Fortunately for Hoeryong, and the residents of other dusty towns that dot the Sino-Korean border, Chinese traders are willing to come calling. While the country still relies on foreign aid, and more high-profile economic ventures with South Korea have stalled, the quiet trade along these northerly outposts points toward a way out for the North Korean economy. “Chinese people are in the best position to know what a poor communist country is like. And they know very well how to make money in such an environment,” says a Chinese woman who used to work with a North Korean industrial group.
Trade between the communist neighbors reached $740 million in 2001, according to the South Korean trade-promotion body KOTRA. Even better news for these border regions is the fact that areas like Changbai, China, had a 74 percent leap in trade in the first 11 months of 2002. Of course, these figures don’t take into account the illegal cross-border trade, which is rampant. Between 1998 and 2000, Chinese officials seized more than 4,000 smuggled automobiles, most of which made their way from Japan–via North Korea–to the Chinese northeast. But the recent completion of a massive Customs house in Tumen suggests the Chinese expect trade volumes to continue to rise: with customs rules reportedly relaxing, there are many more deals being inked between North Korean business delegations and the 1.1 million ethnic Koreans who reside on the Chinese side. “A few years ago people would go [to North Korea] to visit family and bring them food, clothes or money,” says a woman who runs a Tumen souvenir shop. “Now ’they go there to do business.”
The upward tick in trade numbers will likely flatten, however, if the North doesn’t start pulling its weight–and paying its bills. The North’s lack of tangible goods–besides quality seafood–and hard currency may put a ceiling on future trade. Chinese traders have cut their neighbors a lot of slack in the past, but they now refuse to accept anything but U.S. dollars for their goods, says a former Chinese Customs official. “The most important thing now is for North Korea to get the ability to look after itself,” says Piao Jianyi, North Korea specialist at the Institute of Asia-Pacific Studies in Beijing.
That hasn’t been Pyongyang’s strong suit. In 1991, with the United Nations’ support, North Korea launched the $30 billion Tumen River Area Development Project, its first capitalist venture. Touted as the “Rotterdam of Northeast Asia,” it was designed to open up new trade routes to the Chinese and Russian hinterlands. Seven years later the project was abandoned. Pyongyang’s announcement of the Sinuiju Special Administrative Region in September–a plan modeled on China’s special economic zones–died an even quicker death. Several weeks after the plan was unveiled, Yang Bin–the Dutch-Chinese businessman appointed to head the economic region–was jailed in China on tax-evasion charges and North Korea shelved the project indefinitely.
Still, back in Hoeryong, the people are full of hope. “We’ve been working hard to develop the city faster in anticipation of the Dear Leader’s arrival,” says the resident. “Hoeryong will be one of the first places to open up to China and the rest of the world.” But when that day comes is up to Pyongyang, not the people of this border town.
