North Korea is conducting both imports and exports through state-sponsored smuggling operations in the Hyesan area of Ryanggang province. Local residents are increasingly optimistic that long-depressed markets in the region may recover.
According to a Daily NK source in Ryanggang province recently, North Korea has recently been exporting medicinal herbs, Lingzhi mushrooms, and dried leeches to China through Hyesan via state-controlled smuggling networks.
Before North Korea closed its borders due to COVID-19, private smugglers handled these items. Now, trading companies purchase these goods and export them to China through state-sanctioned smuggling channels.
As smuggling operations flourish, exporters increasingly conceal precious metals like gold in their shipments. “The state doesn’t officially authorize this practice—smugglers are doing it illegally in collusion with officials from powerful agencies to increase profits,” the source explained.
“With exports growing, both official and illegal, people are feeling optimistic,” the source said. “They believe that if trading gains momentum, markets might recover to their pre-COVID levels.”
As more people participate in smuggling activities, prices for export items like medicinal herbs have been rising steadily.
For instance, Lingzhi mushrooms previously traded for 200 to 300 Chinese yuan per kilogram before the export surge, but recently prices have climbed to between 500 and 1,200 yuan, depending on quality.
These price increases mean border region residents are earning more money, and if consumption gradually improves, market merchants’ incomes will benefit positively.
“If trade with China is limited to imports alone, its impact on people’s lives remains restricted,” the source noted. “However, when exports occur simultaneously as they are now, people’s incomes will rise substantially and markets will revitalize.”
Trade with China key to economic resurgence in border areas
In border cities like Hyesan, items imported through official customs channels and private smuggling circulated widely before COVID-19. After the border closure, market activity dramatically contracted when both legal trade and smuggling ceased.
People who depended on marketplace commerce struggled severely, but with state smuggling now operating at levels comparable to pre-pandemic private smuggling, the economy is showing signs of recovery.
“Border cities like Hyesan can only recover if trade with China gains momentum,” the source said. “When goods begin circulating again, the overall market atmosphere naturally improves, allowing people who earn their living through markets to breathe a little easier.”
“This year, people hope they can escape starvation,” the source added. “If trade with China continues at current levels, expectations for market recovery won’t be unfounded.”
