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North Korea strengthens internal travel restrictions to keep the coronavirus in check

Friday, February 28th, 2020

By: Benjamin Katzeff Silberstein

Daily NK  has reported on the travel restrictions inside the county before, as this blog has covered here and here. This recent report goes into greater detail:

“The No. 2 departments in local Ministry of People’s Security [MPS] offices are placing further restrictions on the issuing of travel documents, and the authorities are cracking down on vans shuttling people around for money,” a Kangwon Province-based source told Daily NK today.

“No. 10 sentry posts [managed by the Ministry of State Security, or MSS] are cracking down on buses and other vehicles moving people. Even local police stations have setup temporary checkpoints to conduct crack downs on vehicles transporting people,” the source added.

It seems like we’re not talking about a blanket ban on travel across provincial borders per se. Rather, the state is banning and heavily restricting certain forms of transportation, especially unauthorized kinds (which otherwise are often  tacitly tolerated, not least through institutionalized bribery). This, too, impacts market trade since the transportation sector is crucial to shuttling goods around the country.

The authorities are thoroughly preventing any vehicles or people from transiting from the border region to the interior of the country and the other way around, sources told Daily NK.

Sources said that anyone who has entered the country from abroad but doesn’t have a document certifying they have been tested for the coronavirus are restricted from travelling. Merchants without proper travel documentation are also reportedly being targeted by the authorities. Even work units involved in construction projects are being restricted from moving around, sources said.

[…]

No. 2 departments in local MPS offices are restricting the issuance of travel documents to everyone unless they are on government orders, Daily NK sources further reported.

Even factory officials who need to travel to other places of the country to collect raw materials have been told to wait until “later” (after the COVID-19 crisis passes over), sources said.

The authorities are also carefully checking container trucks and the baggage compartments of buses for people hitching a ride in these hidden spaces, they added.

There are gaps, however, in the lock down on travel that the authorities are trying to implement.

“Some vehicles, including taxis, are cleverly selecting routes to avoid checkpoints,” the Kangwon Province-based source said.

“People are wearing masks just to avoid getting stopped by the authorities,” he added.

The border regions are of course especially targeted. The state knows it cannot fully close the border shut and thus needs internal controls to be forceful. The mention of certification of testing is interesting and implies that there are ways individuals can take action to test themselves. Perhaps it refers to the medical test teams reportedly dispatched to the border to China.

“There are a lot of ‘storm troopers’ in Kangwon Province who hail from all over the country, which means there’s a lot of people moving around,” the Kangwon Province-based source said. “The authorities can’t completely shutdown the province from the outside because the shock troops need to move supplies into the area for construction projects, but they are setting up multiple check points to block as much traffic as they can.”

The state still needs to continue running its daily affairs, and it’s unclear to what extent construction projects and other things that may be hampered by internal controls have been put on hold. This must be a bureaucratic nightmare to coordinate and often, one hand of the state doesn’t know what the other is doing.

Article source: Kang Mi Jin, “N. Korea further strengthens restrictions on domestic travel,” Daily NK, 27 February 2020, accessed 28 February, 2020.

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Posted in Black markets, China, Coronavirus, Economic reform, General markets (FMR: Farmers Market), Health care, International trade, Transportation | Comments Closed

How the coronavirus may impact the North Korean economy (Updated 18/2/2020)

Thursday, February 13th, 2020

By: Benjamin Katzeff Silberstein

Yesterday (February 12th), North Korea announced it is prolonging its self-imposed isolation to protect the country from the coronavirus. KCNA:

The spread of the epidemic comes to be a serious problem with the possibility of international disaster.

In this regard, the Non-Permanent Central Public Health Guidance Committee of the DPRK discussed the issue of prolonging the isolation period and strictly enforcing it in order to completely cut off the inroads of Covid-2019 and ensure the life of the people and safety of the state, and submitted it to the Presidium of the Supreme People’s Assembly

The Presidium of the Supreme People’s Assembly of the DPRK examined, approved and decided the proposal of the Non-Permanent Central Public Health Guidance Committee according to the law on prevention of epidemics.

