Trading companies in North Korea are attempting to restart trade with China to secure construction materials as Pyongyang prepares to invest heavily in its tourism industry, sources in China told RFA.
National tourism projects were prioritized as a key part of the new five-year economic plan laid out during the Jan. 5-12 Korean Workers' Party’s eighth party congress—triggering expectations that a building boom in areas close to the Chinese border could start soon if North Korea can find a way to import materials.
Pyongyang and Beijing in Jan. 2020 shut down their border and suspended all trade due to the coronavirus. RFA has reported that authorities instructed factories and enterprises to wean themselves off of imports to heed North Korean leader Kim Jong Un’s call for the country to be more self-reliant.
But this apparently does not apply to the construction industry—Chinese citizens with business contacts across the Yalu River border told RFA’s Korean Service that North Korean officials are desperate to get their hands on building materials.
“As soon as the Korean Workers’ Party Congress was over, North Korean trade officials kept contacting me,” a Chinese citizen exporter of Korean descent from the city of Hunchun, across the border from North Korea’s northeastern panhandle, told RFA.
“They need to import raw materials, so they want to slowly restore the Sino-Korean trade system, which was suspended due to the coronavirus,” said the source, who requested anonymity for security reasons.
“According to my North Korean counterpart, North Korea’s large-scale national construction projects and special tourism zone development are attracting attention again after the congress. So it seems like the officials of the powerful state-run trading companies are trying to secure large quantities of raw materials in advance, doesn’t it?” the source said.
The North Korean trade officials told the source that the country’s national projects all lack building materials and cannot be completed without imports.
“They said the framing of several apartment buildings has already been completed, but they cannot finish the interiors because they need things like doors, window frames, bathtubs and toilets. They said they urgently need these finishing materials for construction,” the source said.
“I was a finishing materials exporter for several apartment construction projects in Pyongyang and the Samjiyon tourist zone in Ryanggang province, but over the past year I haven’t been able to export anything into North Korea because of the coronavirus,” said the source.
The Samjiyon tourist zone is a highly touted national project that opened in Dec. 2019, just prior to the border closure. The site is meant to attract visitors from China to earn foreign currency. It opened to much fanfare, with Pyongyang showcasing the resort complex’ ski slopes, hotels and spas, and dubbing the project an “ideal socialist village.”
The project took several years to complete, but North Korea has yet to reap the benefits because the border closed a month after it opened.
Seoul-based NK News conservatively estimated in October 2019 that country would welcome its highest number of Chinese tourists in any year ever at about 350,000, and they would collectively spend about U.S. $175 million.
The online media outlets noted that tourism from China had “exploded” in the 18 months prior, indicating that tourism would be a major source of revenue moving forward.
North Korea is now under more pressure to complete national construction projects to prepare to earn back money lost in the year without tourism.
“National construction projects are the most important part of the five-year economic plan decided by the congress, so the trade officials are scrambling for raw materials for construction. It’s difficult to know whether this means the border will totally reopen soon, or whether they will temporarily allow imports of urgent quantities of raw materials,” said the source.
Another Chinese citizen of Korean descent from Dandong, across the border from North Korea’s northwestern city of Sinuiju, confirmed to RFA that Chinese construction materials are in high demand.
“A North Korean trade official called several times asking to import construction materials from Dandong. They say that Sinuiju is now a tourism development zone and they are urgently building tourist facilities there now,” the second source said.
“Traders have been out of touch with their North Korean counterparts for months. The sudden inquiry about construction materials, often in large quantities in advance, show there is an urgent need there,” the second source said.
Finishing materials for building interiors are in the highest demand, and North Korea will allow imports by sea of such as doors, window frames, bathtubs, toilets, and tiles starting next month, according to the second source.
“Even at the worst of the coronavirus crisis last year, North Korean authorities sometimes imported essential goods by sea. Given that the trade officials are trying to import construction materials this way, it seems that they are speaking with more than just empty words.”
Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Eugene Whong.