After the surprising participation of North Korean representatives in Beijing and Xi Jinping’s “One Belt, One Road” conference this past weekend, we need to ask ourselves what the chances are that North Korea will actually end up as an explicit participant in the project.
As Christopher Green and I recently argued in an academic paper, those chances are slender indeed: North Korea has been keeping Chinese investment and infrastructure at arms’ length since it accepted a major influx in bilateral economic cooperation in 2009. But things can always change.
In order to grasp the possibility of North Korea being looped more firmly into Beijing’s new framework, analysts, therefore, might do better to avert their eyes from the spectacle in Beijing and looking instead to the Chinese-North Korean border region.
HUNCHUN: A BOOM TOWN?
The Chinese city of Hunchun is a perfect laboratory for exploring just what confronts North Korean economic planners as they look at the changing landscape of possible partners across the Tumen River.
To a certain extent, this landscape and the problems of bilateral economic cooperation in the Dandong-Sinuiju corridor are more well known, and certainly better watched by outside reporters and analysts. There is, after all, nothing like a bridge to focus one’s attention.
But while Dandong is the traditional port of call for North Korean traders and a point of Sino-North Korean economic exchange, Hunchun, the boom town on the far eastern edge of China and the PRC’s Yanbian Korean Autonomous Prefecture, is more of a “wild card” for North Korea, because the landscape has changed more quickly, forcing adaptation.
In the five years since it was established, Hunchun’s own economic development has attracted nearly $12 billion (USD) in outside investment, and now expects about $3.5 billion in outside investment annually. (Figures are from Yanbian Daily of 5 May 2017).
The Chinese city of Hunchun is a perfect laboratory for exploring just what confronts North Korean economic planners
In 2016, it hit new highs for import-export numbers, visitor numbers, and investment. As such, it now outpaces Yanji, the traditional population and economic center of the Korean Autonomous Prefecture, and is attracting more outside workers.
Although apartment construction is moving at a feverish pace on the west side of Yanji reaching toward the new train station, Hunchun certainly has more of a “Wild West” feeling about it.
Once-rural Hunchun has expanded its population, its infrastructure, and its economic outputs and foreign linkages drastically since establishing a framework for these actions five years ago.
If there is a regional counterpart to the famous example of Shenzhen in southern Guangdong province, Hunchun is it.
Hunchun is also the terminus of the high-speed rail line. If North Korea is to ever connect to China’s mighty system of 21st-century transport beyond opening up into Sinuiju, this is the node.
To imagine this possibility is not done to validate about our presumptions of North Korean awe at China’s capability and brawn: like regular North American travelers scarred by years of Amtrak delays, North Koreans are more than capable of adjusting their norms and taking full advantage of Chinese timetables.
More tangibly, a North Korean businessperson or diplomat who needs to get to the DPRK Consulate General in Shenyang (the bureaucratic node which must approve any North Korean business venture in the northeast of China) or the famous Chilbosan Hotel can do so within about five hours from Hunchun.
China is currently sounding out Russian officials about extending the rail line to Vladivostok under the “One Belt, One Road” framework. Accordingly, for the two year period from 2016-2018, the central government in Beijing slated 2 billion RMB (approximately $290 million) for infrastructural improvements in eastern Jilin as part of the ongoing “Greater Tumen Initiative” which is meant to spark more trade with North Korea and Russia.
Trade at the Quanhe border post (on the way to Rason) seems to be proceeding without a hitch, and North Korea has upgraded its customs facilities on the other side of a renovated bridge.
NORTH KOREAN WORKERS
When it comes to North Korean guest workers, Dandong has received more critical attention – but, again, Hunchun is potentially just as significant.
In his recent reportage from the border region, Toronto Globe and Mail reporter Nathan VanderKlippe tried to assess if North Korean workers in border cities like Hunchun were about to disappear into what appeared to be a widening bilateral fissure between Beijing and Pyongyang.
Put another way, was China using the thousands of North Korean laborers in Chinese factories as leverage against Kim Jong Un, foreshadowing the possibility of forfeiting the revenues they were sending home to the Kims? Certainly, such an activity would have scored yet more points with the Trump administration and the U.S. Congress.
Enterprises employing North Korean workers were numerous in the various corners of the city’s expanding industrial park
VanderKlippe was unable to get into the relevant factories, but a point made in his interview with Renmin University scholar and reliably interesting Chinese academic Cheng Xiaohe was particularly salient:
“[T]here are signs that China has already begun quietly experimenting with new measures of its own. Take, for instance, those North Korean workers who were invited into China in recent years, provided visas, and allowed to labour as a source of foreign currency for Pyongyang. Some of the Chinese companies in northeast China have stopped hiring DPRK labor,” says Prof. Cheng.
