With new trade zone, hope springs eternal for dealings with South

A new Sino-North Korea customs-free trade zone opened successfully on the 15th in Dandong, forging a path for tariff-free trade between North Korea and their biggest
trading partner by allowing goods to pass through
customs at Guomeon Harbor without extra fees. Accordingly, North Korean traders hosted the 4th North Korea-China Economic and Cultural Trade Fair from the 15-18 to coincide with the opening of the new trade zone and boost public interest.

On the 15th, a source with ties to North
Korea currently residing in Dandong, China spoke on the phone with Daily NK, noting that North Korean attendees of the economic fair stored their goods to be displayed in warehouses in the free trade zone in
anticipation of the event, eager to have their products on display in the hopes of
stimulating interest in their wares and blazing the trail for new trade.

Daily NK crosschecked this news with an additional source in Dandong.

This keeps in line with traders’ efforts last year but with significant augmentations, according to the source, who asserted that this year the North Korean trading companies have seen the results of
advertising and are hoping to become trailblazing export outlets for their

“This year, not only China, but also
Russia, Hong Kong, and others are slated to attend the fair. The North Korean trading companies are very
excited about the opportunities posed for them if they advertise successfully,”she said.

“In addition, the State Security Department is not scheduled to observe this event, so North Koreans pledged to
take advantage of the opportunity to open up their market to the fullest extent
while not under the watchful eye of the authorities.”

Although it was the Chinese government that
gave the go-ahead and took the initiative to host this fair, it was the
North Koreans, beset by a chronic shortage of foreign currency, who took the
most active role in preparing for the event. North Korean specialty products,
including pharmaceuticals and especially medicinal alcohols such as “Hogolju”
(Tiger Liquor), were set to be the central focus of this year’s event, according to the source.

Our source is confident that because this
year’s trade event was held in conjunction with the opening of the free-trade
zone, it would be very successful in stimulating trade activity between China
and North Korea. “Unlike last year, taxes and customs aren’t required when
trading. The only requirement is a free-trade zone license; companies can trade up to 8,000 RMB per day (approximately 14,000,000 KRW),” she said, adding
that news of this spread quickly and led to a great deal of excitement in the run up to the opening.

Because cadres across the board are currently
desperate to earn foreign currency, the authorities have been covertly
encouraging private South Korean companies to take advantage of the opportunity
presented by the new free trade zone. As a result, North Korean trading
companies anticipate that this free trade zone will eventually offer the
opportunity to trade not only with China, but even with their brethren south of the 38th parallel. 

In fact, following the meeting between Chinese
Politburo standing committee member Liu Yunshan and Kim Jong Un at the 70th
Anniversary of the Workers’ Party, North Korean traders have begun to see the
present as an opportunity for increased trade activity between North Korea and

The source echoed these sentiments, predicting that “the free trade zone would act as a catalyst
to galvanize trade activity between the two countries.”

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