North Korean State Agencies "Officially" Resume Smuggling Goods from China
2021-04-22 -- State agencies in North Korea have recently resumed "officially" smuggling goods from China for the first time in more than a year, indicating that trade between the northeast Asian neighbors could start flowing again, sources in the country told RFA.
Freight by rail and ship has not flowed freely from China since the start of the coronavirus pandemic in January 2020. Fearing that the virus could spread into North Korea, Beijing and Pyongyang agreed to close down the 880-mile Sino-Korean border in a move that proved disastrous to an economy already pinched by UN and U.S. trade sanctions.
Many in North Korea who made their living trading in goods from China, including small-time merchants who smuggle goods across the border, were left with no way to support themselves. So-called "official smuggling" on a larger scale by government enterprises, which mainly served as a means to get around the sanctions, also came to an abrupt halt.
With no imports coming in, food prices skyrocketed, but sources told RFA that prices were going down again this year as the government-run agencies recently began bringing in food ingredients from China.
"Since last month, cross-border smuggling activities run by state-run trading companies restarted at a gradual pace," a resident of North Pyongan province in the country's northeast told RFA's Korean Service Monday.
"These days, at local marketplaces here in Tongrim county, the price of imported sugar and flour are falling. Same with Chinese condiments that were in short supply due to the coronavirus crisis. Their prices are going down too," the source said.
The imported dry goods and condiments began to reappear in local marketplaces right before the April 15 birth anniversary of leader Kim Jong Un's late grandfather, national founder Kim Il Sung. Since then, prices of flour, sugar, and MSG-based seasoning fell by about half, while cooking oil fell by about a fourth.
Another source, a resident of South Pyongan province, north of the capital Pyongyang, confirmed to RFA that prices for imported food ingredients had been in decline for about a month in the province.
"In particular, food factories that produce various types of sweets and instant noodles that are made with sugar and flour are concentrated in the inland areas, so now sugar and flour from China is flowing inâ€¦ via a smuggler ship from Donggang, China, and brought here from Ryongchon port in North Pyongan province," said the second source.
"I know that the authorities allowed some trading companies to secretly bring in agricultural products that we desperately needed during the farming season, but for those companies it is difficult to cover the fuel costs with only agricultural goods, so that's why they were eager to also import the more expensive food ingredients and condiments on the market," the second source said.
The resumption of smuggling activities by sea seems to indicate that authorities are getting ready to officially resume trade with China and reopen the Sino-Korean border, according to the second source.
"The national emergency quarantine protocol has not yet been lifted in the border area, but we keep hearing that Dandong and Sinuiju customs will soon reopen," the second source said, referring to the Chinese and North Korean cities on opposite sides of the Yalu River border at the point where the river empties into the Yellow Sea.
"It will probably take a little more time for official trade to start up again. Only national emergency goods are expected to come in by international freight trains."
RFA reported earlier this month that a Chinese freight train loaded with 300 tons of corn in Dandong entered North Korea through Sinuiju on its way to Pyongyang. It was the first international rail shipment to North Korea since January 2020.
The lack of imports in North Korea did not only affect the poor. The elite in Pyongyang also had to do without certain foreign luxuries, according to a report by Seoul-based NK News.
The report said chocolate, dried fruit, Coca-Cola and Chinese imports reappeared in Pyongyang grocery stores after many months.
A former unification ministry official told NK News that the reappearance was "good news" not only for North Koreans, but also those who want to send aid to the country.
Life in North Korea without Chinese trade has been harsh.
UN Special Rapporteur on North Korean Human Rights TomĂˇs Ojea Quintana warned in a report last month that the closure of the border and restrictions on the movement of people could bring on a "serious food crisis."
"Deaths by starvation have been reported, as has an increase in the number of children and elderly people who have resorted to begging as families are unable to support them," said the report.
RFA reported earlier this month that North Korean authorities were warning residents to prepare for economic difficulties as bad as the 1994-1998 famine which killed millions, as much as 10 percent of the population by some estimates.
Kim Jong Un was quoted in state media this month as saying the country faced grim challenges.
"Improving the people's living standards ... even in the worst-ever situation in which we have to overcome unprecedentedly numerous challenges depends on the role played by the cells, the grassroots organizations of the party," Kim said during an opening speech at a meeting of cell secretaries of the ruling Workers' Party.
Reported by Hyemin Son for RFA's Korean Service. Translated by Leejin Jun. Written in English by Eugene Whong.
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