[By all indications, China has at least officially enforced the international sanctions that have been imposed on the North to curtail its nuclear weapons program. But on the border, the signs of North Korea’s economic dependence on China are evident in a shadow economy of cash couriers, short-term workers and gray-market trading that has persisted despite the sanctions.]
By Jane Perlez
 |
|
A luxury apartment
complex in Dandong, China, near the border with North Korea,
last month. A big screen
played footage on a loop of a meeting between
President Xi Jinping of
China and North Korea’s leader, Kim Jong-un.
CreditYan Cong for The
New York Times
|
HUNCHUN,
China — In the Chinese
border town of Hunchun, garment factories gladly employ squads of North
Koreans, who are valued as skilled and dutiful workers. Live crab from the
North wriggle in huge tanks in the fish market. Informal bankers promise to deliver
the equivalent of thousands of dollars in Chinese currency to North Koreans
across the border in a matter of hours.
Up and down the 900-mile border, in fact,
Chinese businesspeople export and import things like Chinese-made street
lighting and exotic North Korean-grown mushrooms.
By all indications, China has at least
officially enforced the international sanctions that have been imposed on the
North to curtail its nuclear weapons program. But on the border, the signs of
North Korea’s economic dependence on China are evident in a shadow economy of
cash couriers, short-term workers and gray-market trading that has persisted
despite the sanctions.
And with President Trump’s summit meeting
with the North Korean leader, Kim Jong-un, back on track, excitement is growing
about the opportunities that could open up should the sanctions be eased.
Should a deal emerge from the Trump-Kim
meeting on June 12 in Singapore, China is ready to extend its dominance over
the North’s small and decrepit economy, where signs of an emerging market
economy are also strengthening China’s hand.
Mr. Trump seemed to concede China’s leading
role on Friday after a meeting in the White House with North Korea’s
spymaster-turned-letter-bearing-envoy from Mr. Kim. Mr. Trump told reporters
that he would leave it to China and also South Korea to help the impoverished
North rebuild.
“That’s their neighborhood; it’s not our
neighborhood,” said Mr. Trump, leaving aside the fact that American troops have
been stationed on the peninsula for decades.
Much of the business is driven by demand from
a nascent North Korean middle class, which Chinese traders said could become a
group of avid new consumers once sanctions are eased.
The changes in the North are largely the work
of the young leader, Mr. Kim. He has lifted the controls of the command economy
to allow small-time trading, smuggling and “shuttle traders” who move with ease
between China and his nation, economists and Chinese businesspeople say. In a
New Year’s speech in January, Mr. Kim said that having developed a nuclear
arsenal, he would now turn his attention to improving the lives of his people.
Inside North Korea, the markets that Mr. Kim
has allowed to grow have become an essential part of everyday life, offering
many people a higher standard of living, said Byung-Yeon Kim, an economist who
wrote a recent book, “Unveiling the North Korean Economy.”
While this growth has bolstered popular
support for the Kim family dynasty, the North Korean leadership is aware that
it can also be a two-edged sword, he said. Having set itself on this road of
economic improvement, North Korea must continue to find ways to expand and
develop a national economy whose output is still just $20 billion — half the
size of that of South Korea’s sixth-largest city, Gwangju.
“North Korea is now a place where you can
enjoy a normal life compared to the 1990s,” said Mr. Kim, the economist. “Money
has become very important. People there are saying if they can have money they
have no reason to flee to South Korea.”
The support of the middle class is vital for
the North Korean leader, and so far he seems to have gained it. That holds true
not only in the capital, Pyongyang, but in other towns to the north, said
Andrei Lankov, a Russian expert on North Korea who has lived in the North and
maintains ties there.
“Kim Jong-un is popular,” Mr. Lankov said.
“Everyone supports him.”
China is anxious to repair its tattered
alliance with the North and is determined to play a dominant role, along with
South Korea, in any reset of the North’s economy. In perhaps the most telling
sign of a revival in trade, Air China announced Tuesday that it would resume
regular flights from Beijing to Pyongyang on Wednesday. The sudden resumption
came after flights were suspended last November because of negligible demand,
the airline said.
The Chinese leader, Xi Jinping, met in
Beijing last month with a delegation of North Korean mayors and governors, an
unusual gesture by the powerful Chinese president to meet such low-ranking
foreign visitors. The North Koreans were given a grand tour not just of Beijing
but also of Shanghai and the rural central province of Shanxi, traveling on
state-of-the-art bullet trains and receiving tutorials on how China rapidly built
up its cities and industries.
Since Mr. Kim’s surprise meeting with Mr. Xi
in the Chinese city of Dalian last month, where economic development was
reported to be at the top of the agenda, there have been suggestions that China
might help rebuild the North’s primitive roads and ports. Such aid may become
part of the Belt and Road Initiative, Beijing’s signature effort to extend its
influence by helping other countries finance large-scale infrastructure
projects.
For now, China is providing visible help to
the North in smaller ways. One is by serving as a conduit for money transfers
back home by North Koreans living abroad who are trying to help family members
maintain their improved living standards despite the sanctions.
A restaurant owner in Pyeongtaek, South
Korea, who fled the North several years ago, said she sent the equivalent of
$5,000 a year to her mother, husband and school-age son who stayed behind in
Pyongyang. She uses a money dealer here, not far from the border, to send
$2,500 twice a year.
The money has gone to pay for a tutor for her
son, and also to buy him a $200 secondhand Japanese bicycle, the restaurant
owner said. She asked that her name not be used for fear of attracting the
attention of the South Korean security services, who she fears might not
welcome such money transfers.
While her husband has a good job as a manager
at a state-owned enterprise, she said, they need the money because food is
short after the long winter and the price of rice is rising. She said she sent
the money in Chinese currency, the renminbi, which is used in the North to buy
consumer goods.
Other North Koreans living in Seoul said
relatives had been requesting more money over the last year, not only to ride
out the sanctions but also to cover what they said was the growing cost of
bribes paid to North Korean officials, who are also trying to profit from the
new cash economy.
In Hunchun, one of China’s biggest garment
manufacturers, Younger, recently built a sprawling factory complex where North
Korean workers make men’s suits for the Chinese market. The North Koreans work
alongside Chinese workers, receive the same wages and live in apartment blocks
about three minutes from the plant, a manager said.
Even though the sanctions require that North
Korean workers return home, those working in Hunchun are most likely doing so
legally, local businesspeople said. Their contracts appear to be written for
short-term work, which is not covered in the sanctions, they said.
In Hunchun, seafood sellers said they were
still fetching top prices for North Korean live crab, considered a delicacy
because it comes from the North’s unpolluted waters.
The crabs were trucked on a short trip from
North Korea into the port of Vladivostok in Russia, then south over nearly 60
miles of bumpy road to Hunchun, a journey of up to 10 hours. They said the
detour through Russia gave the crabs a cover of legality, and the Chinese are
building a new road that will allow them to arrive more quickly.
The customs paperwork needed to resume direct
shipments of crab and frozen seafood has already been completed and is ready to
be submitted as soon as sanctions are lifted. That will make the Russia detour
unnecessary, said one seller as he watched over a dozen tanks filled with green
crabs.
“We have been told it will be soon,” he said.
Iris Zhao contributed research from Yanji and
Hunchun, China; Luz Ding from Beijing; and Su-Hyun Lee from Seoul, South Korea.
