DPRK visitors to China in 2011

February 10th, 2012

The PR of China published official data on the number of North Koreans that visited the country in 2011. The numbers were originally reported in this Voice of America report (in Korean). The VOA story was covered in English by two Korean news sources, and I have posted them below.

It is important to remember that these are official Chinese numbers, therefore they represent a lower bound of the actual numbers of North Koreans crossing the border.

According to the Daily NK:

China’s National Tourism Administration has revealed that the number of North Koreans legally visiting the country reached a new high in 2011.

According to a report carried by Voice of America yesterday, the 152,300 North Koreans who visited China last year exceeded the 2010 figure of 116,400 by more than 30%, and comfortably beat the previous high of 125,800 recorded in 2005.

Approximately half (75,266) the total number of visitors apparently went for work, while a further 39,042 went for business purposes or to attend meetings. 4,589 were tourists. However, the statistics show that just 99 of the visits were for the purpose of visiting relatives.

72,885 of the visitors were age 45 through 64, while a further 64,823 fell into the 25 to 44 bracket. Women were heavily outnumbered by men; 21,828 against 130,472.

Yonhap reported an additional point:

Ferries were the most popular means of transport for the North Koreans at 62,160 passengers, followed by 33,933 who arrived by plane, 31,829 by car, 19,132 by train and 5,246 by foot.

Although the majority of official North Koreans border crossers are men, it is reasonable to assume that the majority of unofficial North Korean border crossers are women.

Read the full stories here:
Largest-ever number of N. Koreans visited China in 2011: report
Yonhap
2012-2-10

Official Visitor Numbers Hit New High
Daily NK
Park Seong Guk
2012-2-10

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Law on Foreign-funded Banks Amended

February 9th, 2012

According to KCNA (2012-2-9):

Law on foreign-funded banks has been amended in the Democratic People’s Republic of Korea.

The law, which breaks into 32 articles in five chapters, deals with classification, residence, property right and independent management of foreign-funded banks.

The law stipulates that the banks with 10 or more years of banking activities shall be exempted from paying income tax for the first-year profits.

It also provides that business taxes shall not be levied on the interest receipts from loans that were credited to local banks and businesses in their favor.

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North Korean workers in Kaesong exceeds 50,000

February 9th, 2012

Institute for Far Eastern Studies (IFES)
2012-2-8

As of January 2012, the Kaesong Industrial Complex (KIC) employs over 50,000 North Korean workers.

South Korea’s Ministry of Unification (MOU) reported that North Korea sent 449 additional workers to the complex last month, bringing the total number of North Korean employees at the KIC to 50,315.

The majority of the workers are women, comprising 72 percent of the total employees. A total of 81.8 percent are high school graduates, while 9.5 percent are college graduates and 8.7 percent are graduates from specialized/professional schools.

The KIC has had a low worker turnover rate. Some of the workers are licensed doctors and nurses, signifying the popularity of employment at the complex.

However, the MOU added that, “in order to meet the demands of the South Korean corporations in the KIC, 20,000 more workers are needed.”

Currently the average monthly wage of the workers is 110 USD, which is paid directly to the North Korean authorities in US dollars by the South Korean companies.

Out of the total wage, 45 percent is deducted and collected by the North Korean government as social security (15 percent) and social cultural policy funds (30 percent). The North Korean workers receive 55 percent of the total wage, which is paid either in coupons or North Korean currency.

Since the KIC’s opening in 2004, the total amount paid to the KIC workers reached 193.58 million USD as of November 2011.

Despite the deadlocked relations between the two Koreas, the number of employees, along with production and number of businesses, has steadily increased.

The number of employees in 2007 was 23,529. Thus the number has increased to over 50,000 in just four years, and the yearly production output has risen from 180 million to 400 million USD.

Cumulative production also increased from 310 million USD in March 2008 to 1.19 billion USD as of last year. During this time, 55 additional South Korean companies joined the KIC.

