Chinese wig and false eyelash companies that outsource manufacturing to North Korea will have to look elsewhere after authorities declared that the country’s companies would not be accepting manufacturing orders because young student laborers had been deployed in other jobs, sources in China told RFA.
Wigs and eyelashes had been big business for Chinese and North Korean companies prior to the coronavirus pandemic. The Chinese companies could take advantage of North Korea’s cheap labor costs, and the North Korean workers making the wigs and eyelashes were paid much more than their peers in other industries.
But in January 2020, Beijing and Pyongyang closed the Sino-Korean border and suspended all trade to prevent the spread of the coronavirus. The move was disastrous to the North Korean economy, especially for those involved in the purchase and sale of imported Chinese goods.
Recent signs that the border could soon reopen prompted the Chinese wig and false eyelash companies to stockpile raw materials, only to be hit with the news that their North Korean business partners cannot accept toll manufacturing orders.
A Chinese citizen of Korean descent in Dandong, across the Yalu River border from North Korea’s Sinuiju, told RFA’s Korean Service that the announcement created difficulties for the Chinese wig and eyelash companies.
“Early last year, prior to the coronavirus crisis, North Korean trading companies were able to earn a lot of foreign currency by receiving toll manufacturing orders for various types of products from Chinese companies,” said the source.
“The state-run trade companies, local government companies and private factories competed to win Chinese orders, but North Korea suddenly decided not to sign new contracts for toll manufacturing for some items in the near future,” the source said.
Many of the Chinese companies have begun stockpiling raw materials in anticipation that the border will reopen soon, but now they have been left in the lurch, the source said.
“In particular, the manufacturers of wigs and false eyelashes… have purchased tons of raw materials to ensure that production progresses smoothly after more than a year on hiatus,” said the source.
“But when North Korea notified them that it would not manufacture wigs and eyelashes in the future, they are now staring at huge losses. The reason why North Korea is refusing to make wigs and eyelashes is because the young students who need training in how to make those products have been mobilized for other types of work,” the source said.
According to the source, the cross-border manufacturing arrangement is good not only for North Korean companies, but also for ordinary residents who can earn a lot of money doing piecework for Chinese companies.
“They jump into the industry, regardless of whether they are adults or children. Since wig manufacturing and eyelash processing require a young labor force with good eyesight and flexible hand movements, the companies will even hire young middle and elementary school students.”
Another source, also a Chinese citizen of Korean descent from Dandong, confirmed to RFA that Chinese wig and eyelash makers faced sourcing troubles now that North Korea is refusing to make their products.
“Because North Korea is in a severe economic crisis, all members of the family who can move must go out and work to make ends meet. Older adults with poor eyesight cannot adapt well to wig and false eyelash making, because it requires attention to detail. But the young students and teenagers can get paid more than 10 days’ worth of food for making just one wig,” the second source said.
According to the second source, the fact that North Korea has shifted young students away from this kind of work shows that North Korea’s situation is dire.
“To make sure that the young students don’t work in this industry, the North Korean authorities instructed companies not to take orders for wigs and false eyelashes even if trade resumes in the future. It will be difficult for the people to give up on these jobs because wig manufacturing is more profitable than other jobs,” said the second source.
“When the coronavirus emergency quarantine system is lifted and the ban on wigs and false eyelashes ends, North Korean companies will fight tooth and nail with each other to win toll manufacturing orders.”
According to the second source, wig manufacturing is very profitable. A 20-kilogram (44 pound) box of raw materials costs 7,000 yuan (about U.S. $1,100), but the finished products made from those materials can earn a profit of more than 30,000 yuan (about $4,600).
RFA reported last week that North Korea finished a new rail route designed to isolate freight to prevent the spread of coronavirus. Earlier this week a Chinese freight train crossed the Sino-Korean border for the first time since the beginning of the pandemic, and Chinese products started to reappear in Pyongyang grocery stores.
These developments point to the possibility that official trade between the two countries could resume soon.
Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Eugene Whong.