Visiting Dandong is indeed a rewarding experience, and reporting on it a valuable one for writer and reader alike, but something of the granular Chinese viewpoint remains utterly indispensable to the pursuit of understanding border trade between North Korea and its giant “frienemy.” Or, to put it another way, indispensable to the task of working out how 80% of Sino-DPRK economic activity even happens. Chief Editor Adam Cathcart contributes another timely translation.- Christopher Green, Co-editor

The Golden Age Is Over: Stacking Up Borderlands Sources in Dandong

by Adam Cathcart

In the past month several interesting things happened in and around Dandong. On the edges and within the alleys of this Chinese-North Korean border city, Malcom Moore (The Telegraph) ended up in the back of a taxi with a tattered North Korean military defector with tales to tell. Away from the Japanese colonial-era bridge that has heretofore symbolized every mottled, neon, and bizarre aspect of China-North Korea ties, Mark MacKinnon (Globe & Mail) wandered west to the edges of a new district outside of Dandong to investigate “China’s bridge to nowhere.”

However, when it comes to gauging Chinese intentions or policy implementation in the border region, there are still clear limits to what can be deciphered by a short visit to the city. I’ve personally tried to make up for this by being in the city on an average of two or three times per year for the past decade, including, most dramatically, during the great Dandong flood of 2010. But no sooner is one making headway than it is time to leave again. One way to make up for these limitations is to read the Chinese press surrounding Dandong and bilateral trade with greater regularity, because occasionally a comparative bombshell will be dropped.

One such bombshell appeared to be in the offing in Chosun Ilbo, the Seoul conservative paper which reported on April 19:

A majority of Chinese businesspeople with investments in North Korea are apparently having problems recovering their money and being forced to leave the country. Citing a Chinese businessman in the town of Dandong near the border with North Korea, the Chongqing Daily [actually Chongqing Morning Post] reported on Thursday that close to 100 Chinese investors have been staying indefinitely at hotels in downtown Pyongyang as they wait to recover money. A majority has been unsuccessful so far, and some have even been deported, according to the newspaper.

Explosive! And accurate — if we are talking about the mid-1990s. Somehow the South Korean newspaper completely missed the fact that the Chinese businessman, the source for the explosive claim, was describing a situation that had prevailed “in the early years” of his business associations with North Korea, which dated back to 1993. Moreover, in the Chinese article, the same man’s estimate of “80-100 Chinese businessmen” camping out in Pyongyang in long-term efforts to recover confiscated funds is explicitly connected to the lean years of 1992-1996, when, according the Chinese Embassy in Pyongyang, North Korea owed Chinese companies some $230 million USD.

From a journalistic perspective, to report a businessman’s 2013 recollections of the late Kim Il-song era as “breaking news” happening in the present tense seems more than a little bit irresponsible.

The overall idea remains powerful, given that the Xiyang firm’s ignominious exit from North Korea has left more than a small amount of cautionary carnage for other big Chinese investors to contemplate. And the Xiyang case surely gave the Chosun Ilbo an entry point into depicting dozens of angry Chinese stalking the hallways of the Koryo Hotel, casting long shadows over Pyongyang. There very well may be such Chinese investors in Pyongyang again today (surely Xiyang itself is testing every available opening), but this particular article is not confirmation of such.

Nevertheless, there is actually a great deal of very interesting data in the extensive Chongqing Morning Post article cited by Chosun. The writing in the piece is, by Chinese mainland standards, rather critical of the DPRK and surprisingly frank about the challenges faced by investors there. As Mark MacKinnon had noted in his article, this type of critical discussion exists in inverse relation to the Chinese kind of willful rictus-grin optimism about investment that had been on display as recently as October 2012 at a major trade-fair in Dandong:

While it is interesting enough that the Chinese press would even run such a piece at such a sensitive time in bilateral relations, we need to further note that Chongqing Morning Post is not just any newspaper; it’s a Chongqing newspaper. Is this perhaps a signal from Zhang Dejiang himself, the former mayor of Chongqing and ostensibly North Korea’s closest friend on the CCP Standing Committee?

Like other semi-investigative articles pertaining to North Korea, the following essay had been investigated in late March, but was not released until after April 15, the Day of the Sun (태얄절: the birth date of Kim Il-sung). One wonders how many good Chinese journalistic pieces of a similar vintage have simply been killed or otherwise unpublished under the “pocket veto” of editors in the Propaganda Bureau in Beijing. That this one made it through the net is certainly symbolic of the widening scope for North Korea discussion in the PRC. A few notes by me are made in italics below; the header on UN sanctions appears in the original.

The End of the Era of Huge Profits: Mainland Businessmen Talk Sino-DPRK Border Trade [内地商人谈中朝边境贸易：暴利时代终结],” Chongqing Morning News「重庆晨报」April 18, 2013. Translated by Adam Cathcart.

[Article summary] “Sure, you can do trade with North Korea, but it is best not to invest there.” Within the circle of border tradesmen in Dandong, this sentiment has long since become conventional wisdom. Setting aside the many rumors of Chinese investors at an impasse and unable to collect their debts [from North Korea], for the circle of Dandong businessmen, North Korean’s domestic political and economic changes, along with the current unfathomable situation on the Korean peninsula, remain an immovable shadow over their hearts.