Yearly export output jumped from 870,000 USD in 2005 to 36.87 million USD in 2011. However, this is a drop from the previous year’s export of 39.67 million USD. Cumulative export as of November 2011 was 190 million USD.

In the assessment of the MOU, “the decrease in export reflects buyer’s anxiety from instability in inter-Korean relations and North Korean military provocations and many of the manufactured goods were sold domestically in South Korea.”

In addition, the issue of KIC-made products to be granted a “made in Korea” label is still under debate. According to an undisclosed MOU source, “This July will mark the one year anniversary of the ROK-EU FTA and the Committee on Outward Processing Zones (OPZ) is scheduled to meet to discuss the matter of KIC’s recognition as OPZ. But it will not be an easy game to win.”

UPDATE:  The Hankyoreh also wrote about the Kaesong Zone’s growth.

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DPRK – PRC economic integration

February 9th, 2012

According to the Choson Ilbo, China-N.Korea trade has reached a historically high level (as it does nearly every quarter).

China’s trade with North Korea has tripled since 2005. According to the Korea Trade-Investment Promotion Agency (KOTRA), Chinese customs statistics show that China has been bumping up its trade with the North by US$1 billion every three years since the middle of the last decade.

After first breaking past the $1-billion trade barrier in 2005, China posted $2 billion in 2008 and over $3 billion last year. Minerals, machinery and cars topped the list of exports, and two-way trade last year reached its all-time peak of $5 billion.

Additional Information:
Read the full story here:
China-N.Korea Trade Reaches All-time High
Choson Ilbo
2012-2-9

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Kim Jong-il’s name carved on Mt. Sokda

February 8th, 2012

 

Pictured above: (L) A Google Earth satellite image of the face of Mt. Sokda (석다산) before it was “blessed” with the Kim Jong-il commemorative carving (Coordinates:  39.180907°, 125.361290°) (R) A photo from KCNA of the new carving.

According to KCNA:

Pyongyang, February 8 (KCNA) — Letters “Peerless Patriot General Kim Jong Il. February 16, Juche 101 (2012)” were carved on natural rock in Mt. Sokda, Jungsan County, South Phyongan Province on the 70th anniversary of his birth.

The total length of the letters is 120 meters with his name 10 meters high, 5.5 meters wide and 1.4 meters deep. Other letters are 8.5 meters high, 4.8 meters wide and 0.9 meters deep.

Officials and working people in South Phyongan Province chose the rock that is easily visible, reflecting the ardent desire of the people
around the country to exalt his immortal revolutionary feats forever.

An unveiling ceremony took place on Wednesday.

Present there were Kim Ki Nam, Choe Thae Bok, Yang Hyong Sop officials concerned, party members and other working people in the county and helpers.

There are of course many carvings like this in the DPRK. Here is one of my “favorite” examples.

UPDATE 1: The Daily NK has more. See below:

Read the rest of this entry »

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Developing the DPRK through agriculture

February 8th, 2012

38 North
Randall Ireson
2012-2-8

READ THE FULL ARTICLE HERE

Despite continuing food shortages in the DPRK, the 2012 New Year’s Joint Editorial and other statements related to the succession of Kim Jong Un suggest there will be no new approaches to revitalizing North Korean agriculture. The editorial labeled the food problem “a burning issue in building a thriving country,” but allocated fewer than 150 words (of 5500) to that issue, only exhorting the masses to increase yields, implement crop rotations, and increase production of farm machinery and farm inputs.

Yet agriculture could lead a revival of the DPRK economy if appropriate policy changes were implemented. The technical means of improving farm production in the DPRK have been known for years. And if farms could use income earned from increased production to purchase improved machinery and other supplies needed for modern agriculture, a virtuous circle of investment in the farms plus support to small industry could lead to the modernization of both sectors. Government investment combined with some international assistance could stimulate sustainable increases in productivity and better incomes for workers on the farms and in related industries.

