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Signs of dramatic drop in China-North Korea trade in border city

By Yasunobu Shirouchi in Dandong

 

The effects of the sanctions that China has imposed on North Korea under pressure from the U.S. are now being felt. In Dandong City, Liaoning Province, the hub of China-North Korea trade, the number of trucks traveling between the two countries has dropped significantly since mid-January. Prices of goods subject to sanctions are beginning to spiral in Pyongyang. It is obvious that this increasingly serious economic damage is behind North Korea’s active efforts to improve relations with the ROK, including its participation in the PyeongChang Olympic Games.

 

North Korea relies on China for 90% of its foreign trade, and Dandong accounts for 70% of bilateral trade. On the morning of Feb. 1, some 40 trucks, including two large trucks of Japanese manufacture, crossed the China-North Korea Friendship Bridge over the Yalu River, on the border between the two countries, and arrived at Dandon’s customs checkpoint.

 

A Chinese trader involved with business with North Korea said: “Compared with May last year, the number of trucks crossing the Yalu River, including from the Chinese side, is down by over fifty percent. China is serious about its sanctions.”

 

According to this trader, customs inspections have tightened since mid-January and the export of auto parts has practically stopped. Severe restrictions have also been imposed on construction materials that can be converted to military use.

 

Along with the export ban on crude oil and refined petroleum products, the Chinese Ministry of Commerce has also banned the export of vehicles, auto parts, steel, and other metal products since Jan. 6, in accordance with the UN Security Council (UNSC) resolutions passed in response to North Korea’s firing of ICBMs. The above trader, with a gloomy look, said, “The only steel products allowed for export are shirt buttons and zipper pulls.”

 

According to a North Korean trader who came to China, due to the short supply, prices of TV sets and other home appliances have jumped by an average of 15%, while auto parts are now 25% costlier in Pyongyang.

 

What is puzzling is that even trade in sugar, which is not covered by UNSC sanctions, is also banned. The North Korean trader revealed that “China has imposed its own embargo on the grounds that bombs can be made by mixing sugar with chemicals.”

 

Meanwhile, there have been continuous reports of smuggling of marine products, gasoline, and other goods near the border or in international waters. However, the economic crackdown is now affecting even illegal operations.

 

Tokyo Shimbun obtained a copy of a proposed contract for the smuggling of marine products to China. The ship would sail from Donggang outside Dandong in the evening. It would replace the Chinese flag with the North Korean flag in the Yellow Sea and enter DPRK territorial waters to load marine products at Ryongchon port on the coast. When the ship returns to Chinese waters, it would fly the Chinese flag once again.

 

The contract, which is purportedly about the transport of household goods, provides that the two sides will each pay for 50% of the cost of purchasing the ship, which is 300,000 yuan (approximately 5.2 million yen). However, according to a broker involved in the deal, the North Korean side was unable to raise enough funds, so it is now uncertain if the contract will be signed.

 

North Korea is talking tough and the Workers’ Party of Korea’s official organ, Rodong Sinmun, claims that “no sanctions or pressure can obstruct the future of a Korea with a strong spirit of self-reliance and self-development.” However, the actual situation of China-North Korea trade reveals one reason why North Korea is trying to co-opt the ROK and open a crack in the international network of sanctions.

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