[Article] “You can do trade with North Korea, but it is best not to invest there.” In northeast China’s largest border city of Dandong, local businessmen always warn foreign counterparts arriving from afar that this is the case.

But over the past two decades, there have still been countless Chinese businessmen, cropping up like seashells in Dandong, doing their own business in this highly anticipatory border city.

Unfettered by United Nations Sanctions 「联合国制裁不了」

On March 22 at noon, the sun shines over Dandong, but the bordering Yalu River is still buffeted by a cold wind [依然寒风凛冽].

The spotless sidewalks abutting the Yalu are, as usual, full of small traders wrapped in thick coats, trailing tourists with cigarettes brought in from the Korean side, stamps, and similar commodities. Finding tourists who express an interest in North Korea’s current situation, they state bitterly: “Yesterday was World Sleep Day [世界睡眠日], so over there they really did it well by pulling off an all-day alert.”

“Over there” refers to the other side of the river, North Korea’s largest border city, Sinuiju. On March 21, many of the people in Dandong heard a mournful air raid siren [凄厉空袭警报声] coming from the other side. A day earlier, North Korea’s official media had said that the Korean People’s Army was ” ready for a fight with South Korea and the United States.”

According to one Dandong trader in raw textiles, about two hundred trucks were crossing the bridge per day. “Or thereabouts,” he added. He believes that his own business has nothing to do with [没什么关系], the latest UN Security Council resolution on sanctions against the DPRK, since “We sell civilian goods, and UN Sanctions cannot hinder that.”

According to another local trader, the South Korean government arranged for someone to survey Dandong Port for the purpose of recording the number and variety of goods coming through. Last year, says the trader, he met this South Korean: “That dude makes $2,000! However, he’s always goofing off [不过总在偷懒] so he paid a few hundred dollars to hire Chinese people to help him record the information.”

Pessimism over the state of Chinese-North Korean trade is woven throughout the article, but interestingly enough, the UN sanctions are never themselves blamed for slowing things down. By contrast, Western reports tend to emphasize that trade is ongoing, implying that China is not enforcing sanctions. But the sanctions are on luxury goods, not consumer goods, and Chinese traders and media sources are not at all shy about stating that sanctions have nothing whatever to do with them. The story goes on to discuss the views of some men who have been doing business with North Korea for two decades, and have made good money in the process:

“What will happen in the future? No one has any idea.” Snugly abutting the Yalu River is Jiadi Square in Dandong. Zhao Qiming [a pseudonym], the general manager of a company that trades with China and North Korea, gave a pessimistic prognostication [作了悲观的预判]. Chatting with his old friend, another trading company boss Li Xingtai [also a pseudonym], the man sipped his tea and nodded yes.

Zhao Qiming runs a company that lies just a few minutes’ walk from Dandong Port. Although North Korean officials said the Korean peninsula was in danger of “a situation of imminent nuclear war,” border trade between China and the DPRK continued across the Sino-Korean Friendship Bridge over the Yalu River. From time to time, he could see a few more of the unloaded trucks from across the river slowly approaching. According to statistics, goods transited through the Port of Dandong account for about 80% of Sino-DPRK trade.

Between the two of them, Zhao Qiming and Li Xingtai have tallied over 50 years of business partnerships. Seeing that they are wearing designer clothes and shiny Rolex watches, and given that they’ve been doing trade with the DPRK over the past 20 years, one can see that they have tallied great successes.

“About six or seven years passed; I swear you could make big money then, practically with your eyes closed.” Thus described Li Xingtai of the early DPRK trading situation. He has many proud trades: For example, in 1993, he sold North Korea several hundred thousand shirts that had been overproduced for the Chinese domestic market. “The purchase price was one Chinese Yuan per shirt, but I sold them for two dollars apiece.” […]

The tense situation has had no impact on the Dandong tourism industry. A North Korean official in Dandong responsible for tours to the DPRK [朝鲜旅行社的官员] said that North Korea would shortly be launching new tourism projects and attractions in the country, such as a farm on the outskirts of Pyongyang. “Tourists can visit representations of our rural areas, and also make rice cakes with our villagers,” the official said.

Yu Shuangpeng [于双鹏], the general manager of Liaoning Yalu River International Travel Service Co. [辽宁鸭绿江国际旅行社] said that the present time is the low season [淡季] for tourism in the DPRK. In the first quarter of 2013, his organization brought only about 300 Chinese tourists to the DPRK, which is roughly equivalent to the figure from the same period in previous years. “But [the low number] isn’t because of the tensions,” he said, “because the number of visitors from Western countries has increased slightly.”

Further Reading:

Cathcart, A. The Art of Narrative Propulsion, SinoNK, April 6, 2013.

Green, C. Beware the North Korean Rumor Mill, SinoNK, July 25, 2012.

MacKinnon, M. ‘Ghost city’ of Dandong New District a spectre of North Korea’s paranoia, Globe and Mail, April 24, 2013.

Moore, M. China breaking UN sanctions to support North Korea, The Telegraph, April 13, 2013