North Korea has restarted state-sanctioned smuggling along the Hyesan border, with regime-backed trading firms scrambling to capitalize on the Aug. 25 green light for covert cross-border commerce.
Speaking on condition of anonymity, a Daily NK source in Ryanggang province said that trading companies in Hyesan “were chafing because they couldn’t move the products they bought quickly as the suspension of state smuggling lasted longer than expected. However, with the resumption of state smuggling from Aug. 25, they are taking a breather.”
State smuggling at the Hyesan border was suspended with North Korean leader Kim Jong Un’s visit to Samjiyon last month. Its resumption has been continually delayed as the Yalu River’s water level has risen due to monsoon rains.
Trading companies suffered because they could not export goods stored in North Korea to China or import goods stored in China to North Korea. Instead, they were simply counting the days until the state-sanctioned smuggling resumed.
The Trade Administration Office of the Ryanggang Province People’s Committee recently received an order from the Ministry of Foreign Economic Relations instructing it to “resume state-led smuggling from Aug. 25.” The order was relayed to trading companies through the trade-related departments of the Hyesan People’s Committee.
Welcoming the order, the trading companies immediately began to prepare for the resumption of state-sanctioned smuggling. Some trading companies scrambled to borrow money to buy additional export goods.
Companies scurry to obtain items for export
Since prices are likely to rise as demand for export items increases, trading companies must act quickly.
“Some trading companies moved quickly to secure items for export, such as pine nuts, as soon as they received the order that opened up smuggling,” the source said. “Some companies mobilize various methods, including using their contacts to buy items first.”
A trading company in Hyesan took out a one-week loan to buy up export goods at a slightly higher price than other trading companies. In this way, companies are competing with each other to secure export items, knowing that they can make a profit if they can get their hands on the goods.
Meanwhile, even the general public in Hyesan has heard about the resumption of government-sanctioned smuggling, and everyone welcomes the development.
“When the price of export items goes up, the people who deal in those items can make more money, so they’re happy,” the source said. “In particular, everyone welcomes and looks forward to the resumption of state-led smuggling, because if it takes off, market traders can make a little more money with more imports in circulation.”
“Local livelihoods take a massive hit when state smuggling stops,” the source said. “Whenever something happens in this country, the authorities always restrict or stop state-led smuggling, which is tied to people’s livelihoods. So people’s lives will inevitably become more difficult as time goes on.”
Daily NK works with a network of sources in North Korea, China, and elsewhere. For security reasons, their identities remain anonymous.
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