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PRC-DPRK joint ventures hiring North Koreans converting to Chinese firms to evade sanctions

By Takayuki Nakagawa in Dandong City, Liaoning Province


Informed sources revealed that Chinese-North Korean joint ventures hiring North Korean workers in Liaoning Province in northeast China and elsewhere are converting into Chinese companies. Based on the UN Security Council sanctions resolution last September, China has asked joint ventures with North Korea to close down by early January. The latest moves are seen to be an attempt to evade sanctions and continue to employ North Korean workers.


The North Korean restaurant Liu Jing in Dandong City, the center of China-North Korea trade, suddenly suspended business on Jan. 8. This restaurant is jointly operated by a company connected with a businesswoman in Dandong, who was prosecuted for criminal offenses by the U.S. Department of Justice in 2016, and North Koreans. It is popular for offering singing and dancing by female employees for entertainment. The Chinese Ministry of Commerce served notice that Chinese-North Korean joint ventures were to be closed down by Jan. 9 in accordance with the UN resolution.


However, a source familiar with the operations of this restaurant said: “North Korean capital will be withdrawn and the restaurant will continue to employ the North Korean women as a fully Chinese-owned business.” More than 10 North Korean employees of the restaurant will also remain in China “to practice Chinese and playing Chinese musical instruments.”


Another joint venture of the above Chinese businesswoman with North Koreans, the Qibaoshan Hotel in Shenyang, Liaoning Province, also suspended business on Jan. 9, but it is preparing to resume operation using the same method of converting into a fully Chinese-owned business.


At least four North Korean restaurants in Liaoning have suspended business since the end of 2017, but they appear to be looking for ways to resume operation. A source at a restaurant in Shenyang said to be affiliated with the North Korean armed forces said: “We are redecorating and will resume business in due course.”


According to an informed source in Beijing, Yuliuguan, the largest North Korean restaurant in Beijing, has converted into a Chinese business and was operating as usual on Jan. 10.


For a time, it is said that there were around 100 North Korean restaurants in China. These businesses paid their employees only a miserly amount of spending money and each restaurant remitted tens of thousands of dollars to North Korea every year to fund the development of nuclear arms and missile.


More than 200 North Korean women were seen going to work at an electronic parts factory outside Dandong in the early morning of Jan. 9. Dandong is home to the most number of North Korean workers in China. While groups of several dozens of them were confirmed to have returned home since last November, a diplomatic source estimates that “only about 2,000 have left and there are still more than 10,000 of them working here.”


The Chinese authorities have not made public the number of North Korean workers, so the actual figure is unknown. It is possible that joint venture factories have converted into fully Chinese-owned businesses. Additional sanctions mandated by the United Nations last December call for the repatriation of North Korean workers within two years. The above diplomatic source predicts that “these workers will continue working until right before their repatriation.”

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