A few recent projects point the way to a sustainable and highly productive agricultural sector. But without changes in the institutions and infrastructure that support agriculture, there is no hope for any substantial improvement in food security. The leadership succession offers an opportunity to continue and augment some necessary changes begun under Kim Jong Il, though not if consolidation of the new leadership is founded on a reflexive insistence on ideological orthodoxy.

Fifteen years of international aid programs to the agriculture sector have brought a very good understanding of the difficulties faced by DPRK farms as well as the means to overcome them. There are no technical obstacles to greatly increased farm productivity. Nothing exceptional is required-only the widespread application of commonplace good farming practices. A few examples will suffice:

*applying lime to the fields to offset acid soils would increase yields by 20-40%;
*rotating cereal crops (especially maize and wheat) with legumes such as soy or green manure crops would increase yields by around 10%;
*using better seeding equipment would increase yields by around 10% because of better germination and appropriate spacing between each plant;
*using the methods of SRI (system of rice intensification) in paddy fields can increase rice yields by over 20% with no other inputs; and
*conservation agriculture (low tillage farming) would reduce soil erosion, save fuel, and improve soil quality.

These practices are neither difficult nor complex, and many farms in the DPRK already know of and are beginning to adopt these methods. Yet most of these practices are still isolated exceptions because despite their clear benefit, farms lack the support infrastructure and economic resources to implement them fully. The DPRK has largely completed its demographic transition from a rural to an urban society, thus surplus rural labor is not available to offset the loss of industrial support to agriculture. Farms need machinery and fuel as well as the other inputs of modern farming. Use of lime depends on fuel to haul the crushed limestone from quarries. Lack of tractor power makes land preparation slow and difficult, thus impeding the use of off-season green manures or of double cropping. Farms mostly do not have modern seeders for maize, soybean, or wheat. Seed placement by hand is neither uniform nor at a regular depth, causing crowded plants and uneven germination. Use of SRI is impeded by the lack of inexpensive plastic trays that ease handling of the very young rice seedlings…

READ THE FULL ARTICLE HERE

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Abrahamian with a CNC update

February 8th, 2012

 

Pictured above: the DPRK’s two CNC plants mentioned in the post below. (L) Ryonha Factory in Pyongyang, (R) Ryonha Factory in Huichon

From the Choson Exchange web page:

The company that is tasked with producing and selling CNC is Ryonha, through its subsidiary, Unsan. The company had a booth at the recent International Trade Fair in Rason, held in North Korea’s Special Economic Zone in the far Northeast, bordering Russia and China. Their booth was staffed by a Vice President and – as one might expect – attracted lots of attention from the locals in attendance.

The president claimed annual exports of 30,000,000 euros to Europe, South America and South East Asia. He didn’t have exact details on profits, but mentioned that Unsan imported 10,000,000 euro worth of parts, mostly from Europe, such as control units and electronic relays Siemens and Arno. Their main CNC factory is 40,000 sq. meters and the “biggest in the world” according to the manager. They have two facilities, one in Pyongyang and one in Jagang with 12,000 employees in total. They want to open a factory in Rason, ideally without investors. Prices were said to be: 150,000 EUR for a European made CNC machine but only 52,000 EUR for an equivalent machine made in the DPRK, with the “same quality”.

Unfortunately for Ryonha, it seems to be a subsidiary of the Korea Ryonbong General Corporation, which is under UN sanctions as a WMD proliferator. This no doubt impacts Ryonha’s ability to market itself to customers abroad. Ryonha also doesn’t seem to have a website, which can’t help, either.

Should Ryonha’s parent corporation be taken off the UN’s list of designated proliferators, it will find easier access to a global CNC market that was $6.1 billion in 2007, before the financial crisis hit. The market has contracted since then, as the crisis left a global glut in inventory in 2009, which has taken well into 2011 to clear. The sharply reduced demand, particularly from automakers, has made the CNC market particularly competitive, though a sustained economic recovery would eventually drag the industry back up to pre-crisis levels.