According to the decision urgently adopted at the SPA Presidium, the isolation period in the territory of the DPRK shall be prolonged to 30 days for the time being.

All the institutions and fields of the state and foreigners staying in the DPRK should obey it unconditionally.

The KCNA website doesn’t allow for direct links, but the above was published on February 12th at their website. The country’s quarantine seems to amount to a near-total shutdown of cross-border traffic. So far, North Korea has not confirmed any deaths from the virus, but sources from inside the country have claimed that at least a handful of people have died from the virus. It seems highly doubtful that these sources could know for sure that the coronavirus, and not regular pneumonia, was the cause.

The government’s measures are rather stern, but a border shutdown is perhaps the most reasonable measure the government can take since it doesn’t have the resources to properly monitor the situation inside the country. KCNA also reported on February 12th that the local Red Cross “organized training courses for Red Cross volunteers and sent them to relevant areas.” A press statement (not on their website) from the Red Cross confirms this and says that the “Red Cross has also sent volunteers on bikes to these remote areas to share coronavirus awareness messages.” (Updated Feb 15 2020 with link to the press statement.)

How is all this impacting the North Korean economy? We don’t know for sure, but here are some possibilities:

The markets appear to be under a great deal of pressure. The border trade shutdown isn’t exactly total, as items such as fuel is likely still coming through pipelines. Certainly, some other goods are getting through as well, we just don’t know how much. But most consumer goods are kept out, and the authorities are even cracking down heavily on smuggling that it usually turns a blind eye to, resulting in drastic price rises over the past few weeks. According to some reports, perhaps exaggerated, economic activity is at a virtual standstill along the border. Prices have not reacted this strongly to any sanctions-related measures throughout “maximum pressure”, or really any international event that I can recall. All this points to the border closure measures being seriously and strictly enforced. The ban on tourism is also a significant blow to the economy. Tourism from China has been growing steadily as a source of income for the past few years and it’s a particularly crucial revenue stream of foreign currency at a time when many others have dried up in the wake of sanctions.

In addition to the international border crossing, the government has also banned travel between regions inside North Korea, to prevent the virus from potentially spreading through the country. One has to assume that this ban is at least as strictly enforced as the one on the Chinese border. If so, internal market trade may well be  severely hampered, as traders can no longer easily move goods between regions. This would obviously be a big problem, particularly for agricultural goods but also for the manufacturing sector. The North Korean market economy, which a majority of North Koreans are in some way dependent upon for their consumption, needs a well-functioning transportation network to operate with even a minimum level of efficiency. It is no coincidence that transportation as a sector has gone ahead of many others in North Korea’s marketization process. The government has now reportedly instituted price controls. These are unlikely to be respected perhaps even in the short run, and certainly will not be in the longer run. More traders will sell on the black markets, which will grow perhaps beyond any scope they’ve been since the early 2000s when the state began incorporating the markets into the official system.

One North Korean source quoted by Radio Free Asia puts the government’s dilemma regarding the virus and the economy brutally but clearly:

According to the third source, the poor are angry that the rich care about their health, but don’t seem to care if they have eaten.

“They say they might die from a disease, but they could also die from starvation because they are unable to make enough money to support themselves for a day,” said the third source, adding that the working class say there is no difference between the two because they are dead either way.

At the end of the day, there will come a time when keeping the border shut and domestic travel and transportation paralyzed just won’t be worth it or even possible, at least without massive humanitarian aid coming in to compensate. Something will have to give eventually, and when it does, the real challenge of virus containment may truly begin.

Update 18/2/2020:

Reuters reports that North Korea seems to be planning to hold the Arirang mass games by August, counting on the virus crisis to have eased by the summer:

The Mass Games are due to return on August 15, which is celebrated as Liberation Day on the anniversary of Japan’s defeat at the end of World War Two, Young Pioneer Tours, which runs tours to the North, said in a statement.

