If China falls out with North Korea, then Russia will step in

27 04 2017

Pyongyang-MoscowKirsty Needham (Sydney Morning Herlad, Beijing, 24 APRIL 2017)

Chinese President Xi Jinping has told his US counterpart Donald Trump that Beijing opposes any action on the Korean Peninsula that goes against UN Security Council resolutions.

The phone call between the two leaders came as Chinese media reported on a rift between Beijing and Pyongyang, with North Korean state media criticising China as “dancing to the tune of the US”…

The US has repeatedly urged China to use its economic clout to put pressure on North Korea to abandon its nuclear program, warning that if China cannot produce a solution, the US may act alone.

Mr Xi told Mr Trump the international situation was changing rapidly and it was important the US and China maintain close contact, Chinese state media reported.

“Xi Jinping stressed that China is firmly against any behaviours that violate the UN Security Council’s resolution, at the same time it hopes all parties concerned maintain restraint, avoid doing anything intensifying the peninsula situation,” CCTV reported.

Asked about the North Korean media attack, a Chinese Foreign Ministry spokesman said: “China’s position is consistent and clear and the relevant party should be very clear about that.”

Chinese experts are saying cutting oil would be the toughest sanction China could impose – it was last done in 2003 for just three days.

North Korea’s mining industry would be severely hit if China cut energy supply to the regime.

The front page of North Korea’s Rodong Sinmun newspaper on Monday praised the DPRK’s mining industry as self-reliant, exceeding capacity and “smashing the enemies’ sanctions”.

Kim Jong-un sent congratulations to a magnesite mine – a mineral that is exempt from UN sanctions. North Korea has the world’s second largest deposits of magnesite, a raw material listed as “critical” by the US and the European Union and a key component in smartphones and aircraft. China has the world’s largest deposits.

Leonid Petrov, an ANU fellow, says China is buying other rare earth minerals that are vital for high-technology products at half price from North Korea. He says if relations between Pyongyang and Beijing continue to deteriorate, Pyongyang could cut off sales to China and find new export markets elsewhere.

“If China falls out with North Korea, then Russia will step in. North Korea allows China and Russia to compete for concessions and ports and fishing,” he said.

See the full article here…


How the Hell does North Korea Manage to Earn Foreign Exchange?

19 04 2017

Kaesong Industrial Park - workers(Charis Chang, 2017.04.18, www.news.com.au) From the outside North Korea looks like an impoverished state cut off from the rest of the world. But during its weekend procession, the isolated regime managed to put on an impressive display of its rockets and military strength, in defiance of growing American warnings about its military capability.

While many have the impression of North Korea being a poor country that can’t feed its own people, Leonid Petrov told news.com.au that it had large stockpiles of natural resources that it used to fund its weapons research.

“North Korea is a mountainous country that has huge natural resources including deposits of high quality coal, gold, silver, uranium, iron ore and rare earth metals,” said Dr Petrov, a visiting fellow at the Australian National University College of Asia and the Pacific.

He said North Korea had exported its minerals to allies such as China and the Soviet Union for decades until the collapse of the communist bloc. Since then it had been more proactive in international trade, although the tightening of sanctions has seen its export ability curtailed recently.

Dr Petrov said China in particular had maintained trade in North Korea and was keen to keep a monopoly on its rare earth metal trade.
“So China buys everything North Korea is prepared to offer (of its rare earth metals),” he said. These metals are important because they are used the production of many 21st century products like mobile phones, computers, LCD screens and cars.

Another way that North Korea earns its money is by exporting its workers to China, Russia, the Middle East, Eastern Europe and South East Asia. In fact there were no visa requirements between North Korea and Malaysia until early this year, when tens of thousands of North Korean workers were deported following the assassination of North Korean president Kim Jong-un’s older brother Kim Jong-nam.

“Tens of thousands of North Koreans are sent overseas to work in restaurants, construction sites, as vegetable growers and builders of monuments in places like Africa,” Dr Petrov said.

“Dictatorships like big projects and North Korea can offer them labour to build big monuments, highways and airports.” Dr Petrov said the “lion’s share” of the worker’s wages went to the North Korean government.

North Korea also welcomes foreign investment. The Egyptians have invested in the country’s telecommunications network, concrete factories and construction industries, while the Chinese are keen on fishery resources, the mining industry and have developed a network of supermarkets selling Chinese-made consumerables.

Previously North Korea also benefited from co-operation with South Korea, which invested hundreds of millions into the Mt Kumgang resort where South Koreans and foreign visitors could stay and go mountain climbing. The Kaesong Industrial Park, which produced goods using South Korean know-how and North Korean labour, also gave it a financial boost until it was shut down last year following North Korea’s fourth nuclear test.

Dr Petrov said until last year China was also providing North Korea with other resources it needed such as crude oil and petroleum at “friendly prices” or possibly even for free.
It’s this type of trade that the Trump administration and the Australian government wants to block.