It’s difficult to know what kind of impact Ryonha might have on the global CNC industry, as customers and vendors alike are probably reluctant to trumpet where their machines are made. One of the effects of sanctions has been that companies try to hide their tracks when conducting business with the DPRK, even when the industry is unrelated to sanctioned items. This is sometimes done through an extra layer (or two) of outsourced contracts, or with textiles, sometimes just label-switching. This is tough to do with bigger machines, of course, leaving North Korean CNC machines facing perhaps understandable prejudices.

Its impact on the domestic market will be more significant, of course, reducing the need to spend hard currency on imported CNC machines from China and elsewhere. Perhaps then, this import substitution will allow the DPRK to use that unspent capital on projects that actually benefit the daily lives of its citizens.

Read the full post here.

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KPA Navy Units 790 and 158

February 7th, 2012

Last night I loaded Google Earth and took the time to track down the KPA Navy units Kim Jong-un recently visited (as one does).

According to KCNA (2012-2-6), Kim Jong-un inspected the Command of Combined Unit 597 of the KPA Navy and its units. The specific units he visited were the 790 and 158 Units. For more details of the visit, check out this NK Leadership Watch post.

Unit 790 is in Rakwon county (락원군) at Google Earth Coordinates:  39.902029°, 127.866356°

Click image for larger version

Unit 158 is also based in Rakwon county (39.875964°, 127.779881°) on the other side of the the hill from the Kim family residential compound, “Building No. 72”. We know about this leadership residence because Kenji Fujimoto visited here. Kim Jong-un is likely residing here as he tours the area:

Click image for larger version

Or maybe that is just what they want us to think?

Interestingly, in the location where Kim Jong-un was said to have visited KPA Navy Unit 158, Kim Jong-il visited on November 27, 2009—except then it was the Command of KPA Navy Combined Unit 587. So this could mean a couple of different things to the non-military-expert (me). Either KPA Navy Combined Units 587 and 597 are headquartered in the same location, or they are the same unit with a different name. Other ideas and theories welcome.

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Kim Jong-un makes over 61 onsite inspection visits

February 7th, 2012

Institute for Far Eastern Studies (IFES)
2012-2-1

Since Kim Jong-un’s first election as the vice-chairman of the Korean Workers’ Party Central Military Commission (CMC) on September 28, 2010, Kim Jong-un was reported to have made 33 accompanied onsite inspections with Kim Jong-il and a total of 61 visits at industrial sites.

Out of the 61 total visits, Kim Jong-un inspected the following industries: power/electricity (5 times); metal (3 times), machinery (12 times); agricultural (4 times); light (5 times); food (14 times); and industrial (4 times). Construction sites of Huichon Power Stations were visited four times while the Huichon Ryonha General Machinery Plant and the Kanggye General Tractor Plant were also visited multiple times.

Kim Jong-un’s “economic learning” began while accompanying his late father Kim Jong-il on onsite inspections. Even when Kim Jong-il was alive, Kim Jong-un was most likely to have made preliminary visits to these industrial sites for a closer assessment as a part of his duty as the vice-chairman of the CMC.

The significance of the recent visits mainly lie with inspections to the Huichon Power Stations (located in Jagang Province) equipped with 300,000 kW of power generation capacity. Huichon Power Station was an important national strategic project which was often emphasized by Kim Jong-il, “The construction of the power plant must be completed before the centennial birthday of the Great Leader (Kim Il-sung) with great efforts from the entire party, military and the people.”

The electricity produced at the Huichon Power Station is likely to be distributed primarily in the Pyongyang area around the two national holidays, the Day of the Shining Star (Kim Jong-il’s birthday) and the Day of the Sun (Kim Il-sung’s birthday). Currently, power line constructions are still underway in Pyongyang.

At Huichon, constructions of additional terraced power plants are under planning using the currents from the Yangtze and Cheongcheo Rivers. The electricity produced from these plants is likely to be distributed to the industrial areas in Jagang Province, which is central to the machinery and national defense industries.