Despite the name, the Mass Games are large performances involving tens of thousands of dancers, gymnasts, martial artists and singers acting out familiar propaganda themes.

Another firm, Koryo Tours, quoted sources in North Korea as saying the games were expected to be held over major holidays, perhaps starting on August 15 and including October 10, the 75th anniversary of the founding of the ruling Worker’s Party of Korea.

No further details were known, and tickets are always sold on site rather than in advance, said Koryo Tours general manager Simon Cockerell.

“Tourists still can’t enter North Korea but when the virus issue dies down the border will open again,” Cockerell told Reuters. “It’s a reactive policy, so it will depend on what happens in China, basically.”

North Korea revived the Mass Games in 2018 to sell an image of international engagement and peace while raising much-needed foreign currency.

Source: Josh Smith, “North Korea looks to hold ‘Mass Games’ this year despite coronavirus fears: tour companies,” Reuters, 18/2/2020.

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Posted in China, Coronavirus, Disease prevention, Epidemics, General markets (FMR: Farmers Market), Health care, International trade | Comments Closed

North Korea’s coronavirus border shutdown: “Nobody is to come into contact with Chinese people”

Wednesday, February 5th, 2020

By Benjamin Katzeff Silberstein

North Korean authorities seem to have basically ordered the country’s border to China shut entirely in response to the coronavirus outbreak, though it’s still unclear to what extent these orders are being implemented. Reuters:

“They’re keeping the cargo out and they’re keeping the Chinese out; nobody can go in or out,” said one source with firsthand knowledge of the situation at the China-North Korea border.

Kang Mi-jin, a North Korean defector in Seoul who reports for the Daily NK website, also confirmed that the border appears to have been almost entirely shut down since at least Jan. 30.

“The Ministry of People’s Armed Forces ordered all guard posts to bar smuggling as well,” she said. “People, freight, nothing can come in or go out.”

Pyongyang has reportedly asked Beijing not to repatriate North Korean defectors detained in China, according to one South Korean pastor who works with refugees.

According to the source with knowledge of the situation at the border, North Koreans who work in restaurants and elsewhere in China, violating United Nations sanctions, are in “virtual captivity” in their homes under instructions from authorities back in North Korea.

North Korea is typically adept at implementing public health interventions and acted “swiftly and decisively” to try to stop the disease from entering the country, but sanctions restrictions could make it difficult for them to get medical supplies, said Harvard Medical School’s Kee Park, who has worked on health care projects in North Korea.

“Their actions, very costly in terms of revenue from tourists and trade as well as administratively for quarantining people, reflect their concerns regarding their health system’s capacity to handle an outbreak,” Park said.

The efforts – which appear to have been successful in preventing any cases in North Korea so far – mean North Korea has severed or drastically restricted the economic ties it relies on.

“There could be a huge impact not just on the North’s market economy, but also on the entire economy of the country,” Kang said. “North Korea promotes localization, but even for products – candies, crackers, or clothing – manufactured in the country, the raw materials come from China.”

Upcoming North Korean political holidays, which usually include gifts of sweets and crackers for children, may be more less festive than usual if the country’s supplies of sugar, flour, and other ingredients are scarce, she said.

Source and full article: “Burdened by sanctions, North Korea sees coronavirus threaten economic lifelines,” Josh Smith, Reuters, 4/2/2020.

Daily NK reports similar that the government has, quite incredibly, shut the crucial Sinuiju port for shipments to and from China:

Daily NK sources reported that with the port’s shutdown, maritime transportation of goods near the Sino-North Korean border have completely come to a halt.

“All the harbors at Sinuiju Port, which were open until at least Jan. 24, have been completely shut down as of Jan. 25,” a North Pyongan Province source told Daily NK on Friday.

