Korean Embassy in Cambodia asked tour agencies and South Korean residents’ association there to avoid sending visitors from the South there, but local sources say the plea fell largely on deaf ears. But the North’s artillery attack on Yeonpyong Island in November last year finally did the trick. The South Korean residents’ association in Siem Reap voluntarily boycotted the North Korean restaurants, and tour agencies also voluntarily took them off their itinerary.

The restaurants are apparently suffering. A member of the South Korean residents’ association said, “Almost all of the customers were South Korean tourists, but it seems that even the performances have stopped now there are no customers.”

Around 120,000 South Koreans a year reportedly visited the two restaurants, contributing to an estimated W200-300 million (US$1=W1,126) in monthly sales. North Korea runs over 100 restaurants in China, Vietnam, Thailand, Laos and Russia, which serve as a source of much-needed hard currency for the regime by sending home $100,000-300,000 a year.

The mood in Siem Reap is now desperate. Last month, a placard outside a South Korean restaurant criticizing North Korea’s attacks were torn down by seven people who appeared to be North Korean agents, in what expats there believe was another small-scale North Korean provocation. Tour agencies are also losing revenues after taking the restaurants off their itineraries. “We used to charge $30 per visit and took 30 percent of the profits, but not any more,” a tour guide said.

South Korean residents’ associations abroad rarely voluntarily boycott North Korean restaurants. The Okryugwan chain of North Korean restaurants in Beijing’s Wangjing district is still accessible to South Koreans. A South Korean Embassy official there said, “We asked residents to avoid the restaurant in November but did not force them.”

Meanwhile, a North Korean restaurant in Kathmandu, Nepal closed down in November after its North Korean manager defected to South Korea.

Read the full story below:
N.Korean Restaurants Abroad Feel the Pinch
Choson Ilbo
1/10/2011

Posted in Cambodia, Finance, Fiscal & monetary policy, International Governments, Restaurants, Trade Statistics | Comments Closed

Australia’s ANL cited in DPRK weapons smuggling

Monday, January 10th, 2011

According to The Australian:

The use of an Australian-owned cargo ship to smuggle weapons from North Korea to Iran has been highlighted in a report to the UN.

It was one of several breaches of UN sanctions against Kim Jong-il’s regime detailed in a report to the Security Council.

The report, which was submitted to the council recently after months of obstruction from China, found the North was making $US100 million a year through illegal arms sales to Syria, Iran and Burma.

Pyongyang used shadowy webs of front companies, false manifests and complex routes to try to get around sanctions aimed at stopping its arms proliferation, the investigation found.

The report flags the 2009 interception of the ANL Australia in Sharjah as one of at least four occasions that North Korea was caught out exporting arms or defence equipment.

The report said weapons were seized from the ANL Australia in the United Arab Emirates on July 22, 2009.

The cargo is thought to have included up to 10 containers of arms, including rocket-propelled grenades and trigger mechanisms and propellant, although this is not detailed in the report.

The cargo was packed and sealed in North Korea and shipped to China, where it was loaded aboard the ANL Australia en route to Iran.

The Bahamas-flagged vessel was owned by ANL Container Line at the time.

ANL, once Australia’s national shipping line, was taken over by French company CMA CGM.

Despite the breach of sanctions, an Australian government investigation found ANL was not responsible because the ship was chartered by a foreign company at the time.

“The Australian government’s inquiries into this matter indicated that at all relevant times the vessel was not under the operational control of its owner, but was rather being chartered by a non-Australian company,” a Department of Foreign Affairs and Trade spokesman said.

“No conduct relevant to the shipment can be attributed to an Australian person or body corporate,” he said.

ANL declined to comment.

The report found that while no ballistic missile or nuclear-related materials emanating from North Korea had been intercepted since sanctions were applied, evidence suggested “continuing DPRK (North Korea) involvement in nuclear and ballistic missile-related activities in certain countries, including Iran, Syria and Myanmar (Burma)”.

“To supplement its foreign earnings, the DPRK has long been involved in illicit and questionable international transactions (including) the surreptitious transfer of nuclear and ballistic missile-related equipment, know-how and technology,” it says.

