N.Korea-China Trade Booms in Border Region

Trade has revived in the North Korea-China border region and investment by Chinese companies has resumed in Pyongyang despite international sanctions.

Exports of North Korean iron ore, which are banned under UN Security Council sanctions, flow freely to China through the border city of Dandong, Radio Free Asia reported on Tuesday.

Heavy trucks are being used to transport iron ore and rare earths, RFA said quoting a trader in Dandong. Traders smuggle them through customs hidden in 50 kg burlap sacks. North Korean seafood is also widely sold at markets in Dandong despite a UNSC ban, according to RFA.

Traders from both sides also swap cargo between North Korean seafood and Chinese food and daily necessities on the West Sea to avoid the authorities.

According to Korea Analysis & Strategy Consultancy, a civic research institute, North Korean seafood is being smuggled into Dandong on North Korean-registered Chinese ships. North Korean processed textile products are also being smuggled into the Chinese city in defiance of sanctions. RFA said North Korean cargo trucks return to their own country with full gas tanks.

In an annual report for 2018 released last month, the U.S.-China Economic and Security Review Commission, a congressional bipartisan advisory group, warned that China appears to be relaxing enforcement of sanctions. "North Korean workers have returned to jobs in northeast China, economic activity and tourism have picked up in border towns, flights in both directions have resumed, and the two countries have conducted high-profile official exchanges to discuss economic development," it said.

Last year, the North also purchased US$640.78 million worth of banned luxury goods thanks to lax enforcement by China. North Korean leader Kim Jong-un has visited China three times this year.

In Pyongyang's Mangyongdae district, meanwhile, factories that stopped running in the 1990s due to economic difficulties, have recently resumed operations thanks to Chinese investment.

According to a source, Pyongyang Kumgang Company started production in October after signing a memorandum of understanding on joint venture investment with a trading company in Shenyang. Chinese investment has also reportedly revived a chicken factory, kimchi factory, an athletes' village, and restaurants in the district.

But many Chinese trading companies dealing with North Korean companies are on the verge of bankruptcy because there is no proper way to collect their revenues because of financial sanctions, RFA said.

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