North Korea trade sanctions bite on borders with China and Russia
2017-11-16 11:26:16
RASON, NORTH KOREA – At the northeastern tip of North Korea, where the isolated, nuclear-armed country meets its giant neighbors China and Russia, United Nations sanctions on the regime over its weapons programs are having an impact.
And with the North possibly facing further sanctions following its ICBM missile test on Wednesday, things are unlikely to get any easier for traders involved with the remote region’s Rason Special Economic Zone (SEZ).
Rason is one of Pyongyang’s showpiece development projects, looking to exploit its geographical location between the borders with China and Russia, and the Pacific Ocean.
Formally established in 1991, it was the first of its kind in the country and has only come up to speed in recent years, but officials are defiant about the setbacks.
Foreign firms are given tax, visa and legal concessions — they can set up wholly-owned units, rather than joint ventures — to lure them to the SEZ as leader Kim Jong Un seeks to pursue a policy of “byungin” (“simultaneous development”) of both the economy and atomic arms.
But eight sets of U.N. Security Council sanctions have been imposed on Pyongyang over its nuclear weapons and ballistic missile programs.
North Korean coal exports have been banned, leaving the material piling up on quays in Rason, as have iron ore and seafood.
The most recent resolution — passed in September after Pyongyang detonated by far its most powerful nuclear device to date — forbade trading in textiles and imposed limits on oil supplies to it.
“There is some impact,” said Han Yue, deputy manager of the Chinese-owned Rason Songsin Building Materials cement plant.
“Many things can’t be imported from China anymore because of the U.N. sanctions, in terms of the transfer of funds from both sides you could say it has been cut off.”
Beijing — Pyongyang’s sole major ally — has long been accused of failing to enforce U.N. resolutions against its wayward neighbor, with U.S. President Donald Trump constantly demanding it do more.
But Han — age 43, who comes from Singtai in Hebei province, next to Beijing — said China’s actions had slowed development and construction in Rason.
“This is affecting our sales,” he said, with parts imports another problem. “Because of the economic sanctions, so far this year we have only completed 70 percent of the output of last year.”
And with the North possibly facing further sanctions following its ICBM missile test on Wednesday, things are unlikely to get any easier for traders involved with the remote region’s Rason Special Economic Zone (SEZ).
Rason is one of Pyongyang’s showpiece development projects, looking to exploit its geographical location between the borders with China and Russia, and the Pacific Ocean.
Formally established in 1991, it was the first of its kind in the country and has only come up to speed in recent years, but officials are defiant about the setbacks.
Foreign firms are given tax, visa and legal concessions — they can set up wholly-owned units, rather than joint ventures — to lure them to the SEZ as leader Kim Jong Un seeks to pursue a policy of “byungin” (“simultaneous development”) of both the economy and atomic arms.
But eight sets of U.N. Security Council sanctions have been imposed on Pyongyang over its nuclear weapons and ballistic missile programs.
North Korean coal exports have been banned, leaving the material piling up on quays in Rason, as have iron ore and seafood.
The most recent resolution — passed in September after Pyongyang detonated by far its most powerful nuclear device to date — forbade trading in textiles and imposed limits on oil supplies to it.
“There is some impact,” said Han Yue, deputy manager of the Chinese-owned Rason Songsin Building Materials cement plant.
“Many things can’t be imported from China anymore because of the U.N. sanctions, in terms of the transfer of funds from both sides you could say it has been cut off.”
Beijing — Pyongyang’s sole major ally — has long been accused of failing to enforce U.N. resolutions against its wayward neighbor, with U.S. President Donald Trump constantly demanding it do more.
But Han — age 43, who comes from Singtai in Hebei province, next to Beijing — said China’s actions had slowed development and construction in Rason.
“This is affecting our sales,” he said, with parts imports another problem. “Because of the economic sanctions, so far this year we have only completed 70 percent of the output of last year.”
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