“Authorities are prohibiting the movement of both personnel and goods to stop the coronavirus from entering the country,” he added.

Daily NK sources explained that ships leaving for sea must normally receive a confirmation document and undergo a series of inspections at port customs, but all the customs offices are currently closed and all the boats are docked.

Sinuiju Port, which sits opposite the Chinese city of Dandong in Liaoning Province, is a hub for smuggling as well as official trade with China.

Government ships charged with clamping down on smuggling on the Yalu River have also halted operations, Daily NK sources reported.

“Since all the boats are docked, all the anti-smuggling boats working along the Yalu River have anchored as well,” one source said. “The military unit overseeing the boats have given orders that ‘nobody is to come into contact with Chinese people.’”

Smuggling along the Yalu River also appears to have largely stopped, according to Daily NK sources.

”The current atmosphere is such that if anyone were to say they were going out to smuggle, they would be branded a traitor,” one source said.

With North Korea constantly emphasizing the danger posed by the Wuhan coronavirus through state media along with intensifying its border security, smugglers are on their toes, Daily NK sources said.

Not only is there a fear of infection, but smugglers are also worried that being caught smuggling while the government is so intensely guarding the border might lead to much harsher punishment than usual.

Article source: “N. Korea shuts down Sinuiju Port amid coronavirus fears,” Mun Dong Hui, Daily NK, 4/2/2020.

The state is taking very serious measures. According to another Daily NK report (in Korean), medical staff has been dispatched to all customs houses along the Chinese border, and are checking the vitals of everyone who enters from China. In the Nampo port, North Korea’s commercially most important one, foreign passengers are forbidden from leaving their ships and entering the country.

As NK Pro reports, tourism is essentially completely banned, and border crossings with China and Russia completely shut aside from outbound movements of people (with some exceptions, as reported here by Daily NK). Goods may still cross by land between the countries. People who have been to China are quarantined for one month.

Predictably, goods prices have soared as a result of the border closings, particularly on manufactured and imported goods from China. Prices for goods like flour have gone up by 47 percent since January. This is itself very interesting, since we’ve seen such small or non-existent market price changes following sanctions thus far. The most likely reason is that sanctions actually do not greatly impact most goods that matter to people’s everyday lives, and the North Korean government won’t exactly stop goods from crossing the border. Here, however, the government itself is enforcing a blanket ban on crossings. It’s serious, and reportedly even for smugglers.

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Posted in China, Coronavirus, Health care, International trade, Ministry of Public Health, Sanctions, SARS | Comments Closed

The UNCTAD claim on North Korea’s GDP-growth in 2019

Saturday, January 18th, 2020

By: Benjamin Katzeff Silberstein

The United Nations Conference on Trade and Development (UNCTAD) estimates that North Korea saw a real-GDP growth of 1.8 percent in 2019. Marcus Noland once wrote that one should not “[…] trust any datum on North Korea that comes with a decimal point attached.” This is perhaps even more true of large-scale, macro figures such as this. For one, you need an estimated inflation rate to calculate real GDP, and I have no idea which number UNCTAD may be using. You can find the figure on p. 178 here, together with a quite optimistic prognosis for 2020 and 2021. Even with that growth, North Korea barely recaps the negative growth of 2018. Let me say again that all of these numbers build on little but more or less qualified guesswork. That’s important to keep in mind since this one line in a UN report graph has made quite a few international headlines already.

Most likely, UNCTAD builds their projections upon the somewhat lower decline in exports in 2019 compared with 2018. It’d be interesting to know if they also take into account the seemingly decreased vigilance in sanctions enforcement by China, and how one could possibly quantify this. More on the possible variables here.

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What explains North Korea’s exchange rate drop? How significant was it?

Sunday, August 25th, 2019

By: Benjamin Katzeff Silberstein

Over the past few weeks, both Asia Press and Daily NK have reported the North Korean won depreciating against the dollar on the markets.

