Ex-Minister of Unification Has Gloomy DPRK Bouncing Back

By | August 26, 2016 | No Comments

Parsing the borderland between China and North Korea is a tricky business. Simply being in the region is no solution to the notorious opacity of the DPRK. One can occasionally speak with North Koreans making a living in northeast China, get a visual and olfactory sense of how industrial northeast China is doing, and take in mile after mile of the generally-deserted North Korean border. But what does that really tell us?

One thing the Sino-NK team has repeatedly found out during forays to the the region is that every Chinese urban center has a slightly different orientation toward North Korea. Dandong, Tonghua, Jian, Yanji, Hunchun, and of course the gateway to Manchuria at Shenyang are all unique. For Pyongyang, the economic activities taking place in those Chinese cities and the economic production zones around them have an outsized impact back home. Indeed, as Adam Cathcart and I write in an upcoming edited volume on Chinese foreign policy under Xi Jinping, accurately dissecting the scope and character of economic activities in the border region can tell you a surprising amount about the political relationship between Beijing and Pyongyang.

Lee Jong-seok is the latest to visit the border region and emerge with a report – a policy briefing, in this case – on what he discovered there. (Sino-NK’s Tumen Triangle Documentation Project did the same in the spring of 2015.) Lee is not just a scholar or analyst — he accompanied Kim Dae-jung to Pyongyang in June 2000 and was Minister of Unification in the administration of the late Roh Moo-hyun in 2006.1)In the United States, Lee was a rather unpopular choice for the MOU post – Washington reportedly feared he was going to carry the Sunshine Policy “further to the left.” Given these affiliations, perhaps it is not surprising that he believes conditions in North Korea today are improving. His point of view is that states with an interest in regional peace, security, and economic growth ought to respond with cool heads to a strengthening DPRK, creating structures and incentives to take advantage of the Kim regime’s intent to, at least in part, open up to its near-abroad.

Lee visited the border region with two colleagues from the Sejong Institute Department of Unification Strategy Studies: Cheong Seong-chang, head of the department and a conservative analyst known, inter alia, for strongly supporting the idea of South Korea acquiring an independent nuclear deterrent, and Lee Seong-hyon, the author of a timely and extremely pertinent 2016 paper in the International Journal of Korean Unification Studies, “Why Did We Get China Wrong? Reconsidering the Popular Narrative: China will abandon North Korea.” The Sejong Institute policy briefing, from which the following Pressian translation is derived, is available here. There is an official executive summary available in English here.

Business across the old rail and road bridge at Dandong can sometimes seem very brisk, as Lee writes. But it is not like this all the time. | Image: Destination Pyongyang

Trade volumes going across the old rail and road bridge at Dandong can sometimes seem very high, as Lee writes. But it is not like this all the time. | Image: Destination Pyongyang

Lee Jae-ho, “북한 국경지역, 2015년 ‘깜깜’…2016년은?” [North Korean border region, 2015 ‘dark and gloomy’… and 2016?], Pressian, August 22, 2016.

Is North Korea being isolated by sanctions? On the contrary, North Korea-China trade is on the rise.

It looks as if Resolution 2270, the UN Security Council’s [most recent] sanctions resolution on North Korea, has not had any notable effect. Trade between North Korea and China has gone up year-on-year, and the power supply and construction conditions along North Korea’s border with China are improving.

On the 22nd, researcher (and former Minister of Unification) Lee Jong-seok of the Sejong Institute published a policy briefing, “North Korea-China economic exchanges and North Korean economic reality seen from the border.” Lee has just returned from an August 6 to 13 research trip to the North Korea-China border region.

In his report, former Minister Lee revealed:

In spite of UN economic sanctions and declining prices for the mineral products that constitute North Korea’s primary exports, the downward trend in North Korea-China trade from the first half of last year has halted, with trade in the first half of 2016 rebounding after a brief decline (in April and May).

According to Chinese customs data, the total value of North Korea-China trade rose 2.1 percent year-on-year in the first half of 2016, up from 2.488bn dollars to 2.558bn dollars .

Lee explained:

Trade across the Amnok (Yalu) River railway bridge at Dandong has become exceedingly brisk, which reflects this fact. In particular, traders on the ground say that in their assessment China-North Korea trade has noticeably increased since the decision to deploy THAAD, and smuggling is also happening quite openly now.

