Businessmen in China told RFA’s Korean Service that until recently, the North’s leadership had largely kept to its rule of allowing trade officials to work abroad only once during their tenure as part of an effort to limit exposure to the outside world.
“The [practice of] ‘revolving door personnel allocation’ is prevalent in North Korea,” said one merchant surnamed Li from the city of Dandong in northeastern China’s Liaoning province, which is located on the border between the two countries.
But he said that an increasing number of North Koreans who had just recently returned from assignments in China were being sent to the neighboring country again in an official capacity.
“A North Korean trade representative who had worked in Dandong five years ago returned [to China] as a representative working in Beijing, which was surprising,” Li said, adding that he had never encountered a North Korean official who had served in the country on more than one occasion.
Another Chinese merchant surnamed Wang, who is currently living in North Korea, confirmed that more officials were being sent to China multiple times.
“Recently there are an increasing number of North Korean representatives who have repeatedly been dispatched abroad, although they are working in regions different from those where they had previously been posted,” Wang said.
One source suggested that Pyongyang may be continuing to rely on officials who have already served abroad in order to leverage their existing experience dealing with China’s trade sector.
He said that when the North Korean government requires an urgent trade agreement, it has become more willing to use officials with experience because training new personnel would be too time-intensive.
But another source said that the prompt resolution of trade negotiations is not the regime’s driving motive behind redeploying officials abroad.
“It’s not because the North Korean government needs an urgent resolution to trade matters, but simply because the officials who have previously worked abroad are lobbying so hard to be re-dispatched,” the source said.
Read the full story here:
North Korea Redeploying Officials Radio Free Asia
Joon Ho Kim
2013-1-30
North Korea imported significantly less grain and fertilizers from China last year, mainly due to improvements in overall food conditions in the country, local sources said Tuesday.
Kwon Tae-jin, a research fellow at the Seoul-based Korea Rural Community Corp., said data compiled from January through November showed North Korea’s grain imports from its neighboring country reaching 257,931 tons.
This represents a 26.8 percent decrease from 352,282 tons tallied for the same 11 month period in 2011.
“There was a noticeable drop in various grain imports last year,” the researcher said, adding that imports of corn and rice fell 19.2 percent and 16.7 percent vis-a-vis the year before, with wheat and bean purchases declining 56.2 percent and 7.4 percent, respectively.
The latest data also showed Pyongyang importing 252,780 tons of chemical fertilizers from China up till November, down 28.8 percent from 355,023 tons reported from the year before.
Experts in the South said the decrease reflected improvements in overall food supply in the communist country brought on by the new leadership paying more attention to the economy.
Read the full story here:
N. Korea’s grain, fertilizer imports from China fall sharply Yonhap
2013-1-22
China’s Ministry of Commerce reportedly sent about 70 specialists to North Korea to provide “joint consulting” services for Rajin and Hwanggumpyong and Wihwa Islands joint special economic zones (SEZs).
According to Yonhap News, about 70 specialists from the Department of Commerce of Jilin Province were dispatched to North Korea a few months ago to work on the China-DPRK joint venture projects. Their main focus is to discuss the management and legal systems of the SEZs, promotion of foreign investment, and share over 30 years of China’s experience on opening and reform.
The Department of Commerce of Jilin Province is directly under the Commerce Ministry. Chinese officials are going between Rajin, Sinuiju (near Hwanggumpyong and Wihwa Islands), and Pyongyang areas to negotiate on specific management measures concerning the SEZs.
Since Vice Chairman of the National Defense Commission (NDC) Jang Song Thaek visited China in August 2012, the two countries have reached an agreement and established joint management committee in Rason and Hwanggumpyong and Wihwa Islands. Since then, briefing sessions have been hosted in major Chinese cities to promote investment in North Korea.
Many speculated that joint management committees would be established in both zones.
A recent article in North Korea’s economic journal Kyongje Yongu (October 30, 2012), outlined general types of SEZ management: management-led, public enterprise management, cooperative management, joint venture, and contract-based management committees. Government-led management committee was referred to as the most common form.
Currently, the Kaesong Industrial Complex is jointly operated by North and South Korea by a management committee. However, one drawback to this system is that the high government involvement places enormous constraints on the activities of investing companies.
China, on the other hand, is trying to reduce North Korea’s intervention in the management process of the SEZs. China is also shying away from adopting a management committee-led form of management.
Meanwhile, the seventh meeting of the DPRK-China Intergovernmental Cooperation Committee on Economics, Trade, and Science and Technology was held in Pyongyang on January 9, where an agreement on economic and technology cooperation was signed. At a subsequent ceremony, the two sides also signed an agreement for the construction of administrative office buildings in the Rason and Hwanggumpyong SEZs.
The DPRK-China Intergovernmental Cooperation Committee on Economics, Trade, and Science and Technology began in March 2005 and has held one to two meetings each year to promote bilateral economic cooperation.
