It’s 9.30am on a Tuesday morning and container trucks with North Korean number plates are lined up outside the customs checkpoint at the Chinese end of the 73-year-old Yalu River Bridge in this town of Dandong.
A North Korean driver jumps from his cab and passes some paperwork to a Chinese official. As he gets back into the cab, Chinese customs inspectors put a small lock on the container’s doors. In a few minutes, his truck is on its way across the border.
This part of the border between North Korea and China is a hive of activity, though local traders say traffic is down since China banned some imports from North Korea in April following Pyongyang’s fourth nuclear test in January.
But that hasn’t stopped China from supplying its old ally with sensitive items, as official Chinese figures show. In the first half of this year, one particular line of products – the 824 items classified by an international customs convention as Category 84, which include nuclear reactors and equipment that can be used in reactors – replaced textiles as the second-biggest export category. Plastics and polypropylene, which experts say could have military applications, now rank fifth.
China was among the global powers that put the screws on North Korea over its nuclear weapons programme by way of tougher UN sanctions in March that restricted trade with the hermit kingdom. Beijing announced in April that it would ban most imports of North Korean coal, iron ore, gold, titanium, vanadium and rare earths, the country’s main exports. These are the toughest sanctions China has ever imposed on North Korea, an ally once described by Mao Zedong (毛澤東) as being “as close as lips and teeth”.
But Beijing insists that some imports for civilian use should be exempted, including items intended for “the people’s well-being” and those not connected to North Korea’s nuclear or missile programmes. China’s top five exports to North Korea last year were soybean oil, textiles, telephones, apples and trucks. Then Category 84 items mysteriously shot up the charts.
China still accounts for about 90 per cent of North Korea’s trade, and more than half of that business is believed to travel through Dandong (丹東), a city of 2.5 million people in Liaoning (遼寧) province that is separated from the neighbouring North Korean city of Sinujiu by just over a kilometre of river.
Signboards, written in both Chinese and Korean, for trading and transport companies handling everything from coal and steel to cars and tyres are seen everywhere in Dandong, along with small shops selling North Korean products. Travel agencies offer tours to the world’s most isolated country at prices ranging from 70 yuan (HK$81) to 4,000 yuan.
North Korean restaurants, mostly jointly managed by Chinese companies and the North Korean government, are popular among tourists and locals who are treating friends and business partners.
One of the most popular is Liu Jing Restaurant, where waitresses from the North, all in pony-tails, light make-up and red one-piece dresses, welcome guests and deliver dishes.
Liu Jing, or Ryugyong in Korean, is an old name for Pyongyang. Every night starting at 6.30pm, six of the waitresses dress up for a half-hour performance of song and dance, which “is quite professional and loved by elite tourists”, according to Zhang Xiaoxu, a tour guide from Liaoning’s capital of Shenyang (瀋陽) who is leading a group from Taiwan.
During the day, North Korean men gather on the street near the bridge. At dusk, dozens of container trucks line up on the street outside the Dandong customs headquarters, waiting to return to North Korea, as vendors peddle smuggled North Korean cigarettes to tourists under the bridge.
“The trucks wait outside every night to go back to the North, because there’s not enough parking space inside the customs compound,” a grocer said. “There were many more before.”
The line of trucks tells the tale of the complex relationship between China and North Korea. China has to keep engaging its troublesome neighbour even as it has to side with the rest of the world to punish it for its errant ways. It has to keep drip-feeding its neighbour to stave off anarchy on its borders even though it’s part of the international community that wants to starve it into submission. North Korea’s utility for China as an important card against American influence only complicates the relationship further.
Despite the figures, a Chinese trader in Dandong, who requested anonymity, said his business had indeed slowed in the past two years, especially in recent months after China joined the UN sanctions. “It’s about a third less than before,” he said. “In the old days, Chinese inspectors usually turned a blind eye to the exports, but now it’s getting quite strict. Even when they want to buy, many products are banned by customs and we can hardly help.”
While the Chinese government claims it no longer exports oil to North Korea, a South Korean reporter discovered a pipeline facility located in the outskirts of Dandong and witnessed crude oil being loaded into the pipeline for transport across the border, according to a Korea JoongAng Daily report in May.
