North Korea's Border Lifeline

Cargo trucks rumble across the Friendship Bridge that links North Korea and China, carrying goods back and forth over the border. With a per capita income under US$2,000 North Korea might be poor, but the crucial border trade is helping make Dandong rich. The city is China’s trading hub with North Korea with some 70 percent of all Chinese exports to its neighbor passing through its gates.

With increasing conjecture that Kim Jong-un, the youthful leader of North Korea (see adjoining story), is moving to liberalize the economy, Dandong, on the Chinese side of the river from the North Korean town of Shinuiju, can be expected to become even more important to North Korea's trade. As it is today, anyone who does business in North Korea does it from Dandong, says businessman Wang Yuangang.

“Industrial goods form the bulk of the cargo,” he says, “As North Korea is under an economic embargo from the United States, it faces all kind of shortages, including electricity, and that affects industrial development. So the country needs many supplies from us.

The managing director of the Dandong Frontier City Trading Company, Yuangang says his company trades in spare parts and basic commodities such as food, clothing and household goods.

According to Chinese Customs statistics, trade between the two countries jumped by more than 60 percent last year, reaching US$5.6 billion.

Standing by the Yalu River, Dandong is China’s largest border city. More than 80 percent of the trade through in the area goes to North Korea, but goods from Dandong are also exported to South Korea, Japan and the United States.

According to the city’s foreign trade department, the local government organizes two annual trade exhibition tours to North Korea, with several hundred Chinese businessmen attending.

This October, Dandong will also hold the first China-North Korea Expo, covering economic, cultural and tourism themes. It’s all part of the city’s efforts to consolidate its role as the centre for North Korean trade.

A string of new western style cafes in the city is another sign of Dandong’s growing wealth. They are filled with the aroma of brewed coffee, live piano music – and people making business deals on anything from real estate to importing goods, to sourcing contract workers.

Dandong traders often act as “middlemen” to broker deals for outsiders who want to establish contacts in North Korea.

“For the past years, North Korea has practiced a ‘closed door’ policy toward the outside world and it remains very mysterious,” said Wang Yuangang, who has led a number of trips into North Korea to scout for business.

“Many people are interested in doing business there, but it’s difficult to enter without the know-how or the right contacts,” he says. Yuangang says it is hard for Chinese businessmen to gain access and even harder for other foreigners.

But Dandong isn’t just about buying and selling goods – the border trade has also fuelled the local services industry. Downtown and along the riverfront there are lines of hotels, entertainment venues, restaurants and souvenir shops that cater to locals, business travelers – and even tourists.

The party runs until late in the night in Dandong, but in North Korea, just across the river and the reason for all this prosperity, it’s lights out and pitch dark after 8 p.m.

North Korea’s mystery is a strong attraction, but with the country still closed, Dandong is as close as most people can get – and that brings in the tourists. Last year, the city hosted around 26 million domestic tourists and 400,000 foreign visitors, which translates to some US$4.3 billion for the local economy.

Liu Yi, 32, owns two small family-run motels. He invested about $80,000 to start up his business and he’s about to break even after just two years. He says Dandong’s success isn’t only because it’s geographically close to North Korea. Cultural and language connections also play a big role.

“This area has a large Chinese Korean ethnic minority. There are also many North and South Koreans who have been living here for a long period of time for business,” he says.

Kim, who goes by one name, opened her “Pyongyang Barbecue” restaurant downtown a decade ago and is also a member of China’s minority Chosun community, a Korean ethnic group.

She says her restaurant doubles as an office for North Korean trade deals – which also draws on the language and cultural links she shares across the border.

“I opened this restaurant to maintain relations for border trade. I travel to North Korea frequently, and I also provide translation services for Chinese and North Korean businesses,” she explains. Her customers are mainly North and South Korean businessmen who usually come for dinner, she says, while tourists come during the day. Of all of them, she says, North Korean customers spend the most.

“Usually the North Koreans are paid for by their Chinese business counterparts, but generally the North Koreans that come to Dandong for business are rich,” she says, pointing out a common misperception.

“People always say North Korea is poor, but not all of them are.only the common people are poor.”

(This article was first broadcast on Asia Calling, a regional current affairs program produced by Indonesia’s independent radio news agency KBR68H)