Chinese factories have begun officially notifying North Korea’s state trading companies that they will no longer employ North Korean laborers. As one of the largest importers of North Korean laborers, China is heavily affected by a provision in UN Security Council Resolution 2371 that forbids countries from taking in additional North Korean workers above their present levels. The provisions, if implemented as intended, are likely to have a significant impact on the Kim regime’s foreign currency supply.

“We have received reports that Chinese factories here in Jilin Province notified North Korean trading companies that they will no longer accept North Korean workers,” said a Chinese informant during a telephone conversation with Daily NK on August 10. “The managers of some factories suddenly contacted the North Korean officials responsible for placing the laborers to discuss whether or not to continue their work contracts.”

It is understood that some of the Chinese factories that presently maintain contracts with imported North Korean laborer programs will not be renewing or extending them.

Until these recent developments, the standard operating procedure had been for workers to stay for a period of three years. Upon completion of their term, the workers were required to return home and another laborer was sent from North Korea to take their place at the same factory. The Chinese firms hire these workers because the labor costs are much cheaper than employing local Chinese employees.

“Since the new resolution has come into effect, more and more factories are announcing that they will not be renewing their pre-existing worker contracts. The North Korean state trading companies are in a state of shock because they believed that business would continue as usual and the contracts would be extended,” the source explained.

“Even if you just look at Hunchun Factory Park, there were over 6,000 North Korean workers there last year. This year, the number rose to 8,000. But the new UN sanctions resolution contained an unexpected provision limiting the number of laborers, so the Hunchun Factory Park’s plan to expand the number of workers will likely need re-evaluation.”

It remains unclear whether the suspension of new workers and the decision to refrain from extending some existing contracts is limited to Jilin Province, or is more widespread throughout China’s northeastern provinces. However, it appears that the Chinese authorities have been moving to implement the new regulations at a faster pace and in a more proactive manner than they have in the past.

If the Chinese authorities are determined to close sanctions loopholes and enforce the new resolution to its full effect, the number of North Korean laborers in China will decline drastically in two to three years. There are already concerns from Pyongyang that a “freeze” of laborers will hit hard, but if this is coupled with Chinese companies cancelling and refusing to extend existing contracts, the effects will be even more severe.

Due to the current state of affairs, the North Korean authorities have been trying to keep some workers in the country even after the termination of their three year contracts ( You can read more about that here ). Even if there are no official contracts available, orders have been issued to place these laborers in unofficial positions.

Chinese factories will also be impacted considerably by the measures, as their source of cheap labor will begin to dry up. Three provinces in particular – Jilin, Liaoning, and Heilongjiang – have a number of large factories that are predominantly staffed with North Korean laborers (some at over 90%). These factories stand to lose the most under the new UNSC provision.

“If the Chinese factories can’t hire cheap North Korean labor, it will have a damaging effect on the regional economy. Even just looking at the current situation, the implementation of the sanctions by the Chinese government has been faster than we’ve ever seen before. It seems that the central Chinese authorities are trying to change the international community’s perception that China doesn’t enforce sanctions, even if it means that the local economy is negatively affected in the short term,” a separate source in China with knowledge of the matter said.

Similarly, VOA reported on August 11 that the Qatari government will stop issuing visas to North Korean laborers. The report quoted Qatari officials explaining that the country will ban extensions for existing laborers in the country and move to enforce UNSCR 2371.

The European Union has also announced that it is aligning its sanctions list with the latest UN resolution, saying that it will implement all new measures introduced by Resolution 2371, including those related to suspending the use of North Korean laborers.

According to a 2015 UN report, there are over 50,000 North Korean overseas laborers in countries including China, Russia, and the Middle East. Collectively, it is estimated that this workforce earns approximately US $2.3 billion for the regime. Some estimates indicate that the number of workers abroad could be even higher, but gathering conclusive statistics on the secretive North Korean operations is difficult.