The report said the crude oil came from the Daqing oilfield, the biggest in China, and was transported there by train and would be piped to a storage facility in Baekma, near Sinuiju in North Pyongan province. From there, the oil would be distributed to state agencies, military bases and transport-related factories. The oil pipeline is just one of the anomalies in China’s supposed trade restrictions on its old friend.
The New York Times in March reported that China did not inspect all cargo entering or leaving North Korea for banned goods.
But what is certain, from China’s customs figures, is that exports of construction materials, such as steel, have surged after sanctions. Steel exports are up 30 per cent in the first quarter and 117 per cent in the second quarter year on year.
“It seems they are building more roads and bridges in the North,” the trader said.
Despite the sanctions, North Korea’s exports to China actually picked up in August, according to Daily NK, a South Korean website that claims to have a network of informants in North Korea. It said thousands of tonnes of iron ore were transported to China every day, even though the Chinese government banned such imports in April.
Citing a source in Dandong, it said more than a thousand 20-tonne trucks delivered various goods and equipment to Sinuiju, an almost tenfold increase.
“No matter what, China and North Korea are closely linked by the long, shared border,” said Lee Kyu-tae, an economic and geopolitical expert from South Korea’s Catholic Kwandong University. “And smugglers from both countries do whatever they can to transport anything North Korea wants, and those cannot be found in the customs’ statistics.”
As the North’s most important ally and its biggest trading partner, China has been trying to deepen bilateral economic ties over the past decade as part of an effort to consolidate its influence with the hope of dragging Pyongyang back to the table of six-party talks, but the strategy hasn’t worked so far.
In a high-profile project, North Korea in 2010 signed away 3,000 acres of land adjacent to suburban Dandong to China for the next 50 years under an agreement between Kim Jong-il, the father of Kim Jong-un, and former Chinese president Hu Jintao ( 胡錦濤 ), aiming to draw investment from China.
But the Hwanggumpyong special economic zone remains a placid farmland with barbed-wire fences. A new 3km bridge that was supposed to be a key link for trade and travel between Dandong and North Korea has been suspended despite Beijing splashing out an estimated 2.2 billion yuan on its construction. The Chinese government hasn’t revealed the reason for the delay but it is widely believed that the North called off the project, which had been set to open in 2014.
The local government had put great financial support into promoting the new bridge. The bridge is in an area called the Dandong New Zone and is near to a a grand new customs building and dozens of new residential compounds. But nobody knows when it will open.
“Most people bought these apartments because of the coming bridge. Now that it has been suspended, most apartments have been left empty,” said a staff member of a renovation company in the area.
Concerns have risen that China might partially lift sanctions on Pyongyang after South Korea decided to allow the deployment of a powerful American anti-missile system on its soil.
Seoul and Washington have said the Terminal High Altitude Area Defence (THAAD) system was being deployed to defend South Korea from increasing threats from Pyongyang and was not targeting the Chinese military, but China doesn’t see it that way.
Hwang Hae-ho, a Northeast Asian regional security affairs expert at Hankuk University of Foreign Studies in Seoul, said exemptions to sanctions might be behind the surge in trade between the two countries.
“But the exemptions, aiming to provide humanitarian support to the impoverished and isolated country, have helped the Kim regime to last,” Hwang said. “As THAAD put a wedge between South Korea from China, a Kim Jong-un card is still useful to Chinese President Xi [Jinping] ( 習近平 ), although he is obviously not happy with him. China can get closer to North Korea again to strengthen its diplomatic sway in the region.
“China wants to see a competition between the North and South Korea to win Beijing’s heart. And that’s why Beijing offered candies to Kim when [South Korean President] Park Geun-hye agreed with the US on THAAD.”
The sanctions have hardly curbed North Korea’s belligerence, with Kim hailing last month’s launch of a ballistic missile from a submarine off its eastern coast as its “greatest success”.
Liu Ming, director of the Korean Peninsula Research Centre at the Shanghai Academy of Social Sciences, said China would abide by the UN sanctions, especially on jet fuel and other oil products used to make rocket fuel, although it would loosen its stance when it came to products used for “the people’s well-being”.
“Beijing will never abandon North Korea and its regime, and this is well understood by the North,” Liu said. “The North knows that China would eventually have to offer supplies if it doesn’t want a collapsed North Korean regime.”
Article source: http://www.scmp.com/week-asia/article/2013134/sanctions-what-sanctions-china-north-korea-and-dandong-deals