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INTERNATIONAL > East Asia & Pacific

China calls time on North Korean businesses

  • January 10, 2018
  • , Nikkei Asian Review , 6:53 a.m.
  • English Press
  • ,

By OKI NAGAI and SHUNSUKE TABETA, Nikkei staff writers


BEIJING — A number of North Korean businesses in China have apparently been forced to close and North Korean laborers returned home as Beijing follows through on United Nations sanctions, but not all seem affected by the crackdown. 


The Chilbosan Hotel in the northeastern Chinese city of Shenyang, 70%-owned by a North Korean entity and 30%-owned by Chinese company Dandong Hongxiang Industrial Development, halted operations Tuesday. Employees had insisted until the day before that the North Korean shareholder had exited the business and that the luxury hotel would continue to operate. A source said it was shut down on orders from Chinese authorities and it is unclear if and when its doors will reopen.


Following North Korea’s sixth nuclear test, the U.N. Security Council passed fresh sanctions Sept. 11 that sought to close North Korean-owned businesses and the hiring of North Korean laborers abroad. The Chinese Ministry of Commerce later notified relevant enterprises in the country to shut their doors within 120 days of the U.N. resolution. Tuesday marked the day after the end of this grace period.


According to information provided by a Chinese government website, a trade and investment consultancy thought to be partly North Korean-owned has gone out of business. Several North Korean restaurants in the border city of Dandong — including the Pyongyang Koryo restaurant, described as one of the largest of its kind in China — have also closed. North Korean laborers have been seen returning home with copious luggage as well.


Such businesses and laborers provide the North Korean state with precious hard currency in the form of earnings and remittances. Other sanctions have targeted North Korean exports and supplies of fuel and materials to the country.


Song and dance


Meanwhile, the Yuliuguan Korean restaurant in Beijing remained open and was even accepting future reservations. It used to be operated by a venture between what was likely a North Korean entity and a Chinese company, but its ownership was changed to two individuals as of Dec. 8, according to a Chinese credit research firm.


Though these individuals are believed to be Chinese, their names suggest possible Korean roots. It is unlikely that a Chinese player without North Korean ties would invest in the restaurant at this time, given cooling bilateral relations. Asked about the restaurant’s ownership, an employee replied that “you don’t need to know about such things.”


U.N. sanctions passed in December stipulate that all North Korean laborers working abroad must return home within two years, meaning that these restaurants may no longer be able to secure the necessary performers for the music and dance shows for which they are known.

But some in the business dismiss such concerns. “As long as the performers are ostensibly part of a cultural exchange, they won’t be sent back home,” one said.


While international pressure on North Korea is rising, the success of these efforts continues to rest with China, Pyongyang’s most important source of economic aid. China’s Ministry of Foreign Affairs has stressed Beijing’s full commitment to U.N. sanctions. “We’re keeping an eye on whether Chinese authorities crack down on attempts to skirt the sanctions,” a diplomatic source here said.

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