Important policy implications can be found from Kim Jong-un’s past accompaniment to the Huichon Ryonha General Machinery Plant with Kim Jong-il. This plant is currently emphasized as Kim Jong-un’s accomplishment and revered as, “the industrial revolution of the new era,” and a “site of CNC (Computer Numerical Control) breakthrough.” In addition, Kim Jong-un’s economic leadership is acclaimed for placing prominence on the state-of-the-art technology and “knowledge-based economy.”

Kim Jong-il visited the Huichon Ryonha General Machinery Plant on October 28, 2011 with Kim Jong-un and inspected the CNC assembly line, CNC processing plant, and CNC machineries. He stressed, “Modernization must be promoted in all sectors and levels founded on the state-of-the-art technology. The achievements in the CNC technology should serve as the stepping stone to move forward toward a higher level of science and technology.”

Similarly on October 27, 2011, Kim Jong-il visited the Yangtze River Machinery Plant* with the younger Kim and stressed, “Powerful economic nation that we are seeking is knowledge-based economy which is only possible when CNC technology and automation is realized that can create material wealth through little resources, efforts, and energy.”

The “knowledge-based economy” will likely become the trademark of Kim Jong-un and esteemed as following the “teachings of Kim Jong-il.” Kim Jong-un’s recent industrial site visits were concentrated on the cutting edge production facilities equipped with modernized and automated production processes.

* NKeconWatch: I believe this name is an error and the correct location is the Jangjagang Machine Plant.

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KEDO again seeks compensation for equipment in DPRK

February 7th, 2012

According to Yonhap:

A U.S.-led international consortium plans to renew its call this month for North Korea to compensate for losses incurred from scrapping a project to build two light-water reactors for the communist state, a senior Seoul official said Tuesday.

The move, which is likely to irritate North Korea after the death of Kim Jong-il, had been originally decided upon just weeks before Kim died of a heart attack in December last year. The Korean Peninsula Energy Development Organization (KEDO) decided not to drop the demand for compensation from the North.

“The KEDO will send an official letter this month to North Korea, demanding it compensate US$1.89 billion for the termination of the light-water reactor project,” the official at Seoul’s foreign ministry said.

The KEDO, which also includes South Korea, Japan and the European Union, officially shut down the multi-billion-dollar project in 2006 after North Korea was caught by the U.S. pushing a second nuclear weapons program based on enriched uranium in addition to its widely known plutonium-based program.

The consortium has since been asking North Korea to return the money it poured into the project. Prospects for the call have remained dim, however, given the North’s economic hardship and belligerency.

The $4.5 billion project, which was about 35 percent complete, dated back to a 1994 deal linked to North Korea’s promise to denuclearize. In return, the KEDO agreed to build two 1,000-megawatt light-water reactors.
In September last year, amid renewed diplomatic efforts to resume the six-party talks on ending the North’s nuclear drive, Pyongyang abruptly demanded $5.7 billion in compensation, claiming that failure by the KEDO to build the reactors caused it heavy financial and other losses.

“The KEDO’s renewed call for compensation would be an official reply to counter the North’s demand last September and has nothing to do with the passing of Kim Jong-il,” the official said on the condition of anonymity, brushing off concerns about possible irritation at the North.

The official believed that North Korea demanded compensation last September as part of its “negotiating ploy” to raise the issue of the halted project if the six-nation talks resume.

The death of Kim left many policymakers and analysts wondering if his youngest son and chosen heir, Kim Jong-un, will be able to successfully consolidate power in Pyongyang.
Shortly before Kim died, the United States and North Korea were apparently poised to announce a breakthrough toward the resumption of multilateral talks, which has been dormant since late 2008. Other members of the talks include South Korea, China, Russia and Japan.

South Korea, the U.S. and Japan have insisted that the North must accept a monitored shutdown of its uranium enrichment program before the aid-for-disarmament talks can resume.

Read the full story here:
Consortium to renew call for Pyongyang to reimburse reactor project losses
Yonhap
2012-2-7

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