Chinese business soars in North Korea

Scott Tong Oct 7, 2009

Chinese business soars in North Korea

Scott Tong Oct 7, 2009


Steve Chiotakis: In Pyongyang today, Chinese Premier Wen Jiabao ended a high-profile visit. He met with Kim Jong-il and signed a few trade deals.
For China, the relationship is more than just geopolitics. There’s money to be made. Marketplace’s Scott Tong reports from the key border city of Dandong, the main gateway between China and the North.

Scott Tong: Just about every morning, dozens of semi trucks load up with goods going across the Yalu River into North Korea.

Chinese truck driver Yuan Keyou.

Yuan Keyou: We carry sheets of steel, pipes, everyday household items. And food, like flour and fruit — they don’t have any apples there.

China provides some 80 percent of North Korea’s consumer goods, items not banned under U.N. sanctions. But in a nearby warehouse, one item looks awfully out of place: a treadmill. North Korea’s emerging consumer class wants to stay trim, as well as gab on cellphones and gamble in casinos. Word is there’s decent pepperoni pizza in Pyongyang.

Selig Harrison of the Center for International Policy in Washington has gone in 11 times.

Selig Harrison: We have the impression of North Korea as a starving place ready to fall apart economically. But actually, the place is economically very much alive, as far as the cities and big towns are concerned.

That may be why single-malt scotch sells well at the duty-free shop on the border.

Chinese saleswoman Wang Yi Lin shows off a leather wallet, handy for North Korean traders with thick wads of cash.

Wang Yi Lin: And here this bag is Benetton, from Italy. They also like Dunhill, it’s world famous. Don’t even try to give them knockoffs, they know when the logo is fake.

As luxury goods move into North Korea, so does Chinese investment — in mines to extract iron ore, and factories to take advantage of super low labor costs.

Exporter Yu Yang says opportunities abound, but doing business with North Koreans can be rough.

Yu Yang: Their country is also very corrupt. Worse than China. Sometimes we send things over by rail. But they don’t send the empty rail cars back.

Two things you don’t hear much about in this city: U.N. sanctions and nuclear bombs. For all the drama over missile testing, traders say here, commerce is king. Last year, China’s trade with North Korea hit a record $2.8 billion. Even as the rest of the world was isolating Pyongyang.

Yesterday, Chinese and North Korean leaders pledged to build a bigger bridge here, across the Yalu River. So more trucks can take more stuff back and forth.

In Dandong, northeastern China, I’m Scott Tong for Marketplace.

Staff researcher Cecilia Chen contributed to this report.

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