According to the figures from Asia Press, it seems the won first fell drastically, but that the initial FX-rise was a so-called “overshoot”, a disproportionately high rise of the exchange rate, but later corrected itself to levels more reflective of actual availability of dollars. The Asia Press index rose from 8,593 won/1$ on July 19th, to 9,463 won/$1 on August 6th, to 8,625 won/$1 on August 21st. Asia Press notes that the reason for the dollar appreciation is unclear, and speculates that it may be related to sanctions. That’s true, but it’s unclear what would have changed so suddenly and drastically in sanctions implementation as to cause a sudden rise of around ten percent. All in all, discounting the sudden and very temporary rise,  the exchange rate rose by not even one percent.

Reporting by Daily NK confirms the exchange rate spike reported earlier by Asia Press:

Daily NK conducted a market survey on August 6 that found the price of US dollars in North Korea was 7,850 KPW in Pyongyang, 7,880 KPW in Sinuiju and 7,900 KPW in Hyesan. The price ballooned some 800 to 900 KPW in just two weeks.

North Korea’s currency rate regularly sees significant volatility, but the last time the rate increased by 900 KPW in just two weeks was in 2015. During the second half of 2015, the North Korean authorities conducted harsh crackdowns on Chinese-made products and heightened international sanctions came into effect. The combination of these two factors caused the exchange rate to skyrocket more than 700 KPW.

There were even areas of the country that temporarily saw a spike to more than 9,000 KPW. In Rason, North Hamgyong Province, the exchange rate rose to 9,740 KPW on August 14 but has since retreated to between 8,500 and 8,700 KPW.

A Daily NK source in North Hamgyong Province said that the rising exchange rate may be related to stagnation in North Korea’s domestic markets. “The currency rate changes every day and it rose in August again,” he said. “The spike in the currency rate this year suggests that businesses aren’t doing so well and it may also be due to external factors.”

The source suggested that the external factors include the US-China trade war and China’s recent intentional devaluation of the yuan. For the first time in 11 years, the Chinese yuan broke past seven renminbi to the dollar on August 5.

Source:
USD – North Korean Won exchange rate spikes in North Korea
Kang Mi Jin
Daily NK
2019-08-22

The FX-rate spikes aren’t reported in the Daily NK price index, so it doesn’t even appear in the broader exchange rate graph. The following graph shows the exchange rate from 2015 until Daily NK’s latest report, only a few days ago:

Graph 1. North Korean won/$1, 2015–August 2019. Graph by NK Econ Watch, data from Daily NK price index.

The won has depreciated against the dollar, for sure. Particularly in the short run. The past few weeks have seen slightly more volatility than usual. But still, in the big-picture context, things look fairly stabile.

Graph 2. North Korean won/$1, September 2018–late August 2019. Graph by North Korean Economy Watch. Data source: Daily NK.

A spike such as the one reported earlier in August can happen for many reasons. There is likely so little of US-dollars in circulation in North Korea that fairly minor changes can make a big dent in the market exchange rate. Communications function so poorly in North Korea that rumors spread easily with little possibility for quick confirmations or denials.

I and Peter Ward have previously argued, among other things, that the dollar isn’t a currency of general use in North Korea. The main holders of dollars are, most likely, state-owned corporations and other non-human entities. One move by a major holder could therefore have a significant impact on the market as a whole. The RMB has held completely stabile, so it’s very likely not a matter of any general stress on the markets. Had the source been something related to sanctions implementation, upped pressure, significantly changed expectations, or the like, we should have seen changes in the won-to-RMB-rate as well. As things stand right now, the market exchange rate does not look to be out of its normal range.

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Chinese tourism to North Korea rising

Tuesday, August 6th, 2019

Benjamin Katzeff Silberstein

Yonhap:

In the report on North Korea published by the state-run Korea Development Institute, Kim Han-gyu, a deputy director at the Korea Tourism Organization, estimated that the number of Chinese tourists to North Korea hit a record high last year, and the trend is likely to persist for the time being.