Sanctioned cross-border commercial trade also seems to be well underway. “The commercial trade zone in Dandong, Liaoning Province has been operational since July, and according to zone officials it will be officially launched in or around the end of September,” Lee revealed.

In the words of a Chinese official, he added, “The commercial trade zone over in Sinuiju, North Korea is currently operating as normal.”

In addition, the entry of North Korean workers into China looks to be continuing apace. In the estimation of former Minister Lee, as of late August there were around 30,000 North Korean workers residing in Dandong, and a substantial number have entered the IT tech sector in the city.

An anonymous tech firm on the outskirts of Dandong, which we hear employs a significant number of North Korean workers. | Image: Destination Pyongyang

An anonymous tech firm on the outskirts of Dandong, which Sino-NK hears employs a significant number of North Korean workers. | Image: Destination Pyongyang

At the same time, Tumen City and the Chosun Joint Venture Investment Committee signed a contract for the employment of 20,000 North Korean workers and an industrial park was built. As of August, there appeared to be approximately 4,000 North Korean workers employed there.

Lee said, “It is estimated that right now there are a minimum of 70-80,000 North Korean workers employed in China, and that it will top 100,000 in due course. North Korean people regard working abroad as an opportunity to make a lot of money, so within a few years this is likely to reach a few hundred thousand.”

The construction of infrastructure projects for economic cooperation is also proceeding actively. First and foremost, the New Tumen River Bridge should be complete before the end of the year, while a second bridge and customs house between Jian in China and Manpo in North Korea is under construction. The erection of transmission towers between Hunchun and Rason for the provision of power to Rason City is also continuing, as is the construction of a hydroelectric power plant on the Amnok River.

North Korea was dark and gloomy in 2015… and this year?

Unsurprisingly, as economic cooperation between North Korea and China becomes more active, so North Korea’s power situation looks to be taking a turn for the better. Based on his observations of border cities, Lee said,

I got the feeling that the power situation in Sinuiju and Hyesan was better than it was last October. Specifically, in the case of Sinuiju there were lots of cars coming and going at night, and in Hyesan almost every household was using electricity until late into the night.2)Lee previously visited the border region in October 2015. At the time, he published a two-part policy briefing available here. The 2016 policy briefing contains a number of old images of border cities in comparison with images from this latest trip.

Reporting the words of a businessman who recently returned from a trip up to Rason, Lee conveyed news that “the power situation in Rason City has improved considerably. Each household there is able to freely use electricity in the range of 2KWh. Because power supplies have taken a turn for the better, sales of solar panels have slumped this year after a bonanza year in 2015.”

Construction in urban centers along the border is also progressing well. Lee revealed, “In Sinuiju you could spot new buildings going up all over the place, including a shopping center for Chinese tourists, while in Hyesan we witnessed a large number of new buildings.”

“This is the result of mutual convergence between North Korean strategic imperatives, which are about fulfilling the policy requirements of Kim Jong-un’s wish, formalized in 2013, to see overseas economic opening, and Chinese factors, which concern the central government’s strategy of developing the country’s frontier regions along with local governments and businesses’ need for greater economic cooperation with North Korea,” Lee claimed. “[North Korea-China economic cooperation] has acquired a structural character as it grows.”

According to Lee:

Economic cooperation between North Korea and China is not merely a case of one-sided Chinese support for North Korea; we need to recognize that this expansion is happening because it is in the interests of both parties. We should be aware that in this situation, there is very little chance of the Chinese government interpreting UN Security Council Resolution 2270 in terms of strong sanctions on North Korea and implementing it accordingly.

“The reality is that North Korea’s economy is growing, and we should take countermeasures based on that,” Lee went on. “We must do more than economic sanctions, which have their limitations; South Korea, North Korea and China should create structures for economic cooperation. We need to find ways to encourage and support the expansion of North Korea’s economic opening,” he emphasized.

Source: Lee Jae-ho, “북한 국경지역, 2015년 ‘깜깜’…2016년은?” [North Korean border region, 2015 ‘dark and gloomy’… and 2016?], Pressian, August 22, 2016. Translation by Christopher Green.

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1. In the United States, Lee was a rather unpopular choice for the MOU post – Washington reportedly feared he was going to carry the Sunshine Policy “further to the left.”
2. Lee previously visited the border region in October 2015. At the time, he published a two-part policy briefing available here. The 2016 policy briefing contains a number of old images of border cities in comparison with images from this latest trip.