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North Korea-China trade only slows under UN sanctions

On July 10, 2018, in Pyongyang, North Korea, Kim Jong Un, leader of the Democratic People's Republic of Korea, inspects a construction site at Samjiyon County in the Mount Paektu region. (Kcna/Xinhua/Zuma Press/TNS)
December 30, 2018

This article was originally published by Radio Free Asia and is reprinted with permission.

North Korean trade with China has slowed because of restrictions imposed under international sanctions, but North Korean ore and minerals are being smuggled regularly across the border and banned seafood is still finding its way to Chinese markets, sources say.

Meanwhile, lack of fuel keeps North Korean boats stranded at docks on the Yalu River, with other vessels moving under tow, while power shortages bring lights on in the North Korean border city of Sinuiju only late at night.

To generate electricity, North Korea burns tens of thousands of tons of coal, “but their facilities are very old,” a North Korean trader working in the Chinese city of Dandong told reporters from RFA’s Korean Service visiting the area in November.

“I have told South Korean business representatives that they don’t need to ask where to invest in North Korea,” the trader said, speaking on condition of anonymity.

“They just need to invest in power plants,” he said.

Observed across the border, the North Korean county of Chongsu appears asleep with no smoke seen coming from the chimneys of houses or a local chemical plant, even in the winter cold. Meanwhile, bicycles appear to be the main mode of transportation for people living in the area.

Other residents can be seen pushing small handcarts through the streets.

On Nov. 21, RFA reporters watch at least 10 Chinese cargo trucks prepare to clear customs in Dandong to enter Sinuiju, on the North Korean side of the Yalu River. A Chinese trader working in the area says that some of these will later smuggle North Korean minerals back into China.

“There is a North Korean man in Dandong who trades in iron ore,” the man says, also speaking on condition he not be named. “He makes really good money.”

“Chinese dump trucks bring large quantities of iron ore in from North Korea, but we rarely hear anything about this. The smuggling is hard to detect,” he says.

Oil, seafood smuggled

Meanwhile, North Korean trucks in Dandong stand ready to bring refined oil, restricted under sanctions imposed to punish North Korea for its illicit nuclear weapons and missile programs, back across the river into North Korea.

Under sanctions, North Korea can import only 500,000 barrels of refined oil per year, Soo-ho Lim—a researcher at South Korea’s Institute for National Security Strategy—told RFA in an interview, adding, “but Chinese customs can’t block the smuggling of small amounts of oil into the North.”

“China doesn’t disclose its trade statistics, so it is difficult to check the details,” he said.

North Korean seafood, too, is openly sold in China, though banned for export under U.N. sanctions.

“Everything we have here is from North Korea. We have no Chinese seafood,” a merchant at Dandong’s Yellow Sea Seafood Market told RFA.

All this is smuggled in ship-to-ship transfers in the Yellow Sea, with Chinese business partners paying for the seafood in Chinese currency or rice, sources say.

In a clear violation of U.N. sanctions, clothing material and labels seen in Dandong by RFA are also being sent across the border into North Korea for processing by low-paid workers before being brought back into China for sale.

‘Handling the police’

North Korean art, too, is openly sold in China, with pieces selling for prices ranging from 3,500 Chinese yuan (U.S. $507) to as much as 10,000 yuan (U.S. $1,451), RFA has learned.

Some artists bring their work in from North Korea, while others work locally in Dandong, a fine-art broker working in the city said.

“They have a big house here that they use as a studio,” the broker said.

“Sometimes it takes a month to finish a piece, while sometimes they work on one piece and then work on a second piece while they wait for the first piece to dry. This way, they can work on many pieces at a time.”

Letters between North Korea and the broker seen by RFA ask the broker to provide accommodation for its artists, believed to be members of North Korea’s state-run Mansudae Art Studio. In one letter, North Korea asks the broker for his help in “handling the Chinese police.”

For those making a living from cross-border trade between North Korea and China, there are still ways to survive, one North Korean trader working in Dandong told RFA.

“Even with sanctions getting tougher, there are ways to adjust to the situation. It’s just like people who live in hot weather getting used to higher temperatures.”

“People just live their lives,” he said.

Reported by Yongjae Mok and Hyemin Son for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Richard Finney.