China’s government recently refused to permit the export of a shipment of rice into North Korea, Daily NK has learned. An expert Daily NK spoke with suggested that China appears to be putting the brakes on “unofficial transactions” with North Korea.
According to a Daily NK source in China on Sept. 17, a North Korean trade organization recently tried to import around 20,000 tons of Chinese rice. However, the import process has been put on hold due to new regulations set by the Chinese government.
The source explained that the North Korean trade organization acquired the rice through a Chinese trader, but Chinese authorities are not proceeding with administrative procedures to permit the export of the shipment.
In short, it appears the Chinese government is taking a careful look at rice exports to North Korea and preventing grain from being exported without its permission.
North Korean trade officials have reportedly anchored a ship at Dalian Port in Liaoning Province, China, and have been ready to load the rice onto the boats.
Chinese traders, for their part, have offered to provide RMB 100,000 (around USD 15,400) to transport rice to the port through local vendors. However, no one has taken up the offer because of Chinese crackdowns on unofficial trade.
The North Korean trade organization uses party funds approved by North Korea’s Central Committee. If any transactions are canceled or delayed, the organization must explain why and face penalties.
Typically, North Korea pays 30-50% of the price of a shipment from China in advance. The rest of the cost is paid when the goods are received.
Daily NK understands that the North Korean trade organization has already made an advance payment for the rice.
As the payment was made without actually receiving the rice, any delays or cancellations in rice imports is expected to lead to punishments for the trade organization.
“The Chinese government has recently taken measures to ban unofficial transactions with North Korea,” a North Korea expert who requested anonymity told Daily NK. “The Chinese government intends to only permit official transactions based on [agreements made between the two countries].”
The expert further explained that “In addition to rice, the Chinese government has banned North Korean trading companies from unofficially importing goods through Chinese traders several times” and that “China is giving the signal that trade needs to be done through official channels.”
North Korean trade-related officials have reportedly commented on the situation, saying: “China’s power over North Korea has grown a lot after the border closure” and that “China seems to be trying to ‘tame’ North Korea.”
Daily NK was unable to confirm whether these export measures are temporary or not. If China continues to crack down on unofficial trade, however, trade issues between the two countries may continue even if broader trade opens up between the two countries in the future.
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