“This is a probable scenario if current relations between North Korea and China, and the international political situation either persist or improve,” Kim said.

In June, Chinese President Xi Jinping visited North Korea for the first time since he came to power in 2012, a trip that suggested that bilateral relations are back on track after being strained over Pyongyang’s nuclear tests in recent years.

The bilateral ties — once described as being as close as “lips and teeth” — had been soured over the North’s defiant pursuit of nuclear weapons.

North Korea has stepped up efforts to attract more tourists in an apparent bid to earn hard currency in the face of U.N. sanctions over its nuclear tests and its long-range rocket launches.

In 2002, 121,000 Chinese visited North Korea, accounting for 62.4 percent of all foreign tourists to the North that year.

The number of Chinese tourists fell sharply to 24,000 in 2009, when North Korea carried out a second nuclear test in May that year.

Source:
Chinese tourists to N. Korea on rise: official
Yonhap News
2019-07-31

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China’s Xi promised funding for bridge connections in North Korea, reports say

Tuesday, July 30th, 2019

By Benjamin Katzeff Silberstein

This is quite interesting, and hardly surprising. Overall, I’ve seen very little to suggest that China regards the current sanctions pressure as anything but a temporary measure. That would fit the historical pattern well. (For more on this, feel free to check out my chapter on Trump’s “maximum pressure” strategy and its impacts on the North Korean economy.) This time is very different because of the longevity and extent of the Chinese sanctions pressure, but in nature, I don’t believe China’s medium- to long-term strategy on North Korea and sanctions has changed. Talk of China “abandoning” North Korea, which used to be rife when Chinese trade data on North Korea pointed in a downward direction, has often been and remains much overblown.

The news is that Xi Jinping, during his June visit to North Korea, supposedly promised that China would fund facilities on the North Korean side of the new-ish border bridge between southwestern Dandong, as well as fund work on the Hwanggumpyong SEZ. Asahi Shimbun:

China has promised to foot the bill for the construction of related facilities for an already-completed bridge across the border between China and North Korea, sources said.

Chinese President Xi Jinping made the pledge when he visited North Korea in June, they said.

During the visit, Xi also promised that China will promote construction of an economic development zone on North Korea’s Hwanggumpyong Island in the Yalu River, which forms a natural border between the two countries, the sources added.

Construction of the bridge and the economic development zone were agreed on when former North Korean leader Kim Jong Il was still alive. But the projects were effectively frozen after his son and successor Kim Jong Un became the country’s leader.

Xi’s willingness to pay the costs of building an access road to the bridge on the North Korean side of the border, as well as customs-related facilities, suggest that economic relations between the two neighbors are moving to a firmer footing.

According to sources knowledgeable about trade between the two countries and those with links to North Korean authorities, Xi’s promises were conveyed to high-ranking North Korean government officials during meetings to report on the outcome of a summit meeting between the two countries.

Xi’s largesse was also shared in the North Korean military as it will be involved in the construction of bridge-related facilities as well as the economic development zone.

The New Yalu River Bridge connects Dandong in China with Sinuiju in North Korea. Although the bridge has been completed, it is not yet open to traffic.

China will provide about 2.5 billion yuan (39 billion yen, or $360 million) for the construction costs. Chinese engineers have been conducting field surveys since late June.

Since around that time, the upper parts of the bridge have been lit up at night.

In mid-July, cars carrying Chinese government officials traveled to a border gate in the middle of the bridge.

Construction of the bridge started in 2011 when Kim Jong Il was in power. China spent about 1.8 billion yuan in construction costs. The bridge was completed in 2014 under Kim Jong Un’s regime.

Source:
China to fund costs so bridge to North Korea can open to traffic
YOSHIKAZU HIRAI
Asahi Shimbun
2019-07-29

On the North Korean side, the bridge has been lacking a connection to the broader road network (or to anywhere, really) since construction began in 2011, as these pictures show:

The new Yalu river bridge, October 1st, 2011. Image from Google Earth/Digital Globe.

