Chinese authorities are said to be questioning the head of a local trade company in Liaoning Province for allegedly smuggling materials used for nuclear and missile development into North Korea. The owner and founder of Hongxiang Industrial Development based in the border city of Dandong, Ma Xiaohong, was arrested and has been under investigation for a number of weeks, Daily NK has learned.
“Ma was arrested by Shenyang law enforcement earlier this month and is currently being questioned on suspicions of disguising military goods and equipment banned under global sanctions and smuggling them into North Korea,” a source close to North Korean affairs in China told Daily NK. “Despite the more stringent screening procedures at the customs office that were introduced from March, Ma’s company continued to smuggle banned metal and tank battery components, hiding them in shipments of apple boxes [wherein some boxes contained apples and others contraband].”
The source reported that Ma’s company also sold weapons manufacturing tools, selling dozens at a price of 10 million RMB (1.5 million USD) per piece to North Korean military contacts. By aggressively exploiting the UN sanctions for its own benefit, the firm was able to rake in huge sums of money, the source asserted.
“The profits that Ma accumulated from trading with North Korean defense companies were actually smuggling payments,” the source said. “By providing sanctioned items, Ma made so much money that she even gave Toyotas and imported cars as gifts to some North Korean cadres and Chinese traders.”
The investigation comes at a time when Beijing has come under greater scrutiny for its cross-border interactions with the North after Pyongyang defied strong UN sanctions passed in March and conducted a fifth nuclear test on September 9. Due to the recent nuclear test, some believe that the Chinese government is now moving quickly to conclude the investigation and make the results public, holding Ma’s company accountable for UN sanctions violations.
“Dozens of cadres working for Dandong’s government agencies have been instigated during Ma’s testimony, so it doesn’t look like this will have a simple conclusion,” said an additional source in China with knowledge of the incident. “Seven 5,000-ton ships operated by this company have been impounded and are moored at Donggang Port, while all of the companies that were doing business with Hongxiang are also under investigation.”
In addition, the customs office in Dandong is expected to undergo an extensive reshuffle after failing to stop banned goods on the sanctions list flowing into the North. Some 30 individuals are under investigation in relation to the case, with the central government keeping close tabs on how the events are unfolding, reported the source.
On Monday, The Wall Street Journal reported that U.S. and Chinese officials are targeting Hongxiang Industrial Development for its suspected involvement in criminal activities while aiding the North. It reported that prosecutors from the U.S. Department of Justice visited Beijing last month to inform Chinese authorities of the case, citing evidence that Ma and her company had helped Pyongyang in its nuclear development and in circumventing global sanctions.
