North Korea sanctions

As UN sanctions bite, North Korean workers leave Chinese border hub

Smuggling between the two countries becomes more difficult amid tighter customs checks and patrols by Chinese border police, traders say

PUBLISHED : Monday, 02 October, 2017, 7:55pm
UPDATED : Monday, 02 October, 2017, 8:09pm

North Korean workers have begun to leave the Chinese border city of Dandong, after the latest round of sanctions seeking to restrict Pyongyang’s ability to earn foreign currency income, local businesses and traders say.

Almost 100,000 overseas workers, based mostly in China and Russia, funnel some US$500 million in wages a year to help finance the North Korean regime, the US government says.

Dandong, a city of 800,000 along the Yalu River, which defines the border with North Korea, is home to many restaurants and hotels that hire North Korean waitresses and musicians. Their colourful song and dance performances are a tourist attraction.

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Thousands of workers, most of them women, are also employed by Chinese-owned garment and electronics factories in Dandong, with a significant share of their wages going straight to the North Korean state.

The Wing Cafe used to advertise its “beautiful North Korean” waitresses on its shopfront by the Yalu. The sign is now gone, and cafe staff said the waitresses had returned home in recent weeks after their visas expired.

“There have been changes in government policy,” the manager of another restaurant said. “It’s not convenient to say more.”

Videos circulating on Chinese social media appear to show hundreds of North Korean women waiting in line to clear immigration at Dandong’s border gate. A group of around 50 North Korean women were waiting to cross the border on Friday morning.

Four traders, who deal in goods ranging from iron ore and seafood to ginseng and alcohol, said the sanctions had all but crippled the usual trade.

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More stringent customs checks and patrols by Chinese border police had also made it harder to smuggle goods across the border, according to the traders.

“The impact has been huge. Dandong’s economy has always counted on border trade,” one Chinese trader said.

In response to Pyongyang’s sixth and biggest nuclear test last month, the United Nations Security Council passed a resolution on September 11 prohibiting the use of North Korean workers, strengthening an August 5 resolution that put a cap on the number of workers allowed overseas.

Successive rounds of UN trade sanctions have now banned 90 per cent of Pyongyang’s US$2.7 billion of publicly reported exports.

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The September 11 sanctions also ordered the closure of all joint business ventures with North Korea and added textiles to a list of banned exports, which already included coal, iron ore and seafood.

In a statement on Thursday, China’s Ministry of Commerce ordered the implementation of the new sanctions across the country within 120 days.

The sanctions allow workers to serve out existing contracts. Businesspeople in Dandong, through which most of trade between the two countries flows, said contracts could not be renewed and new visas were not being approved.

A Chinese supervisor at a factory making electronic wiring for cars said that while most of its 300 North Korean workers were on multiyear contracts expiring at different times, those who arrived in Dandong after August 5 had already been forced to leave. He did not say how many.

The sanctions have come as a rude jolt to Dandong businesses and traders who had long rolled with North Korea’s unpredictability but believed their neighbour’s economic reliance on China would keep its belligerence in check.

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Dandong is one of the larger cities in Liaoning province, whose rust-belt economy has struggled under national campaigns to curb industrial overcapacity and ease pollution. Liaoning was China’s worst performer in the first half of this year, registering GDP growth of 2.1 per cent, compared with the national rate of 6.9 per cent, according to official statistics.

“The economy hasn’t been doing well here for the past two years,” one trader said. “This is making a bad situation worse.”