Recent reports from North Korea have
revealed the prevalence of the practice of repackaging Chinese-made goods in
North Korean factories to make it appear as though they have been produced
domestically. This development follows repeated calls by Kim Jong Un for a cure to the nation’s “sickness for preferring foreign-made goods.”
Local sources told Daily NK they see this as an attempt for the young leader to “bury his head in the sand” rather than
face the fact that domestic factories lack the capacity to engage in quality
A source in South
Pyongan Province told Daily NK on January 21st that when Chinese goods enter the
country, rather than going directly to the market with their country of origin
clearly marked, it is becoming a common practice to relabel them with North Korean manufacturing stickers, designs, and markings before they hit the shelves to pass them off as local merchandise.
Daily NK verified this news with an
additional source in the same province as well as a source in the capital.
A short time ago it was the donju [new
affluent middle class], engaged in wholesale/retail operations, who would store
goods in their own warehouses before releasing them to the markets. But now the
regulations have altered, giving state-run factories the exclusive right to do
so. Currently, Chinese goods that pass through these factories are rebranded as homegrown products with North Korean packaging before being sold. Although the practice started
in a few factories, now it is quite widespread.
During his leadership Kim Jong Un has repeatedly underscored the importance of domestic production, with the most recent iteration encouraging the nation to “escape the importation sickness” and “increase the ratio of domestic
good consumption.” While a worthy idea on paper, the reality is that North
Korea’s languishing state-run factories lack the technology and know-how to produce
most of the goods that are so readily imported from China.
Consequently, factories have concluded that
they have no choice but to resort to the desperate measure of simply
repackaging foreign-made goods in an effort to comply with the leader’s most recent prescription. The repacking scheme seeks to fuel domestic demand for North Korean goods,
which are generally regarded by the public as low-quality and undesirable, by
improving the public’s image of products bearing North Korean brands.
“As North Korea’s market expands, anyone
selling goods is able to make a profit, but the manufacturing capabilities of
domestic factories are not able to meet the increased demands of consumers,”
our source explained.
For example, when North Korean Choco Pies
first hit the market “people bought them because they were a novelty,” she
said. “But people quickly caught on to the inferior quality of the domestic snack relative to the original [South Korean] version of a treat they had long enjoyed.
“Bearing these realities in mind state-run enterprises saw that the sensible, practical answer was just to employ this crafty trick of repackaging
foreign goods,” the source pointed out. “With repackaged goods, Kim Jong Un can
say ‘Look, we’re making this stuff too!’ And fear of reprisal from ‘above’ makes factory heads feel that they have little alternative but to turn to cheap tricks.”
She then remarked dryly, “It appears that
the regime is under the impression that they can claim to have domestically
developed a product when all they’ve actually done is assemble or package it
somehow. Lacking the resources and skills to develop the necessary technology
themselves, all they can do is try to manufacture propaganda about it instead.”