The new Yalu river bridge, March 2nd, 2019. Image from Google Earth/Digital Globe.

Overall, this emphasizes the reality that China really is the only country that North Korea has close, substantive and sustainable trade links with. It was truly unlikely that Xi’s visit to North Korea would occur without any promises for economic benefits or the like. Kim Jong-un’s visits to China have rendered similar benefits, though perhaps not of the same economic magnitude.

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Posted in China, Foreign direct investment, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Special Economic Zones (Established before 2013) | Comments Closed

Daily NK: North Korean laborers reach Russian construction sites despite sanctions

Wednesday, July 24th, 2019

Benjamin Katzeff Silberstein

Daily NK reports:

“Recently, there have been many North Korean workers coming in to Russia. They are arriving at Khabarovsk Station via Tumangang Station. North Korean workers are usually dispatched to Khabarovsk and Ussuriysk and most of them are construction workers,” a source familiar with local affairs told Daily NK.

According to the source, a considerable number of new laborers are being deployed to Russian construction sites as well as some factories and logging sites.

In an interim report submitted to the United Nations in March, Russia said that the number of North Korean workers staying in Russia has declined from 30,023 at the end of 2017 to 11,490 at the end of 2018. Although the number with officially granted visas may have declined, it is believed that these new workers are entering Russia using methods other than a work visa, such as student or temporary stay visas.

It has been reported that in addition to the hard labor, those working in Russia have poor working conditions. They are cooking and sleeping at the same construction site at which they are working.

“North Korean workers are working at a building that is attached to the Far Eastern Federal University in Vladivostok’s Russky Island, and work an average of 15 hours per day from 5:00 am to 9:00 pm or even until 11:00 pm,” he said.

“The daylight is long these days in Russia, so they are working until late in the night without lighting. North Korean workers are really angry because they are worked like dogs. And even though they are working so hard, they do not have much left after paying $1200 dollars to the North Korean company they work for.”

Even under such dire circumstances, North Korean laborers still value being sent to Russia because they can make significantly more money than they can in North Korea.

Some of the highly skilled North Korean workers who have been working in Russia for more than three years are said to be finding their own work under the condition that they pay $1000~$1300 dollars to the state enterprise as a loyalty contribution.

“Those with good skills are freelancing. Some even make $2000~$3000 dollars a month,” a separate source in Russia told Daily NK.

“Russian companies also prefer North Korean workers. Their wages are cheap and they are skilled and work very fast. That is why Russian construction companies prefer to hire them.”

Currently in Russia, there are about 23 North Korean enterprises including Rungrado, Namgyong, Cholsan Trading Company, and Number 17 Construction Company that manage North Korean workers. “A Khabarovsk-based North Korean trading company manages about 2000 North Korean workers,” said the source.

However, it has been reported that recently-dispatched North Korean workers in Russia cannot freely move or contact the outside world as they are under tighter surveillance.

Source:
North Korean laborers reach Russian construction sites despite sanctions
Jang Seul Gi
Daily NK
2019-07-24

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China-North Korea trade up in first half of 2019

Wednesday, July 24th, 2019

Benjamin Katzeff Silberstein

A fairly minor recovery from an already low level, one should bear in mind. SCMP reports:

China’s trade with North Korea recovered in the first half of this year after a sharp fall in 2018, Beijing said on Tuesday.

The announcement comes as ties between the countries improve, with Chinese President Xi Jinping making his first state visit to Pyongyang last month.

Total trade with North Korea reached US$1.25 billion between January and June, up 14.3 per cent compared to the same period a year earlier, Ministry of Commerce figures showed.

Exports to North Korea amounted to US$1.14 billion – a rise of 15.5 per cent – while imports rose 3.2 per cent to US$110 million.