North Korea is tightening surveillance of the population using tens of thousands of Chinese-made surveillance cameras. According to Chinese customs data, the North imported a total of 16,420 CCTV cameras worth about US$1.66 million from China from January to November last year.
In 2009, the first year China published statistics on bilateral trade, the North imported a whopping 40,465 surveillance cameras from China. In 2010 the figure was 22,987 and in 2011 22,118. Altogether the North has imported over 100,000 cameras worth about $10 million.
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Meanwhile, crude oil and oil products were the major products the North imported from China between January and November last year with a total value US$526 million. Next came naphtha products ($101.7 million), cargo trucks ($92.2 million), and flour ($58.8 million).
Read the full story here:
Chinese Cameras Help N.Korean Regime’s Surveillance Choson Ilbo
2013-1-14
North Korea’s crop imports from China plunged 62 percent in October from a year earlier, data showed on Saturday, spawning speculation Pyongyang’s crop yield was not hit as hard by floods this year as was predicted.
According to the data compiled by the Korea Rural Economic Institute (KREI), North Korea imported 22,331 tons of crops such as flour, rice, corn and bean in October from its neighboring country, compared with 59,369 tons a year earlier.
The October figure was also down 38 percent from the previous month, according to the data.
In the first 10 months of the year, the North imported a total of 239,325 tons of crops from its strongest ally, also down 23 percent from the 310,106 tons a year earlier, the data showed.
The data followed projections North Korea’s crop yield would plunge this year, due mainly to unfavorable weather conditions that swept the country in late-summer, exacerbating the chronic food shortage in the poverty-stricken nation.
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North Korea imported a total of 376,431 tons of crops from China last year, following 313,694 tons in 2010 and 203,390 tons in 2009, according to the data.
Read the full story here:
NK’s crop import from China dip 62% in October
Yonhap (via Korea Times)
2012-12-1
North Korea has focused on developing Rajin Port, located in the North Hamgyong Province, with the aim of attracting foreign investments.
China and Russia have already secured usage rights to these ports and Mongolia has expressed itsinterest in this endeavor. This indicates a rising popularity and competition to use these ports.
Mongolian parliamentary speaker, Zandaakhuu Enkhbold,met with the DPRK’s Supreme People’s Assembly Chairman and Korean Workers’ Party Secretary Choe Tae Bok on October 19 on his four-day visit to Ulan Bator, the capitol of Mongolia. The officials from both countries agreed on the future possibilities of bilateral trade and cooperation in the fields of information technology and human exchanges. Mongolia is landlocked and expressed interests in cooperating for port leaseswhile Chairman Choe expressed enthusiasm in cooperation in harbor, coal, and mining industries.
The day after the two leaders met, Choson Sinbo, Pyongyang’s mouthpiece in Japan, directly reported on the results of the talk, exposing North Korea’s positive reaction to leasing ports to Mongolians. According to the newspaper, “Rajin Port is the most convenient sea route for Mongolia.”
Mongolia’s and North Korea’s bilateral cooperation on Rajin Port has been received positively as it fits the economic interests of these two countries. For Mongolia, they are interested in exporting coal and other underground resources overseas, as the country is rich in underground resources such as coal, copper, gold, and uranium. However, these resources arecostly to export since Mongolia has to rely on Chinese and Russian railway systems.
Once it is able to obtain lease rights to the Rajin Port, Mongolia should be able to significantly reduce itsshipping costs. Thus far, Mongolia has exported coal mainly to China, but may intend to diversify exports to other countries once it is able to use the port at Rajin.
Furthermore, once freight trains between Hassan in the Far East region of Russia and Rajin begin to operate, it will make it possible for Mongolia to transport coal directly to Rajin Port.
North Korea is most likely to lease Pier No. 2 and Sonbong Port to Mongolia, which are currently not being usedby China or Russia.
More importantly, North Korea is turning to South Korean participation in the development of future Rajin Port development. Choson Sinbo reportedin an article on October 21 (under the title, “Hwanggumpyong and Rason”)that “We (North Korea) sincerely want North and South to cooperate for mutual prosperity through communication and join forces to advance economic cooperation larger than neighboring countries.”
Once inter-Korean relations improve and South Korea joins China, Russia, and Mongolia in the development of Rajin Port, other economic cooperation between these five countries is likely.
A shipment of graphite cylinders usable in a missile program and suspected to have come from North Korea was found in May aboard a Chinese ship en route to Syria in what appears to have been a violation of U.N. sanctions, diplomats said Tuesday.
South Korean officials seized the shipment of 445 graphite cylinders, which had been declared as lead piping, from a Chinese vessel called the Xin Yan Tai, U.N. Security Council diplomats told Reuters on condition of anonymity.