“They’re keen to see China stifling North Korea to death and causing the economic collapse of North Korea’s economy, which is unrealistic,” Dr Petrov said.

He said China sacrificed more than 250,000 soldiers during the Korean War to support the North Korean government. “It’s wishful thinking that China would just turn the tap off and allow the North Korean regime to implode.

“China understands that this would cause chaos in North Korea, the absorption of North Korea into South Korea and the subsequent advance of American troops to the Chinese border.

“So China is not going to allow the economic collapse of North Korea.” Dr Petrov said China was more likely to demonstrate its anger through ceasing economic co-operation temporarily, such as when it suspended the importation of coal after the assassination of Kim Jong-nam. “It bites but is not deadly,” he said.

But Dr Petrov said these types of actions were probably not going to be effective in curbing North Korea’s ambitions as it could always turn to Russia to help. “If China ceases economic co-operation, then Russia steps in and will continue doing the same,” he said.

“North Korea knows that well and plays off Russia against China, allowing Moscow and Beijing to compete for concessions on North Korea’s mining industry, fisheries and port facilities.” Russia is interested in North Korea because it sees it as a good market for Russian gas, oil and electricity. Russia believes North Korea could also potentially open the corridor for the export of energy to South Korea.

It sees North Korea as part of a potential transport corridor stretching from South Korea to Europe, via Russia’s Trans-Siberian Railway. “Russia is not interested in the collapse of North Korea but the stability and co-operation with North Korea,” Dr Petrov said.

Even other countries have had a hard time enforcing sanctions against North Korea.
A United Nations expert team released a report last month that found North Korea had managed to avoid sanctions by using Chinese front companies and other foreign entities to disguise where its goods were coming from. Last year it managed to continue its export of banned minerals and also has access to international banking.

Part of the problem is how different countries interpret what is banned by the sanctions.
One example was highlighted after Austrian ski equipment was found at the luxury Masik ski resort in North Korea. Austria later said it didn’t think ski lifts were included in the European Union’s definition of luxury goods prohibited from being sold to North Korea.

An Australian brand of ski clothing was even manufactured at the Taedonggang Clothing Factory in Pyongsong from 2014, but the company said it was not aware of the problem until after production had been completed and shipped to retail customers. It took two years for the company to sever its production line.

When asked how the conflict with North Korea could be resolved, Dr Petrov said: “Stop the war, end the conflict, reconcile and co-operate”. Dr Petrov believes that North Korea had a chance for survival if it could resume co-operation with South Korea, and this could happen if South Korea changed leadership at its May 9 presidential election.

He said co-operation did happen during the 10 years of the Sunshine policy that encouraged interaction and economic assistance between the two countries from 1998 to 2008, but the US actions were very important.
He said North Korea initially froze its nuclear program according to an agreement made when Bill Clinton was president but his successor George Bush scrapped this, which forced North Korea to resume its program.

See the full article here… 

Seminar on Business Opportunities in North Korea

2 03 2009

picture-025Seminar Ondernemen in Noord Korea
Woensdag 4 maart, 14:00 – 17:30
KVK Den Haag, Randstadzaal
Koningskade 30, 2596 AA Den Haag
Program in English here..

De financiële en de economische situatie zorgt voor nieuwe uitdagingen. Bedrijven moeten snoeien in de kosten en nieuwe afzetmarkten zoeken. Op al deze gebieden liggen er kansen in DPRK. De Democratic People’s Republic of Korea ofwel Noord Korea is één van de laatste landen met een Marxistisch regime en al decennialang één van de meest geïsoleerde landen ter wereld. Buitenlandse ondernemers hadden tot en met de tweede helft van de jaren negentig nauwelijks toegang tot dit land. Geïnspireerd door de economische successen in buurland China, opent Noord Korea langzaam haar deuren voor buitenlandse ondernemers. Om buitenlandse investeringen aan te trekken, richtte het land enkele vrijhandelszones in waarin marktregels gelden. Op 4 maart organiseren het NCH, de Dutch Korean Tradeclub – DKTC samen met de Kamer van Koophandel Den Haag en de sponsor VNC Asia Travel een (Engelstalig) seminar over Ondernemen in Noord Korea om Nederlandse bedrijven in te lichten over de zakelijke mogelijkheden in Noord Korea.