China remains North Korea’s sole military ally and biggest trading partner. Trade in 2018 was worth US$2.7 billion, down 48.2 per cent year on year, the Seoul-funded Korea Trade-Investment Promotion Agency said last week.

North Korea’s trade with China fell sharply in 2018, taking its overall foreign trade to less than US$3 billion for the first time since North Korean leader Kim Jong-un took power in 2011.

[…]

Zhang Baohui, director of the Centre for Asian Pacific Studies at Lingnan University in Hong Kong, said China was “doing its work under the UN sanctions regime” but that North Korea might have the strength to work through its economic hardships.

“The country is always economically isolated from the rest of the world, and North Korean people are used to this situation. In fact, self-reliance has been their way of life for a very long time,” Zhang said.

Article source:

China-North Korea trade up 14.3 per cent in first half to US$1.25 billion
Lee Jeong-ho
South China Morning Post
2019-07-24

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DailyNK on Xi Jinping’s June 2019 and domestic economic impacts

Thursday, June 20th, 2019

Benjamin Katzeff Silberstein

Daily NK:

Chinese President Xi Jinping’s visit to North Korea on June 20-21 has garnered significant international interest on the impact it will have on the lives of ordinary North Koreans, who continue to suffer from the impact of international sanctions.

There is also interest in the “bag of gifts” that Xi will bring to North Korea for his upcoming visit. Past Chinese premiers visiting North Korea typically brought gifts for the regime: Jiang Zemin promised food, fuel and manure to North Korea during his visit in 2001, while Hu Jintao promised two billion USD in aid in 2005.

One potential reason that Xi has not made an earlier trip to North Korea may be because China’s hands are somewhat tied in regard to such gifts while international sanctions remain in place. In all likelihood, however, the fact that Xi has decided to make the trip suggests that China intends to provide economic aid to the country.

Some observers say that China will have difficulty providing aid that goes outside the boundaries of international sanctions. There may be limits to only providing humanitarian aid such as food or manure as a show of sincerity.

Korea Institute for National Unification (KINU) researcher Cho Han-bum told Daily NK on June 18 that “China will not be able to lift the sanctions or become a game-changer on the international stage in regards to North Korea,” but that “it wants to influence events on the Korean Peninsula so it will try to maintain a strong relationship within the framework of international sanctions.”

“China can provide large shipments of food and other necessities,” Cho also noted. “They might try to strengthen the bilateral relationship by increasing human exchanges and tourism to North Korea.”

While China has acquiesced to many of the international sanctions imposed on North Korea, the country may aim to improve the lives of the North Korean people given that it publicly opposes sanctions that damage the civilian economy.

“The Chinese government believes that the sanctions are damaging North Korea’s civilian economy while failing to denuclearize the country,” Gyeongsang National University professor Park Jong-chul told Daily NK when asked for comment. “I predict that China will drastically increase humanitarian aid that does not run afoul of international sanctions.”

Park opined that Xi’s visit to North Korea could lead to more human exchanges, which could in turn positively impact the North’s civilian economy. “Many more Chinese business people, scholars, students and tourists will go to North Korea […] this could soften the impact of the sanctions on North Korea while still abiding by them,” he said.

Xi’s visit to North Korea could also change the atmosphere in the Sino-North Korean border region. China could scale back its strong-armed efforts to eliminate smuggling in the area or even allow North Korean workers to return to China.

Daily NK reported in January that smuggling was widespread in the border region after North Korean leader Kim Jong Un’s fourth visit to China. A Chinese source also reported that large numbers of North Korean workers were seen heading into China after Kim’s first visit to the country in March last year.

“The Chinese government is cracking down on smuggling, but tends to soften its stance during and after summits,” Park said. “There is an increasing number of North Korean workers at companies in Beijing and other places in China […] The Chinese government seems to be developing a visa that can allow these workers to stay under non-worker visas.”

Source:
Impact of Xi’s planned visit to North Korea on the country’s civilian economy
Ha Yoon Ah
Daily NK
2019-06-20

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