North Korea prepares to resume trade with China

SEOUL/DALIAN, China — North Korea is scrambling to resume land-based trade with China in hopes of a much-needed economic shot in the arm, having halted shipments from its northern neighbor well over a year ago to keep the coronavirus out.

The North is expanding a quarantine facility at a military airfield near the Chinese border, South Korean intelligence recently reported to National Assembly members. With large numbers of personnel deployed, North Korea aims to bring the facility online this month, the South Korean lawmakers were told. The facility is expected to be used to hold goods delivered by rail for a certain period.

“I heard that trade between China and North Korea could resume at the end of the month,” an executive at a trading company in the Chinese border city of Dandong told Nikkei, passing along information heard from a North Korean official based in the city.

A resumption “will likely be for the private sector, covering such goods as grains and pharmaceuticals,” the executive said.

Roughly 90% of North Korea’s trade is with China, and about 70% of that goes through Dandong. The discussion now is over shipments via the Sino-Korean Friendship Bridge connecting Dandong and Sinuiju in North Korea. Some maritime trade has already resumed.

But doubts have arisen, given the sharp rise in delta-variant-linked COVID-19 cases in China.

“I heard about a possible resumption, but I’m not sure if North Korea would actually allow it,” the president of another trading company said.

North Korea repeatedly considered resuming trade via land routes since April, only to decide against it each time, according to a diplomatic source. This is because leader Kim Jong Un, fearing that the virus could come in through China, has ordered strict measures to prevent infections.

The North Korean legislature in March adopted legislation spelling out steps to resume imports. But the opening of a quarantine facility was postponed after issues in sanitizing equipment were found at the airfield.

The North’s military was slammed for its handling of construction of the facility. The “great crisis in ensuring the security of the state and safety of the people” that Kim mentioned in late June is about this incident, according to South Korean intelligence’s analysis. Ri Pyong Chol, a top official in Pyongyang, is believed to have removed from the Politburo’s standing committee to take responsibility.

North Korea’s trade with China has been suspended for more than a year and a half. North Korea’s total foreign trade in goods, excluding that with South Korea, plunged 73.4% to $863 million in 2020, according to the South’s Korea Trade-Investment Promotion Agency. Recent action on trade with China reflects the North Korean leadership’s sense of urgency as heat waves and flooding add to the troubles from severe shortages of food and daily goods.

South Korean intelligence said excessive heat has killed livestock in the North since July. North Korea’s official Korean Central News Agency reports that a meeting was called last Thursday to discuss the damage from heavy rains in the east and that Kim ordered government reserves of materials to be sent to the area quickly.

The North Korean leadership is also moving on trade with second-largest partner Russia. The Russian ambassador to North Korea met with North Korea’s external economic affairs minister in Pyongyang last Tuesday, according to a Facebook post by the Russian Embassy in Pyongyang.

The two officials agreed to prepare for an accelerated resumption of trade, given the serious economic situation. Russian Ambassador Alexander Matsegora said his side is ready for this work.

Countries with embassies in Pyongyang have instructed diplomats to leave the country because of shortages of drugs and necessities.