The panel received government reports suggesting North Korea had helped build Syria’s Dair Alzour nuclear facility (destroyed in 2007 by an Israeli attack) along with details of Japan’s arrest in June 2009 of three individuals trying to illegally export a magnetometer, a device with potential missile-related uses, to Burma.

The report cited in the story is the “Panel of Experts” report to the UNSC. You can read (and search) it here (PDF).

Read the full story here:
UN cites ANL in N Korea arms smuggling
The Australian
Rick Wallace
1/10/2011

Posted in Arms shipment, Australia, Finance, Fiscal & monetary policy, Illicit activities, International trade, Iran, Sea shipping, UN Security Council | Comments Closed

DPRK trade falls in 2009 – reliance on China remains high

Sunday, January 9th, 2011

According to Yonhap:

North Korea’s external trade fell in 2009 with its economic reliance on China staying significantly high, a report showed Sunday, underscoring the need for Pyongyang to diversify its industry structure and open its market for survival.

According to the report by the Korea Finance Corporation, North Korea’s total trade amounted to US$3.41 billion in the cited year, down 10.6 percent from a year earlier. The trade decrease was the largest since 1998.

Exports dropped 6 percent to $1.06 billion, while imports fell 12.5 percent to $2.35 billion over the same period, the report showed, bringing the North’s trade deficit to $1.29 billion.

With international sanctions in place for its nuclear ambitions and its reluctance to open up its economy, the North’s dependence on China stayed quite high at 80.4 percent in 2009, the report showed. Its trade deficit with Beijing totaled $1.1 billion.

The report said that the North should open its market and diversify its industry structure currently focused on producing weapons, while improving overall infrastructure such as power generation facilities, should it seek to revive its economy.

It also emphasized the need for resumption of inter-Korean trade and an increase in international aid for the North’s survival.

“For the North Korean economy to get back on track, inter-Korean trade has to be resumed and aid from the international community should also be expanded,” said an official of the state-run corporation.

South Korea’s economic relations with the North have remained frozen since Seoul cut almost all inter-Korean trade in May 2010 after it found Pyongyang was behind the deadly attack of its naval ship in March that killed 46 sailors.

The move led to a drop of around 30 percent in inter-Korean trade last year, according to the latest report by Seoul’s customs office. South Korea is one of the North’s major trade partners, although the two remain technically at war as their 1950-53 conflict ended in a truce, not a peace treaty.

If a reader can send me a link to the actual report, I would appreciate it.

The Los Angeles Times also covered the report.

Read the full story here:
N. Korea’s trade falls, reliance on China remains high in 2009
Yonhap
1/9/2011

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

Chinese to boost investment in Rason

Friday, January 7th, 2011

UPDATE 1 (2011-1-19): According to the Wall Street Journal:

A Chinese firm has signed a letter of intent to invest $2 billion in a North Korean industrial zone, representing one of the largest potential investments in Kim Jong Il’s authoritarian state and a challenge to U.S. policy in the region.

The agreement was signed with little fanfare in Pyongyang on Dec. 20—a day otherwise marked by pitched tension on the Korean peninsula following the North’s shelling of a South Korean island—according to documents viewed by the Wall Street Journal. Confirmation of the deal comes as Chinese President Hu Jintao visits Washington this week in a bid to forge closer security and economic ties with the U.S.

U.S. officials said the administration is aware of the possible Chinese investment, but noted that previous projects haven’t gone anywhere. “No investment project will enable North Korea to meet the needs of its people as long as its government continues its destabilizing behavior,” said a senior administration official.

The letter of intent involves China’s Shangdi Guanqun Investment Co. and North Korea’s Investment and Development Group. An assistant to the managing director of Shangdi Guanqun, who identified himself only by his surname, Han, said his company’s planned investment is focused on the Rason special economic zone, situated near North Korea’s border with Russia.

The zone was called Rajin-Sonbong when it was established in 1991, but failed to attract sufficient investment. It was revived, and re-named Rason, following a visit there in 2009 by Mr. Kim.

Mr. Han said the plan is to develop infrastructure, including docks, a power plant and roads over the next two to three years, followed by various industrial projects, including an oil refinery, over the next five to 10 years. He said the company was waiting for a response from the North Korean government before applying for approval from China’s Ministry of Commerce.

“It’s all pending at this stage, and it’s really up to the Korean side to make the decision,” Mr. Han said. He added that the $2 billion figure was what the North Korean side had hoped for, not necessarily what his company could deliver.

The company’s Web site says the company was “under the administration” of a state-owned enterprise, Shangdi Purchase-Estate Corporation. Mr. Han, however, said his company was “100 percent private.”

For the Obama administration, securing China’s cooperation in restraining North Korea’s military and nuclear-proliferation activities is a cornerstone of a warmer bilateral relationship. But the potential investment is a reminder of possible limits of Chinese cooperation.

The U.S. wants to step up sanctions to force Kim Jong Il to give up his nuclear-weapons arsenal and military activities. China, meanwhile, is increasingly promoting business projects and direct investment to influence the North, say Chinese and American analysts, arguing financial pressure hasn’t worked.

China is North Korea’s biggest trading partner and aid donor, but the scale of this deal raises concerns in Seoul that Beijing is running its own version of the “Sunshine” policy under which the South boosted investment in the North from 1998 to 2008.

This policy disconnect is expected to be one of the issues Chinese and U.S. officials discuss this week. “These types of deals pursued by China generally present a real challenge to the sanctions” being effective, said Victor Cha, a North Korea expert who helped oversee Asia policy in George W. Bush’s National Security Council. “The net effect is that it does make it more difficult for these sanctions to have the desired effect.”

Such deals have emerged in the past and have come to nothing, analysts said, and it is possible this one, too, could peter out. A number of similar North Korean economic zones have failed to live up to their billing because of poor infrastructure and corruption, and a lack of economic reform. News of the deal was first reported in the Korean-language press, including the Voice of America’s Korean service.

It is unclear how long the agreement has been in the works. But its Dec. 20 signing came on the day South Korea conducted a closely watched artillery test from Yeonpyeong Island near North Korea.

The test marked a high point in tensions after North Korea’s surprise late November shelling of Yeonpyeong, which killed four South Koreans. Pyongyang had threatened a swift military response should Seoul carry out an announced artillery test on Dec. 20. But the day’s drill came and went amid high security in the South, with the North saying in a statement it “did not feel any need to retaliate.”

Top administration officials have recently both praised and chided the Chinese over the North. On a trip to China last week, Defense Secretary Robert Gates commended the Chinese for their “constructive” role in reducing tensions on the peninsula after Pyongyang’s recent shelling of a South Korean island. Secretary of State Hillary Clinton in a Friday speech pressed China to be more aggressive in helping tamp down the North’s nuclear program.

The proposed investment is among the strongest evidence yet of China’s strategy of using direct investment rather political pressure to push for change in North Korea. Chinese experts say that after North Korea’s first nuclear test in 2006, China tried to make improved bilateral relations dependent on Pyongyang dismantling its nuclear program. But after a second test in 2009, China changed tack.

Beijing now believes, according to Chinese experts, that the North Korean regime won’t respond to political pressure and could collapse completely if China cuts off aid and investment, triggering a flood of refugees into northeastern China, and bringing U.S. troops right up to the Chinese border.

The investment strategy was cemented when China’s Premier Wen Jiabao visited North Korea in October 2009 and signed a slew of economic and trade agreements. One of those agreements was for China to fund construction of a $250 million bridge across the Yalu River that separates the two countries.

Construction of the bridge, which would link China with another North Korean special economic zone, had been slated to start in August. Local officials said in November it appeared to have been put on hold indefinitely. Now they say a ground-breaking ceremony was held Dec. 31.

U.S. officials are particularly concerned about how China’s financial links to North Korea may be facilitating Pyongyang’s weapons programs. In November, Pyongyang showed a visiting American scientist 2,000 centrifuges stationed at a cover site, drastically raising fears about the North’s ability to expand its nuclear-weapons arsenal.

“China’s increased economic support undercuts the rest of the region’s efforts to convince Pyongyang that there will be consequences for further belligerence, nuclear weapons development or transfer of nuclear capabilities,” said Michael Green, who also served as a senior official on Asia during the Bush administration.

Read the full story here:
Chinese Firm to Invest in North Korea
Wall Street Journal
Jay Soloman and Jeremy Page
2011-1-19

ORIGINAL POST (2011-1-7): According to the Joong Ang Ilbo:

A Chinese state-run company recently agreed to invest $2 billion in North Korea’s Rason free trade zone, the JoongAng Ilbo learned yesterday from documents related to the deal.

Shangdi Guanqun Investment Co., Ltd. signed a 10-point memorandum of understanding with Pyongyang’s Investment and Development Group on Dec. 20 in Beijing, the documents showed.

The signing ceremony was attended by Mi Chang, president of Shangdi Guanqun Investment, and Kim Chol-jin, president of the Investment and Development Group.

The goal of the investment, stated in the documents, is to build Rason, a northeastern North Korean city on the East Sea that borders both China and Russia, into the “biggest industrial zone in Northeast Asia” in around 10 years.

The project calls for coal-fired power plants, roads, piers and oil refineries in the North Hamgyong Province city, the documents said.

According to the documents, the deal is “a strategic joint project based on trust between high-level figures” in China and North Korea, which suggests it may have been negotiated by North Korean leader Kim Jong-il during two visits to China last year, on which he met Chinese President Hu Jintao.

The North’s economy has suffered under international sanctions on trade and financial services overseas, imposed after its nuclear weapon tests, and is desperately seeking foreign investment.

China is investing in Rason as an export base to serve markets in Japan, southern China and Southeast Asia.

Rason is a merger of two towns, Rajin and Sonbong, and was designated the first free trade zone in the North in 1991. It was promoted to a “special city,” which means it has fewer restrictions on businesses.

“We have a deep interest in North Korea’s ample natural resources,” an official of Shangdi Guanqun Investment Co., Ltd. told the JoongAng Ilbo. “To facilitate the export of natural resources [from the region], we will invest $300 million first and construct a coal-fire power plant at the coal mine and build a railway, roads, and harbors and piers [near it].”

The Chinese firm’s official said the company opened an office in Pyongyang at the end of last month.

Shangdi Guanqun Investment, established in 1995 by the Chinese government, is a trading firm specializing in oil processing, natural resources and international financial services. It is one of the key companies in China’s 12th five-year economic development plan that starts this year.

North Korea’s Investment and Development Group is in charge of developing the country’s four free trade zones. The other economic special zones are in Kaesong, Mount Kumgang and Sinuiju.

The Shangdi Guanqun Investment official said the company will build an oil refinery in Rason, where it plans to refine crude imported from the Middle East and Russia and sell the output to China or other countries.

I believe this Chinese story also relates to the same project.

Read the full story here:
China backs North’s Rason project
Joong Ang Daily
Ko Soo-suk
2011-1-7

Posted in China, Chosun International Development Trust Company, Economic reform, Foreign direct investment, hangdi Guanqun Investment Co., International trade, Korea Taepung International Investment Group (Daepung Investment Group), Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013), State Development Bank | 2 Comments »

New ROK firm begins Kaesong operations

Thursday, January 6th, 2011

According to Yonhap:

Despite persisting political woes, a new South Korean company has begun operating in North Korea’s border industrial complex that combines superior South Korean capital and know-how with the North’s cheap local labor, a government official said Thursday.

The company, known as DSE, completed building its factory in Kaesong in early May and is therefore exempt from the investment ban on North Korea that Seoul imposed later that month over the sinking of a South Korean warship, the Unification Ministry official said.

…

The ministry official, who spoke on customary condition of anonymity, said DSE began operating on Jan. 3 and is employing 160 North Korean workers, part of the 44,000 workforce in the Kaesong complex, to produce lighting apparatuses and other metallic products.

The number of South Korean companies operating in Kaesong now stands at 122, the official added.

…

South Korea has since sharply cut down on the number of its workers allowed to stay in Kaesong. The North, in an apparent act of desperation to revive its economy, has since called for lowering tension and holding cross-border dialogue. South Korean officials are demanding that the North first show “sincerity,” indicating Pyongyang must apologize for the series of provocations blamed on it.

Read the full story here:
New S. Korean company begins operating in N. Korean factory park
Yonhap
Sam Kim
1/6/2011

Posted in Economic reform, Foreign direct investment, Kaesong Industrial Complex (KIC), South Korea, Special Economic Zones (Established before 2013) | Comments Closed

DPRK art show in Moscow

Wednesday, January 5th, 2011

According to AFP:

A pony-tailed worker taps on a laptop while, not far away, rosy-cheeked children sport baseball caps. Both vistas are part of a rare exhibition of contemporary North Korean art, nowadays on display at a trendy Moscow gallery.

The exhibition, titled “Water Still Flows under Ice,” addresses such themes as World Cup football, new technology and Western fashion. It is running at Winzavod, a brick-walled former factory that usually hosts cutting-edge shows.

In one painting, children wearing T-shirts and baseball caps gaze at monkeys at a zoo.

In another, a female engineer with a helmet over her pony tail taps on a laptop. There’s no sign of any brand name.

None of the works have been shown before outside the isolated Stalinist state, organizers of the show said.

They called the exhibition “unprecedented” and “attempt to break the ideological ice.”

The art is “post-socialist realism,” said Winzavod gallery’s director, Sofiya Trotsenko, referring to the Soviet idea of carrying a political message to the masses through folksy scenes of socialist triumphs.

She stressed the exhibition, which opened this month and runs to the end of January, was not intended as propaganda, despite being endorsed by the North Korean government.

“This exhibition is not propagandizing anything,” Trotsenko told AFP. “We do not make any judgments. We just show [the art] and it’s your business to draw conclusions on what you see.”

Much of the art dates from 2009 and this year. A painting from 2009 shows North Korea’s football team wildly celebrating a win. It was presumably commissioned after the country qualified for the 2010 World Cup.

Titled “Winners,” it shows crowds cheering and footballers waving a giant national flag. In reality, North Korea took one goal against Brazil but then lost 7-0 to Portugal.

All the art comes from the Mansude studio in Pyongyang, the vast workshop of the most favored official artists, who create public art such as patriotic mosaics in the metro.

The organizers said they tried to select works that were not overtly political, however.

“We wanted to show domestic things, Trotsenko said. “We wanted specifically to show daily life.”

She said she got the idea for the exhibition after she visited North Korea as a tourist and went on an excursion to the art studio in Pyongyang.

“There isn’t a single portrait of the Great Leader. Everything here is about private life,” said one of the curators, artist Oleg Kulik.

“We thought it was interesting to do an exhibition that was not ideological,” Kulik added.

Nevertheless, scenes such as those featuring plump babies lying in a hi-tech maternity ward look unlikely in a country where it is feared that malnutrition has stunted generations.

Kulik, an outrageous artist best known for his naked performances as a dog, designed the exhibition’s layout, with pink neon lighting and an installation that shows army helmets hanging over a bowl of rice.

He called it “a metaphor for the condition of North Korea.”

Read the sull story here:
Official art from North Korea comes to Moscow
AFP
1/5/2011

Posted in Art, Russia | Comments Closed

Rason port facilitates intra-China coal distribution

Tuesday, January 4th, 2011

Click image to see the Chinese, Russian, and North Korean piers

UPDATE 5: No more intra-Chinese coal shipments through Rason have been reported following this 2011 experiment.

UPDATE 4 (2011-6-4): KCNA reports some additional details on the coal being shipped from Hunchun to Shanghai via Rason. According to the article:

It was against this backdrop that China was in the process of transporting 20,000 tons of coal to Rason Port via Hunchun from May 14 and then transporting it to Shanghai by a cargo ship.

Yanbian Ribao, conveying this news on May 18, reported that the Shanghai branches of the Hunchun Mining Group and the Chungjiang Group would transport 500,000 tons of coal to Shanghai by this method this year. This would be tantamount to more than 14,000 truck loads. An official concerned of the Mining Group said that transport of loads to various provinces of Southern China by this method would help sharply cut down the time and transport charges, etc. as compared with the inland transport.

So apparently the 20,000 tonne pilot project what supposed to pave the way for a 500,000 tonne project that never materialized.

UPDATE 3 (2011-1-25): China ships coal from North Korean port for first time. According to Michael Rank:

China has for the first time shipped coal from the North Korean port of Rajin following a deal by a Chinese company to renovate the port, a Chinese website reports.

The 20,000 tonnes of coal, mined in Hunchun, about 80 km north of Rajin, was shipped to Shanghai last month. After going through customs inspection at Hunchun, it was transported by road via the Wonjeongri border post near Dumangang, the report said.

It noted how shipping the coal from Rajin saved the cost of transporting it to the nearest suitable Chinese port of Yingkou or further afield by train and how the deal to renovate and expand Rajin’s no 1 dock would help to boost trade from northeast China more generally.

It said the Dalian-based Chuangli Group reached a deal to lease the dock in 2008 and the following year agreed to renovate it and expand its capacity to one million tonnes a year, although news was not announced until last spring.

But when this reporter visited Rajin last September there was no sign of the port being renovated and expanded, and although a couple of small North Korean vessels were moored at the port, there was little sign of any activity and the area was largely deserted.

China does have ambitious hopes for Rajin, however, and last month a Chinese company, Shangdi Guanquan Investment Co, was reported to have signed a letter of intent to invest $2 billion in an industrial zone in the region.

The Wall Street Journal quoted an assistant to the managing director to Shangdi Guangqun as saying the plan was to develop infrastructure, including docks, a power plant and roads over the next two to three years, followed by various industrial projects, including an oil refinery, over the next five to 10 years. He said the company was waiting for a response from the Pyongyang government before applying for approval from China’s Ministry of Commerce.

“It’s all pending at this stage, and it’s really up to the Korean side to make the decision,” the assistant, named only as Han, said, according to the WSJ. He added that the $2 billion figure was what the North Korean side had hoped for, not necessarily what his company could deliver.

North Korea has implausible dreams of turning the city into an international freight brokerage, export processing and finance hub, and has even made a computerised promotional video about its plans to build glitzy skyscrapers along the seafront.

Photo of Rajin port here.

UPDATE 2 (2011-1-14): According to Every China:

As the first cross-border cargo ship for domestic trade in China, 10,000 tonner “Jinbo”, loaded with 21,000 tons of coal, arrived safely at Shanghai and docked steadily at the pier of Waigaoqiao Terminal at 4 p.m. on January 14. This marked the success of the maiden sail for cross-border domestic trade in our nation.

It is introduced that this 10,000 tonner Jinbo is a freight ship serving for Hunchun Chuangli Shipping Logistics Co., Ltd. of Jilin Province. There was totally 20,000 tons of coal in this cross-border transport produced by Hunchun Mining Group, departing from Hunchun Quanhe Port on December 7, 2010 to Rajin Port of North Korea and cargo concentration in port was accomplished there after one month. Special purpose vessel Jinbo ship docked at No.1 pier of Rajin Port of North Korea at 15 o clock on January 6 this year. The shipment began on 7th and the ship departed from Rajin Port at local time 10:30 on January 11 and arrived safely at the pier of Waigaoqiao Terminal, Shanghai after over 3 days voyage. Currently, related procedures for customs and inspections are in process.

Successive notices on pilot cross-border domestic trade transport in Jilin Province have been issued by General Administration of Customs, Ministry of Transport and General Administration of Quality Supervision, Inspection and Quarantine of the People s Republic of China since last year. Now, the successful arrival of the first cargo ship at the destination is an important achievement gained by Hunchun City or even Yanbian Autonomous Prefecture from implementing the forerunning policy of The Planning Outline of Cooperation in the Exploitation of Tumen River Zone, China. It is also a significant breakthrough in new international land-sea joint transport passage of Hunchun City or even Jilin Province, marking a crucial progress in the Launching out to sea through borrowed port strategy of Jilin Province.

Not only the coal resource of Hunchun City, but also that of Heilongjiang Province, closely adjacent to Yanbian area, can be transported to South China after Rajin Port exit is available. Because of the relatively low transport cost compared with that of other ports at home, this sea passage may become the Golden Passage for transporting coal from the north to the south until then.

UPDATE 1 (2011-2-22): According to the China Daily:

A city in Northeast China is aiming to import coal from the Democratic People’s Republic of Korea (DPRK) as part of its effort to establish an international coal production base in the border area.

Hunchun, a city wedged between the DPRK and Russia, has coal reserves of 1.2 billion tons, and supplies the fuel to Jilin, Liaoning, Jiangsu and Shangdong provinces. It currently produces about 6 million tons of coal annually.

“We plan to raise our production to more than 10 million tons a year by importing and exploiting coal both from the DPRK and Russia,” said a senior Hunchun city official, who declined to be named.

In January, coal was shipped for the first time from Hunchun to Shanghai via the DPRK port of Rajin, following a deal made by a Chinese company to renovate that port.

The 20,000 tons of coal mined in Hunchun reached Shanghai in three days in the transportation trial. Normally, it takes more than 10 days to transport that amount of coal by train from Hunchun to Shanghai.

“We will try to deliver coal by this new shipping route in the future, because it saved a lot of money in transportation costs,” the government officer said.

The city government also intends to transmit the electricity power generated by its coal-fired power plant to the DPRK.

China has been striving to establish an international sea route through the two countries to boost bilateral trade.

Dalian-based Chuangli Group invested 30 million yuan ($4.6 million) in improvements to Rajin last year, according to officials.

The Dalian group expanded the port’s annual shipping capacity to 1 million tons last year, after reaching a deal to lease and reconstruct it in 2009.

Hunchun officials said the city’s foreign trade volume has quadrupled in the past three years, thanks to improved international shipping.

By taking advantage of cross-border energy production and transportation, Huchun expects its coal production to rise by 22 percent during the 12th Five-Year Plan (2011-2015).

The Seoul-based Yonhap News Agency reported earlier that the DPRK plans to cooperate with Chinese enterprises on exploiting mineral resources in Hamgyeongbuk-do in the DPRK, which has about 200 million tons in coal reserves.

ORIGINAL POST (2011-1-4): Rason is being used to transport coal from Hunchun to Shanghai. According to the Choson Ilbo:

In official confirmation that closer China-North Korea business ties have come to fruition, the state-run Xinhua news agency and local media in Jilin on Monday said China has transported 20,000 tons of coal from a mine in Jilin to Shanghai and Ningbo through North Korea’s Rajin-Sonbong Port since Dec. 7.

The coal produced in Hunchun was carried by some 570 35-ton trucks across the Duman (or Tumen) River and transported to the port along a 60 km unpaved road between Hunchun and Rajin-Sonbong.

A source in Hunchun said, “Since a month ago, dozens of trucks a day have been going to the North” through Quanhe Customs Office.

The abundant coal deposits in the northeastern China are mainly used for heating homes in southern China in winter, but with no access to the East Sea, China had to transport it overland to Yingkou Port in the Bohai Bay, some 800 km to the west, incurring logistical costs.

China has long tried to get the right to use Rajin-Sonbong and Chongjin ports in North Hamgyong Province in North Korea in a bid to secure an East Sea route.

In 2009, Chuangli Group, an environmental facilities manufacturer in Dalian, obtained the right to use a pier in the Rajin-Songbong port for 10 years in collaboration with a North Korean trading company. Another Chinese firm in Tumen is also reportedly seeking the right to use Chongjin Port.

Prof. Yoon Seung-hyun of Yanbian University said Chongjin Port, has better facilities than Rajin-Sonbong. “The North is more open and aggressive” because it is groaning under international sanctions and aid from South Korea has dried up, he added.

Recent posts on Rajin (Rason) can be found here.

Read the full story here:
Chinese Shipping Through N.Korean Port in Full Swing
Choson Ilbo
2011-1-4

Posted in China, Coal, Rason Economic and Trade Zone (Rajin-Sonbong), Sea shipping, Special Economic Zones (Established before 2013), Transportation | Comments Closed

DPRK trades steel for food

Tuesday, January 4th, 2011

According to the Daily NK:

North Korean trading companies operated by several organs have been selling steel to China in exchange for food.

One Chinese trader who does business with North Korea reported to The Daily NK on Monday, “China-based North Korean workers in charge of trading with China for Cheongusan Trading Company (under the Escort Command), say that this year Chosun is expanding the volume of its steel sales with China.”

The trader said, “In November last year, the analysis table of steel quality was delivered to us, and accordingly a contract has also already been signed.” He added, “In Chosun, the company is waiting for a permit to trade from an upper organ after having loaded materials on freight trains.”

He explained further, “For the price of the steel, Chosun has asked for rice, flour, noodles and also construction materials,” adding, “Food in bulk can enter Chosun.”

He explained that since North Korea is facing a serious lack of food, cement and other construction materials due to isolation from the international community, the country is trying to barter steel for food with China, from which the North is able to import.

Another trader in China verified the story, explaining, “Recently in Dandong, workers from Kangsung General Trading Company (under the General Staff) and other companies visited China for the purpose of selling steel.”

