Chinese-Koreans in North Korea take advantage of international sanctions

North Koreans sell goods on the street in the North Korea-China border region
North Koreans sell goods on the street in the North Korea-China border region. Image: Kang Dong Wan, Donga University

North Korean members of the entrepreneurial class and trading officials have been experiencing difficulties in business dealings due to international sanctions, which Chinese-Koreans have taken advantage of to earn considerable profits through trade with North Korea.

“International sanctions are causing immense difficulties for trading companies,” a source in North Pyongan Province told Daily NK on April 24. “Ordinary North Koreans have less money to spare and are just buying necessities and not much else. This means the donju (newly affluent middle class) aren’t making much money, either.”

Consumption has fallen in North Korea due to the country’s economic difficulties and trading companies and donju involved in the trade of market goods are facing a difficult business outlook.

“Chinese-Koreans are making a lot of money through small-scale rather than large-scale businesses. They’re able to travel between China and North Korea much more easily than ordinary North Koreans, and they buy goods to be sold in North Korea every time,” he said, adding that “they always end up selling all of their stock.”  

“Chinese-Koreans are selling what consumers want so they’re doing good business. They are supplying goods that consumers want more quickly than donju are able to deliver,” he explained.

Chinese-Koreans typically hold Chinese nationality and can freely travel between the two countries with relative ease. They are also more free to travel around North Korea itself and government authorities do not intervene as much when they seek to import and sell foreign goods in the country.

A source in South Pyongan Province told Daily NK that Chinese-Koreans use these advantages to quickly bring in goods in demand to make profits.

“A product that costs 1,500 USD imported from China will be sold within a day or two. It’s not because people are buying in large volumes; I’m just able to respond to market demands more quickly,” she said, quoting a Chinese-Korean source.

Some North Korea observers have suggested that some Chinese-Korean business people are actively using smuggling routes from China into North Korea to transport items in violation of international sanctions. They also raise concerns that significant amounts of foreign currency are also being brought into North Korea.

Chinese-Koreans dealing in small-scale business activities would have difficulty smuggling in significant volumes of goods that violate international sanctions, including fuel, coal, minerals, agricultural goods, and electronic equipment. Even if they were to smuggle such goods into the country, it would only be in small volumes.

There are signs that some parts of the North Korean economy are shrinking and this has led some observers to suggest that international sanctions are impacting the country’s civilian economy.

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