South Korean authorities stopped the ship at the South Korean port of Busan, the envoys said, adding that the cylinders were intended for a Syrian company called Electric Parts.
South Korean officials informed the Security Council’s North Korea sanctions committee about the seizure on Oct. 24, the envoys said, adding that China had offered to help investigate the circumstances surrounding the incident.
“It appears the cylinders were intended for Syria’s missile program,” a diplomat said.
“China assured us they will investigate what looks like a violation of U.N. sanctions.” Diplomats said the graphite cylinders appeared to be consistent with material usable in a ballistic missile program and that South Korea would investigate the case with China.
The shipment to Syria was arranged by a North Korean trading company, diplomats said. One diplomat said the Syrian company that was to have received the cylinders may be a subsidiary of the North Korean trading firm.
North Korea is barred from importing or exporting nuclear and missile technology under U.N. Security Council sanctions imposed on Pyongyang because of its nuclear tests in 2006 and 2009.
North Korea imported US$170,000 worth of firearms from Switzerland in the first half of this year, Seoul’s trade agency said Friday.
The communist country brought in about $100,000 of guns such as shotguns, air and gas rifles, and revolvers while importing around $70,000 worth of firearm components, according to the report by the Korea Trade-Investment Promotion Agency, or KOTRA.
The state-run agency said the North had no record of firearm imports from Switzerland since 2009 until last year when it started to ship them in the first half.
Some experts said the new trend may be due to the fact that North Korean leader Kim Jong-un spent his adolescence in the country.
Read the full story here:
N. Korea imports US$170,000 of firearms from Switzerland Yonhap
2012-10-26
Recently, eight companies in the Kaesong Industrial Complex (KIC) informed that they received tax collection notices, a unilateral decision made by the North Koreans.
The Ministry of Unification and KIC reported that out of the 123 companies, 8 companies were informed by the North Korean authorities to pay about 160,000 USD in total in taxes.
Two companies out of the eight notified companies already paid close to 20,000 USD to the North Korean tax authorities.
On top of taxation, 21 companies were notified to submit additional tax documents. This may be to collect additional information for future tax collection purposes.
The tax authorities are also requiring companies to submit documents related to show proof of purchase of raw materials, and submit cost analysis documents and a copy of bank statements showing the history transactions.
Last August, the Central Special Direct General Bureau (CSDGB) notified the Kaesong Industrial District Management Committee of new tax bylaws, which enforces a fine up to 200 times the amount of accounting manipulation and abolish the retroactive taxation system while increasing the number of documents for submission. Furthermore, the North is threatening to restrict access to the KIC, if companies fail to pay owed taxes or do not submit requested documents.
In addition to imposing fines for tax frauds, new tax bylaws demanded by the CSDGB included enforcement of additional taxes in the name of corporate income tax, sales tax, and other taxes.
The unilateral decision by the CSDGB to amend bylaws is a violation of Kaesong Industrial District Law, which requires any revision of the laws must be negotiated between the North and the South. Another problematic issue is that tax imposed on the companies is based on North Korea’s own estimation rather than tax reports submitted by the companies of the KIC.
For the first time last year, tenant companies in the KIC recorded an average operating profit of 56 million KRW, finally operating in the black after years in deficit.
Despite the global economic slowdown, more than 6,000 business representatives from 20 countries signed agreements on more than 200 cooperative projects. Some 72 of the largest projects have a total combined value of $1.26 billion.
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During the 11th Five-Year Plan period (2006-2010), total trade value between Dandong and DPRK amounted to $3 billion. Imports and exports between Dandong and the DPRK reached $1.86 billion in 2011.
So far, trade between Dandong and DPRK accounts for 40 percent of total China-DPRK trade, and the volume of the cross-border cargo trade via Dandong port makes up 80 percent of the total Sino-DPRK trade volume.
UPDATE 4 (2012-10-16):Xinhua reports on the closing of the expo:
The five-day 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, held in the border city of Dandong, concluded on Tuesday with 72 agreements of cooperation intent signed. They have a combined value of 1.26 billion US dollars.
Pan Shuang, vice mayor of Dandong, said more than 6,000 Chinese and overseas people from over 20 countries and regions exhibited at and attended the expo. There were talks on 200 projects.
He said the projects related to industries ranging from aquaculture, clothes manufacturing, chemical production, wind power generation equipment, iron steel production to hotel construction.
AT THE EXPO
At the exhibition, the DPRK delegation exhibited ginseng products, food specialties, hand-made Hanbok, a traditional Korean costume, as well as mining and machinery equipment.
Ri Yong Chol, sales manager of Korea Roksan General Trading Corp., which is a ginseng supplier, said “I came to look for Chinese friends and potential business partners. Our company is also seeking opportunities to set up a subsidiary in China to get better access to the Chinese market.”