He added, “From now on, our company is going to do only steel trade with Chosun. We have decided not to do business in other things because our experiences have shown that there is no credit there.”

He went on, “North Korean trading units may have suffered from limitations put on items by Chinese companies,” going on, “If Chosun does not make a deal with us, they will starve to death this year. Even though they emphasize independent rehabilitation, when have they ever been rehabilitated?”

North Korea’s media frequently emphasizes the glorious production of “Juche” steel at Kim Chaek Steel Mill and Gangsun Steel Mill. Indeed, the Common Editorial issued on the first day of this year stated that, “By the power of the realization of the faith and model of Kim Steel (steel from Kim Chaek Steel Mill) and Juche steel, let’s have waves of victories.”

According to KOTRA, South Korea’s trade statistics agency, from January to October, 2010, North Korea exported steel to China worth $82 million.

One potentially positive aspect to this story is the recognition by the DPRK of the benefits of comparative advantage in trade. Rather than aiming to produce all of its own food, the DPRK can instead specialize in steel production and trade for Chinese produced food. Through trade, China and the DPRK could both consume more steel and food than if each country practiced autarchy. Unfortunately the DPRK’s recent history has demonstrated a callous disregard for comparative advantage and has instead focused on increasing domestic food production and aid while limiting international trade. Lets hope to see more rational policies prevail in the future.

Read the full story here:
North Korea Bartering Steel for Food
Daily NK
Im Jeong Jin
1/3/2011

Posted in Cheongusan Trading Company, China, Food, International trade, Manufacturing, Steel | Comments Closed

“Bend It” shown [edited] on DPRK TV

Thursday, December 30th, 2010

According to the New York Times:

But on Sunday, The Associated Press reported, North Korean television audiences were given a rare break from this routine when the British comedy “Bend It Like Beckham” was shown there. The film, which stars Parminder Nagra as a young woman from a Sikh family with dreams of soccer stardom; Keira Knightley as her best friend; and Jonathan Rhys Meyers as the dreamy coach they both have eyes on, was shown over the weekend by the arrangement of the British Embassy. According to the BBC, a message was shown during the film saying that the broadcast was done to mark the 10th anniversary of diplomatic ties between North Korea and Britain.

In a message on his Twitter account, Martin Uden, the British ambassador to South Korea, wrote: “Happy Christmas in Pyongyang. On 26/12 Bend it like Beckham was 1st ever western-made film to air on TV.” The A.P. said the North Korean broadcast of the two-hour movie was only an hour long, so please, no spoilers about the film’s subplots about religion and sexuality, or which of the women Mr. Rhys Meyer’s character ultimately chooses.

UPDATE from a Koryo Tours newsletter:

In 2004 Koryo Tours together with Ealing Studios and the British Embassy screened the film Bend it Like Beckham at the Pyongyang International Film Festival, it was seen by over 12,000 Pyongyang citizens and was the film they raved about…during the festival we were inudndated with requests for tickets from the Yanggakdo hotel staff. During the film the coach tells the heroine of the film to make a decision about her life…and this was translated as her following the Juche way!

In 2009 Koryo Tours was asked by the British Embassy in Pyongyang to assist with ideas for marking 10 years of diplomatic relations- and football was what we came up with. In October 2010 we took Middlesbrough Women’s football team to play two local Korean sides (to a total of 14,000 fans and nationwide tv broadcast) and on Boxing Day the film Bend It Like Beckham was broadcast in Pyongyang- and that is a massive ‘first’ with everyone in Pyongyang talking about it!

Our colleague Hannah Barraclough is working on bringing over the April 25th women’s team in 2012 to play in Europe. If you want any details or have any ideas on how to help with this project please let us know.

Here is a link to the ambassador’s Twitter feed.

To be honest, I am not sure about the claim that it is the first western-made film shown on DPRK TV. I know that the Bonner/Gordon film The Game of Their Lives was shown unedited on DPRK television, though it is about the DPRK and they were involved in the filming. Tom & Jerry is on DPRK TV to this day, though it is not a film. Titanic was shown in DPRK cinemas. Any other examples?

Read the full story here:
North Korea Gets a Special Kick Out of ‘Bend It Like Beckham’
New York Times
Dave Itzkoff
12/20/2010

Posted in Civil society, Television, United Kingdom | 1 Comment »

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