Cheng is a reliable interlocutor on such issues, but do note, however, the distinction here. “Some companies” in China are said to have “stopped hiring” North Koreans – a rather different proposition from terminating existing contracts and expelling North Korean workers early. Even the more unhinged elements of the Chinese state news media have not threatened as much.
VIEW ON THE GROUND
I spent a day in Hunchun in mid-April, driving around the economic development zone with the Koreanist Steven Denney and a well-connected local.
Enterprises employing North Korean workers were numerous in various corners of the city’s expanding industrial park.
Since the seafood industry in Hunchun is boasting big gains by “processing the natural abundance of Russian and North Korean seafood” before shipping it on to markets in Japan, South Korea, the U.S. and the European Union, some North Koreans labor may be involved, beyond the acknowledged supply element. Seafood firms in Hunchun’s economic development zone tend to tout their ties to North Korea.
Firms in the minerals industry, however, are less forthcoming about ties to DPRK. The Jinshan (Kumgang) Mining Company does not appear to disclose any work it is doing with or in North Korea, but 2016 statistics for Jilin province note the company had a capacity for producing or processing 420,000 tons of coal last year, making it a relatively small operation.
I was told that minerals firms in Hunchun had largely turned their attention to Russia, a pragmatic and obvious decision after the February coal ban; customs data released two weeks after I left Hunchun gave far greater detail.
Seafood firms in Hunchun’s economic development zone tend to tout their ties to North Korea
In terms of specific firms which employ North Korean workers, the evidence on the street is also less than perfect.
I was assured that Dongyao Kilns was housing North Korean workers, but apart from the factory’s location directly across the street from the local Public Security Bureau and with limited opportunity and incentive during a major anti-spy campaign to barge unannounced into buildings, there was little way to confirm it.
IN PLAIN SIGHT
Hongchao Clothing (宏超制衣) was a more obvious employer of North Korean female workers; a cook and a well-dressed female member of the Korean Workers’ Party standing just outside the factory gate indicated as much.
A February 2015 article from the website of the Yanbian Fire Department indicates that there are about 300 North Korean women working in the factory – and that, at that time, there was a total of 3000 North Korean workers in Hunchun, working for 13 different firms.
Other clothing firms employing North Korean workers in Hunchun include Fenghua Clothing (风华制衣), a firm which has been around since 1989 and which runs a factory of 500 total workers in Hunchun (not all of whom are necessarily North Korean), as well as Hongfeng Clothing (弘丰制衣).
Hongfeng is a smaller enterprise with about 180 people in Hunchun; recently announcing they were hiring female Chinese workers at Chinese wages (i.e., not cheaper North Koreans) for their operations in Dalian as well as in Yanji.
Since 1997, Fenghua has run a factory in Rason of 400 workers; its main export target markets are Hong Kong, Japan, and South Korea.
Accordingly, Fenghua helped to organize a week-long textiles-focused business trip spanning from Dalian to Hunchun and Rason, which appears to have gone ahead in late September 2016 in spite of North Korea’s nuclear test earlier that month.
DPRK workers continue to ply their trades in Hunchun
In line with the forward-looking emphasis of Hunchun enterprises, one North Korean restaurant in Hunchun has taken up a new slice of the business pie in the city, offering cut rates to host wedding parties for Han Chinese.
In undertaking this step, it was imitating practices pioneered at the Shenyang Chilbosan Hotel, probably the most famous Sino-North Korean joint venture. But that is a story for another time.
In sum, North Korea’s engagement with Hunchun is limited but ongoing – a status which has not been changed with the announcement of the evolving “One Belt, One Road” framework in Beijing, or the North Korean participation in the related conference last weekend.
DPRK workers continue to ply their trades in Hunchun. The DPRK has opportunities to expand their own Special Economic Zone across the border from Hunchun, where two large islands are split territorially with China, but the far more likely course of events is for Rason to remain North Korea’s primary site of economic experimentation in the northeast, and for North Korean workers to continue looking to Hunchun as a site of opportunity, if not utter acceleration and connectivity.
Adam Cathcart’s research was supported by the Academy of Korean Studies Grant (AKS-2015-R-49)
Edited by Oliver Hotham
Featured image: Adam Cathcart
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