Op dit seminar zal een vertegenwoordiger van de Noord Koreaanse ambassade in Bern, Zwitserland een presentatie geven over de handels- en investeringsmogelijkheden in Noord Korea. Verder zal Paul Tjia van GPI Consultancy (website GIP) ingaan op de mogelijkheden om ICT-werk uit te laten voeren in Noord Korea. Paul Tjia zal tevens informatie verstrekken over de laatste handelsreis die in september jl. plaats vond en de plannen toelichten voor de volgende handelsmissie naar Noord Korea die van 9-16 mei a.s. zal plaatsvinden. Professor Evert Jacobsen, werkzaam bij de Universiteit van Wageningen, zal zijn presentatie wijden aan de mogelijkheden op het gebied van de agrarische sector en dan in het bijzonder over de samenwerking met de Noord Koreaanse overheid m.b.t. de teelt van (poot)aardappelen. De heer Kees van Galen van VNC ASIA TRAVEL (website VNC) zal een presentatie geven over de ontwikkeling van het toerisme naar en in Noord Korea. Egbert Wissink van NovolinQ BV (website NovolinQ) zal in zijn presentatie ingaan op de strategische en economische ontwikkelingsmogelijkheden voor de Nederlandse Industrie in Noord Korea. Het Seminar zal worden voorgezeten door Willem Lobbes, bestuurslid van de Dutch Korean Tradeclub.

Dit seminar is tevens bedoeld als een kick-off voor de geplande handelsmissie van 9-16 mei naar Noord Korea. Tijdens deze reis zal men in staat gesteld worden om diepgaand de concrete zakelijke mogelijkheden te verkennen. Op basis van uw wensen worden afspraken gemaakt met bedrijven en organisaties in Pyongyang. Tevens zal de 12e Pyongyang Spring International Trade Fair bezocht worden. Zie website.


De drempel blijft nog hoog

6 02 2009

kaesong-industrial-parkDoor: Stefanie Vermeulen
Gepubliceerd: maandag 2 februari 2009

See the full text in Dutch here…

See the English translation here…

Afgelopen najaar reisde een Nederlandse handelsdelegatie naar Pyongyang om de outsourcingmogelijkheden op IT-gebied te onderzoeken. Het land ontwikkelt moderne softwaretechnologie, maar het zelf gebruiken doet het nauwelijks.  […]

We zouden er nog vaker tegenaan lopen tijdens de Nederlandse handelsmissie naar Noord-Korea die afgelopen najaar plaatsvond; internationale ondernemers, zowel klein als groot, opereren in anonimiteit met Noord-Korea. Zakendoen met het streng communistische land is omstreden; de Amsterdamse wethouder Lodewijk Asscher riep voor aanvang van de handelsmissie nog op tot een boycot. Handeldrijven doe je niet met een ‘afzichtelijk regime,’ vond hij. Daarop trok de Amsterdamse Kamer van Koophandel, een van de organisatoren, zich terug.

Ondanks de kritiek besloot outsourcingconsultant en mede-organisator van de reis Paul Tjia de reis door te zetten. ‘Wat de mensenrechten of de politieke situatie betreft begrijp ik de kritiek. Maar ik denk ook dat handel een goede rol kan vervullen voor de ontwikkeling van een land. Kijk naar China. Juist door de economische ontwikkelingen is er een middenklasse ontstaan die ook democratische rechten eist.’

Ook Leonid Petrov, hoogleraar Aziatische geschiedenis aan de nationale universiteit van Australië juicht westerse handelsinitiatieven naar het straatarme Noord-Korea toe. Petrov is meerdere keren in Noord-Korea geweest en ziet dat het land de laatste zes jaar vooruit is gegaan, doordat staatsbedrijven zoals SEK zich meer op internationale handel richtten. ‘Sommige politici vinden dat je geen zaken moet doen met Noord-Korea, omdat het een schurkenstaat is die de mensenrechten schendt, maar ze moeten zich realiseren dat je de bevolking, die hongerlijdt, er juist mee helpt. Noord-Koreanen die in de exportmarkt opereren hebben meer voedsel, kleding en elektriciteit dan de rest van de bevolking.’ […]

Blijft de vraag of deze ontwikkelingen zich zullen voortzetten. Met de eerste tekenen van internationalisering lijkt Noord-Korea eenzelfde soort weg in te slaan als het China van dertig jaar geleden. Maar de toekomst van Noord-Korea is momenteel uiterst onzeker. Door zijn langdurige afwezigheid van het publieke toneel wordt aangenomen dat de gezondheidstoestand van Kim Jong Il slecht is. Officieel is nu bekendgemaakt dat zijn zoon Kim Jong Un hem gaat opvolgen.

Of dat werkelijk gaat gebeuren, blijft echter onzeker. Leonid Petrov ziet ook een rol weggelegd voor het leger. ‘Als het leger de macht grijpt, zal het land economisch achteruitgaan. Militairen zijn geen zakenmensen. Militairen willen de bevolking indoctrineren, opdat ze goede soldaten zijn.’ Petrov is optimistischer over een eventuele opvolging door Kim Jong Un. ‘Zijn zoons zijn geen guerrillastrijders, maar zakenmensen die over de hele wereld hebben gereisd. Het land kan een enorme ontwikkeling doormaken als zij de macht overnemen.’ Een kwestie van afwachten dus. ‘En in de tussentijd’, zegt Petrov, ‘moeten we onze voet tussen de deur zetten, zakendoen met Noord-Korea en hopen op het beste.’

See the full text in Dutch here…

See the English translation here…