A Korean girl wearing brightly-colored Hanbok and traditional ornaments was selling costumes. “Our factory can make 20 such hand-made Hanboks a day. The clothes are for important occasions with exquisite workmanship and high-quality material,” she said.
Liu Songyu, chairman of a Korean garment firm from Yanbian Korean Autonomous Prefecture of Jilin Province, was interested in the business.
“Chinese labor costs have been rising fast. In Yanbian, a garment-factory worker’s salary has risen to 2,000 yuan (319 US dollars) a month. While, if the company had a factory in DPRK, it would save a considerable amount on labor costs. I would give a serious thought to that,” he said.
Yanbian is a heavily Korean ethnic populated region in China, where people also wear Hanbok during important occasions.
Elsewhere, Huang Zijun, an authorized dealer of Total Petrochemcial, was overwhelmed to obtain 20 orders from the DPRK delegation during the expo.
“I felt their enthusiasm in promoting business at the expo. I believe the DPRK is a big market for petrochemical products like lubricating oil,” he said.
An economic, trade, culture and tourism expo jointly initiated by China and the Democratic People’s Republic of Korea (DPRK) opened Friday in the border city of Dandong in northeast China’s Liaoning Province.
A delegation of 500 members from the DPRK is attending the 2012 China-DPRK Economic, Trade, Culture and Tourism Expo, which is scheduled to run from Friday to Tuesday, the event’s organizers said.
Over 400 Chinese companies from 12 industries are also attending the expo.
With the theme of “friendship, cooperation and development,” the expo consists of commodity exhibitions, trade fairs, DPRK art performances, craftwork exhibitions, a border trip to the Yalu River and an exhibition for the tourism resources of the two countries.
Supported by the China Council for the Promotion of International Trade, the event is being organized by the Liaoning Provincial Government.
China is DPRK’s biggest trade partner. Statistics show that bilateral trade volume went up 62.4 percent year on year to 5.64 billion U.S. dollars last year.
A source from Dandong described the unusually vibrant scene to Daily NK yesterday, saying, “The North Korean authorities have mobilized companies from Pyongyang and from here in China to sell goods and pitch for joint venture opportunities. There are loads of people; it’s standing room only.”
The source added that North Korean companies attending the event are pushing very hard to attract investment; notably, by distributing their own promotional literature expounding upon the given company’s superior virtues and providing exact contact details for follow-up inquiries. It is not hard to find meetings continuing in local North Korean eateries, as the North Korean side tries to woo potential sources of capital.
Chinese companies are keen to hear about the joint venture opportunities available, the source also said; and with most of the larger enterprises from China’s three northeastern provinces sending representatives to Dandong for the event, which runs until the 16th, most of the city’s hotels are apparently full to bursting.
However, due to past and present cases of lip service being paid to contractual obligations by North Korean companies whose only goal has been to attract funding rather than build business, Chinese representatives are still very cautious about actually signing on the dotted line.
One such representative from a Dandong-based company with a 10-year history of doing business with North Korea pointed out to Daily NK, “We have seen countless examples of companies making contracts and then there being little contact between the partners thereafter. Unbelievably, one manager I tried some minerals business with last year just changed the name of the company and came back again this year.”
UPDATE 1 (2012-6-7): The expo appears to have been pushed back to October 2012. According to KBS:
North Korea and China will jointly hold a fair on economy, trade, culture and tourism in the Chinese border city of Dandong for five days from October 12th.
A Dandong-based newspaper reports that this will be the first comprehensive fair covering several fields that the two countries hold. The paper said the fair will exhibit products, offer trade consultations, hold cultural and art performances and introduce both nations’ tourist attractions.
Roughly 400 Chinese companies exporting to North Korea will participate in the event. About 100 North Korean companies and cultural troupes will partake.
Dandong is China’s largest base for trade with North Korea, with 70 percent of its trade with North Korea running through the border city.
Read the full story here:
N.Korea, China to Hold Joint Industrial Fair in October KBS
2012-6-7
ORIGINAL POST (2011-12-3): Dandong to host Sino-DPRK economic and cultural expo. According to Xinhua:
The northeastern Chinese city of Dandong, which borders the Democratic People’s Republic of Korea (DPRK), will host a Sino-DPRK economic, trade and cultural exposition in June next year, a local Chinese official said Saturday.
A series of activities, including a commodity fair, investment and trade talks, tourism exhibition and arts exhibition, will be staged during the exposition, said a spokesman with the Publicity Department of the Dandong Municipal Committee of the Communist Party of China.
The Phibada Opera Troupe of the DPRK, an artists group well known to Chinese people, will give performances during the event, he said.
Adam Cathcart took the time to send me this interesting link to the official Dandong web page. It contains some videos (in Chinese) in which local officials promote the changes they expect to come to this city as it transitions into a regional trade hub.
Below I have added some links to recent blog posts that a re related to Dandong:
