On the North Korea-China border one can see many flickering lights at night. Resembling the glow of fireflies, they are signals exchanged by smugglers along the banks of the Tumen River. All sorts of goods are smuggled across the border area, the largest in scale and most lucrative of which are used cars. North Koreans ship them to China under tacit approval of the authorities, despite being subject to crackdowns by China.

Of course, the cars shipped to China are not North Korean-made vehicles instead under a brokering agreement North Korea buys Japanese-made cars and re-sells them to China. Used Japanese cars are bought for US$2,500-US$3,000 per unit in Japan and sold to Chinese smugglers for US$6,000-US$7,000, generating a handsome margin, according to North Korean defectors in the South. Their Chinese importers too make handsome profits by selling them to end-users at between US$10,000 and US$15,000.

Used cars are brought to the North aboard the "Samjiyon" steamer plying between North Korea and Japan. Engaged in the business are not only North Korean trading firms, but also foreign exchange earning agencies belonging to organizations wielding clout. Their number is said to have jumped from six early in the 1990s to over 100 now.

A major deal reportedly involves as many as 200 cars. Individual merchants gathered at Chongjin port in the northeast of the Korean peninsula buy used Japanese cars and re-export them to China. In addition to trading firms and public institutions, individual citizens are now engaged in the used-car business, according to North Korean escapees here. Since one can make a fortune overnight by selling one or two second-hand cars, young men of ability are attracted to the business. Essential for such businessmen is to secure links with the People's Army, the State Security Agency and border guards.

Prompted by the second-hand car business, most outdated cars of state agencies in the North have been replaced with Japanese-made ones. Excepting Mercedes limousines used by ranking officials, most passenger cars in the North are now said to be Japanese-made.

"Because car transactions with China are done in cash, one is all but assured of a fortune if he is capable of importing second-hand Japanese cars on credit," said a North Korean escapee here who had been involved in the business in the North. Most popular are Toyota’ Crown and Nissan’s Cedric which are usually five to six years old with a mileage of 50,000km-100,000km. With regard to older cars, importers are said to manipulate tachometers. Such cars are imported from Japan for about US$3,000 per unit.

Though troubled by second-hand cars smuggled from North Korea, China does not finds it easy to block them in the face of tricks employed by Chinese smugglers, their organizational power and relations with Chinese security authorities.

Upon entering the North carrying cash bags, after being guided by flashlight signals, Chinese smugglers test the quality of cars on offer and make payments, whereupon North Korean drivers take them across the Tumen River, driving through shallow streams.

Last June an exchange of fire took place in Kaisandun, northeastern China between security police officers who raided a group of car smugglers and the illicit dealers. In the incident one police officer was reportedly killed and several were wounded. At public security offices of Chinese border cities like Yanji and Huichan, confiscated second-hand Japanese cars can be seen parked. Major second-car dealings involving hundreds of units are said to have discontinued due to stepped-up crackdown by Chinese authorities, but such dealings continue ceaselessly on a smaller scale, according to defectors.

(Kang Chol-hwan, nkch@chosun.com )