Chinese authorities began prohibiting
mineral exports from North Korea on March 1st in a move not strictly related to
the passing of UN Security Council Resolution 2270, which outlines sanctions
against North Korea. North Korean authorities and foreign-earning currency enterprises tied to the military did not see this move coming
and expressed embarrassment and shock.
In a telephone conversation with the Daily
NK on March 4, a source from North Pyongan Province said, “Beginning on March
1, mineral exports such as coal and ore have not been allowed to pass through
Chinese customs into China. Trucks loaded with mineral deposits have been idly
waiting in front of Chinese customs near Dandong. The foreign trading companies
are simply waiting for instructions from the higher authorities.”
Two separate sources, also based in North
Pyongan Province, verified these claims.
earning companies began hearing rumors that mineral exports would be blocked
from entering China back in February, but they simply didn’t believe it. The
authorities did not make an official announcement or put forward a policy.
Instead, senior officials have simply remarked that it will be necessary to
stop exports of minerals for the time being,” the source continued.
“Some crafty business cadres raised the
possibility of using sea-routes to smuggle the product in with Chinese foreign
traders, but their Chinese counterparts rejected such proposals. Some North
Korean merchants have posited, “Maybe they’re playing hardball to get us to
lower prices to rock bottom?”
in United Nations sanctions after North Korea’s first, second, and third
nuclear tests, she explained, but there was no special impact on trade. North Korean cadres
expected that this time around would be no different and that the efficacy of
the sanctions would eventually fizzle and fade to nothing.
North Korean traders therefore expected no
significant difference as they sent mineral exports through the North Korean
border town of Sinuiju into the Chinese city of Dandong. They were in for a
surprise when the door was slammed shut. The regime has yet to come up with an
effective countermeasure or policy response, which cadres take as a sign that
the road will open up again in the near future, according to the source.
Across the board, there are expectations of “short-term export restrictions,” but some have voiced concerns that the
restrictions might become long term. If developments continue down this road,
the military foreign-currency earning enterprises and North Korean authorities
who have been making a handsome profit on mineral exports are going to be given
a significant blow.
“Coal and mineral exports have been an
important source of funding for the Korean Workers’ Party. Kim Jong Un needs
foreign currency to prepare for the upcoming 7th Party Congress and companies
need foreign currency in order to issue the bribes that guarantee their
survival. This turn of events comes as bad news to all of them. This might
force authorities to turn to other sources of funding in order to ready for the
7th Party Congress, including perhaps illicit methods such as the smuggling and
selling of illegal drugs,” she said.
“If the long-term export restrictions
bankrupt the mineral companies, many innocent workers will lose a source of
income. Merchants and residents connected to the export companies in various
ways will struggle to find new jobs. Kim Jong Un cannot discount the resentment
that this will cause.”
On March 2, the United Nations Security
Council unanimously adopted a resolution which enacts strong sanctions
requiring that all cargo exported from and imported to North Korea be
inspected. The resolution also bans the export of jet fuel, blocks the trade of
minerals, freezes financial assets, and restricts the trade of luxury items,