North Korea is probing trading companies in North Pyongan province in charge of trade with China. The move appears aimed at tightening the regime’s grip on trade.
A source in the province told Daily NK recently that the investigation is being led by the Ministry of External Economic Relations and Ministry of State Security, under the cabinet. The investigation is targeting major trading companies in the province, as well as the trade management bureau at the provincial people’s committee.
After the Ministry of External Economic Relations proposed the need to reinforce the state’s total control over trade, North Korean leader Kim Jong Un ordered the ministry to carry out a monthlong heavy-duty investigation alongside the Ministry of State Security.
The trading companies currently under investigation by the two ministries are medium and large entities that have been earning foreign currency by handling state-mandated trading projects with China since before the pandemic.
North Koreans say the investigation was launched to fix these companies’ tendency to prioritize relationships with Chinese traders, as well as their own profits, over trade required by the state. The Central Committee has begun to tighten oversight over these trading companies because it believes their practices are undermining its management and control of trade.
Regime targets veteran traders
The regime sees the investigation as an opportunity to carry out a sweeping reshuffle of the officials in charge of these trading companies.
“This investigation is designed to tame the trading companies by replacing the key officials currently doing business with China with loyal elements,” the source explained.
“The Central Committee intends to use the process to push out problematic officials. Trading officials who have been working with China for a long time are being given revolutionary punishments for things that happened in the past,” the source added.
“Revolutionary punishments” range from reeducation to hard labor.
While the investigation began with major trading companies in North Pyongan province, some expect it will be expanded nationwide.
In short, the authorities want to make an example of the trading companies under investigation so as to scare major trading companies around the country into getting their act together.
Since the investigation was launched, fears of a purge of senior trading officials have been reportedly spreading through the trading sector.
“There haven’t been any purges of trading officials since the pandemic. But now people are saying this investigation may lead to purges, sending a chill down people’s spines,” the source said.
On the ground, traders are worried that the investigation could cause lasting damage to trade with China.
“Trading officials privately say this is ultimately a self-defeating move for the regime. Getting rid of companies and officials with long-standing trading relationships with China will present a serious obstacle to trade going forward,” the source said.
