[imText1]The “Chinese wind” is blowing in the North Korean civil economy. According to the North Korean defectors whom we met recently, 90% of the goods traded in the market are Chinese products, and the Chinese Koreans (Chinese descendents living in North Korea) have most of the wholesale rights in the markets. Furthermore, some of them even purchased state owned stores where they have ultimate “right to determine price.”
Chinese Took Over the Pyongynag Department Store 1
Park Hyoung Su, a North Korean who works at the Communication Management Office who visited China on his business trip, said, “The actual owner of the Pyongyang Department Store 1 is Mr. Wang, who pays 30% of his profit to the as the rental and wage of the salespeople.”
“From the toothpicks to electric appliances, over 90% of all the manufactured goods circulated in North Korea are Chinese made. Since the state owned enterprises or factories are not working anymore, there is no state business in North Korea. Business Management Department or whole sale stores are also out of business,” added Park.
With sarcasm, North Korean people say among themselves, “Jiang Zemin fed us during the march of tribulation, now the Chinese are feeding us.”
People say Chinese people keep bags of North Korean bills at their homes. There was also a rumor when 100won bill was the highest bill in North Korea, Chinese people weighed the bills instead of counting them. Now that 10,000 won bills and 5,000 won bills are out it is worth to count the bills.
Dandong is the Foothold of the Chinese People
Vehicles full of Chinese goods crossing the “China-Korea Friendship Bridge” that connects Dandong city of China and Sinuiju of North Korea are often seen these days. Mr. Jang Tawei who works at the Chinese customs office says, “Such vehicles are not aids from China but are actually of our businessmen taking goods into North Korea. In some cases as many as 20 to 30 trucks of 7 tons go in at the same time.”
The DailyNK met Hwang Chunmei, a Chinese businessperson who was leading the trust into North Korea on the “China-Korea Friendship Bridge.”
Hwang is a Chinese born immigrant to North Korea, who escaped to North Korea with his mother at the age of eight after his father was beat up death by the Red Guards during the Cultural Revolution. His father was a Chinese and his mother a North Korean origin. He used to live in Sunchun of South Pyongan province but moved to Yongchun about ten years ago.
Bribes to North Korean Officials a Requisite
“If you would like to start a business in North Korea, you must obtain government permission. I have friendly relationship with the people at the foriegn affairs section of the North Pyongan Provincial Security Department. I only carry the transgression permit but as long as I have it stamped by the Security Department, I have no difficulties crossing the border. If you are friends with the people at the Security Department you can easily have the transgression pass issued, if you have friend at the Safety Department, they will catch thieves for you, and if you are friends with the people at the party organizations, it is quite easy to start a business.”
Hwang says businessmen such as her generously “invest” to the North Korean officials.
“The people at the Security Department like liquor, cigarettes, and clothes the most. Especially in North Korea, there are many thieves and robbers. They come out as soon as I give them a phone call. When some people take my goods and refuse to pay me, they come with me to ask for money. I do not forget to compensate them every time.”
100,000 Pairs of Socks as Offering on Kim Jong Il’s Birthday
Hwang says he started to build good connection since the 1997. In order to earn favors of the Party organizations, he suggested to “distribute a pair of socks to all the households in Yongchun on the commander Kim Jong Il’s birthday.” His “love for the nation” was recognized by the Party Committee of Younchun district. Hwang went over to Dandung and brought back with him 100,000 pairs of naylon socks.
At the wholesale price of the time, he paid 50 Chinese Yuan (about 7,500 Korean won) per pair of socks. All together he spent more than 50,000 Yuan (about 7,500,000 won). The 100,000 pairs of socks prepared by Hwang was distributed to the people of Yongchun labeled as “Gifts from Commander Kim Jogn Il.”
Hwang owns a house in Yongchun as well as in Dandung. Youngchun house is her business foothold and the house in Dandung is her husband’s business foothold.
In Dandung there are number of wholesalers who regularly deliver goods to the Hwang couple. Hwang mostly buys a lot of “off-season products” or “low price goods” which does not sell in China anymore. Two years ago, she brought 5,000 pairs of working shoes which cost her 4Yuan per pair and sold them to the North Korean sellers 13 Yuan per pair. The pure profit she made was about 30,000-40,000 Yuan, about couple thousand US dollars.
“When I give a call telling them that I am coming in to Yongchun with goods, the sellers are already there waiting for me when I get there. I sometimes put goods in the storage but many times people buy them at the spot. We only deal with the large scale sellers who have cars and we do not do business with “bag sellers.”
Wholesalers “Drivers,” Retailers “Runners”
According to Hwang, there is a market in each city where it makes a good business. Such cities include Pyungsung and Sunchon in South Pyongan province, Sariwon in Hwanghe province, Sinuiju in North Pyongan province, and Nasun and Huiryeong in North Hamkyung province. There is also Chungjin in North Hamkyung province, a city known as “a place where all the Chosun’s supplies gather.”
The large scale retailers bring about one to three million North Korean won each time they come to buy goods and a car. They are called “Drivers.” They takes goods to the markets and there are other people who take the goods to each province. They are the small scale sellers who do their business carrying bags around, and are called, “runners.” According to Hwang, most of the Chinese businesspeople do business only with the Drivers.
After they sell all their stuff, the Chinese businesspeople exchange their North Korean won to USD or Chinese Yuan. With some money left, they buy agricultural and marine products such as sea slugs or mushrooms. In the late 1990s, they used to buy non-iron metals such as copper, metal scraps, or aluminum and sold them in China. During the food crisis, North Korean people used to take parts of the factory equipments and machineries and sold them.
”Nationally Prohibited Goods” are Untouchable for Chinese Koreans Too
Hwang was not always successful in her business. Five years ago, she was dispossessed of the three kilograms of gold she had on the train from Pyongyang to Sinuiju.
Upon her aboard she tried gold smuggling by putting three kilograms of gold powder into an empty beer can. As usual, the officials from the Inspection Office came on the train to inspect over the passengers’ baggage, but there was no official she had acquaintance with on that day. The official who picked up the beer can that was a lot heavier than other cans looked for its owner, but Hwang acted as she did not know anything.
Once revealed, not only do they dispossess her gold but she will never be able to have her transgression permission issued again. This is because gold is one of the “nationally controlled goods” managed by Kim Jong Il himself. Hwang said she lost 30,000 dollars at the spot. After that she does not even dream about “smuggling” again.