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C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000126 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR INR, EAP/CM, EAP/K 
 
E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION 
TAGS: PREL PINR PGOV ECON KN KS CH
SUBJECT: PRC-DPRK: BORDER INSPECTIONS AND TRADE ISSUES IN 
JUNE 2007 
 
 
Classified By: CONSUL GENERAL STEPHEN B. WICKMAN. REASONS: 
1.4(b)/(d). 
 
¶1. (C) SUMMARY: Official Chinese scrutiny of land-based 
PRC-DPRK cargo/passenger traffic continues to range along 
the border into mid-2007.  Land ports in Nanping (conduit 
for the many tons of iron ore extracted from North Korea's 
Musan mine) and Dandong are sites of significant levels of 
activity.  Yanbian-based contacts with recent experience in 
shipping goods across the border report that they have not 
encountered any changes in Chinese procedures or slowdowns 
in land shipments this year.  Sources elsewhere in Yanbian 
dismiss recent media reports about the impending 
establishment of a PRC-DPRK "free trade zone" in Tumen; 
they note instead the growing frustration of Tumen 
officials, who sense the DPRK is stalling on--and possibly 
obfuscating about--the proposal, which in actuality calls 
for a barter-trade area.  END SUMMARY. 
 
¶2. (C) Poloff traveled to a number of key points along the 
PRC-DPRK border, including Dandong, Donggang and Hushan 
(June 25-27), as well as Yanji, seat of the Yanbian Ethnic 
Korean Autonomous Prefecture; Nanping, across from Musan, 
home to the largest iron mine in North Korea, also among 
Asia's largest; and Chongshan, which abuts Samjang (June 
18-21).  This is the first of two cables; the second 
examines several discrete issues, including North Korean 
border-crossers and narcotics, among others. 
 
CROSS-BORDER TRADE AND INSPECTIONS: THREE PORTS 
--------------------------------------------- -- 
¶3. (C) DANDONG/SINUIJU. Activity at the Dandong Land Port 
on the morning of June 27 appeared more robust than 
Poloff's recent visits during the same periods of the day. 
Between 1000 and 1030, nearly 30 mostly large, closed 
Japanese-made North Korean container trucks crossed from 
Sinuiju into Dandong, where 40-50 North Korean trucks that 
had crossed earlier that morning sat parked, queuing to 
exit the port.  Quarantine personnel sprayed a disinfectant 
on the tires of incoming trucks; PRC customs officials 
inspected North Korean drivers' paperwork and quickly gazed 
into many cargo holds.  Another quarantine official waved 
what appeared to be a small, hand-held meter/gauge outside 
the holds of a handful of trucks.  Poloff also observed one 
North Korean driver that had just cleared customs quickly 
stop just two meters away from PRC customs and People's 
Armed Police (PAP) personnel, extract two large metal 
cylinders and a bag hidden near his tires and slyly pass 
them to a waiting Chinese partner who quickly sidled off 
with the goods.  No one took any notice.  PRC scrutiny 
seemed to decrease when, between 1030 and 1130, 
approximately 175 mostly large, closed Chinese container 
trucks--perhaps half of them sporting pre-clearance tags-- 
crossed into Sinuiju virtually uninspected.  The few open- 
bed Chinese trucks among this group carried everything from 
heavy machinery to fruit and electronics; three Chinese 
also drove over the border in new ROK-made forklifts. 
Customs performed no visible inspections of most Sinuiju- 
bound cargo traffic, but a quarantine official did pull 
over the sole North Korean truck Poloff spotted crossing 
back home that hour. 
 
¶4. (C) CHONGSHAN/SAMJANG. Cross-border traffic proved 
almost incomparably lighter many hundreds of kilometers 
north at Chongshan--a small border locality nearly 150 
kilometers south of Yanji and across the Tumen River from 
Samjang in the DPRK.  Between 1015 and 1030 on June 21, 
three large, empty North Korean container trucks crossed 
back into North Korea from Chongshan's Guchengli Land Port, 
subject to no visible inspections by the sole Chinese PAP 
guard stationed on the Chinese side of the short bridge 
connecting the two countries.  North Korean border guards 
on the other side proved far more interested in the 
returning trucks and searched each of the cabs for several 
minutes.  Poloff observed a fairly heavy security (i.e., 
PAP) presence in Chongshan, which without the land port is 
essentially a compact assemblage of homes and shops. 
 
¶5. (C) NANPING/MUSAN. Nearly 50 kilometers north of 
Chongshan in Nanping--across from Musan--PAP guards on June 
21 requested that Poloff leave the port facility after just 
 
SHENYANG 00000126  002 OF 003 
 
 
five minutes of observation starting at 0915.  The bridge 
had no traffic at the time, and one PAP guard said 
Poloff had just missed the morning rush.  But earlier that 
morning between 0830 and 0900 on the small, two-lane road 
from Yanji to Nanping, Poloff spotted at least ten of the 
Yanbian Tianchi Industrial Trade Company's distinctive red, 
open-container trucks that cart Musan's ore across the 
border to Tianchi's nearby processing facility.  Later in 
the morning, looking across into Musan proper while on the 
road to Chongshan, Poloff also observed at least ten 
(empty) Tianchi trucks slowly winding their way toward the 
Musan mine.  A high-level Chinese official in the office 
overseeing the administration of Yanbian's ports told 
Poloff later on June 21 that the outflow from Musan 
continues to be significant, though flows often vary on any 
given day. 
 
INSPECTIONS IN YANBIAN: A FOREIGNER'S EXPERIENCE 
--------------------------------------------- --- 
¶6. (C) A Yanbian-based Western NGO worker who periodically 
ships construction supplies and humanitarian goods to the 
DPRK told Poloff on June 21 about inspection procedures 
near Hunchun.  When shipping large quantities of goods to 
Rason via container truck, our source has been required to 
hire a local customs agent who helps prepare the requisite 
paperwork and (nebulously) "facilitate" the shipment.  Once 
loaded but before heading to the border, the cargo truck 
must appear at an official facility approximately 40 
kilometers outside of Hunchun.  The truck is met by the 
customs agent--with paperwork in hand--and must then drive 
through a large detector/scanning machine of sorts before 
being considered "sealed."  No additional physical 
inspection takes place, and the truck is then directed to 
the Quanhe Land Port, where the paperwork is checked, and 
then passes into the DPRK and on to Rason.  In our source's 
experience, transporting goods by van/car is far easier 
because passenger vehicles have not been subject to the 
comparatively more rigorous procedures for cargo trucks. 
Pro-forma paperwork is required, for example, but hiring a 
customs agent is not. 
 
¶7. (C) Echoing remarks by other contacts recently involved 
in cross-border shipping, our source had encountered no 
changes in procedures on the Chinese side, nor any 
slowdowns in shipments over the past few months.  North 
Korean border officials, in our source's experience, have 
proven far more scrupulous than the Chinese side.  Upon 
arriving on the DPRK side, for instance, North Korean 
border officials have actually climbed into her cargo 
truck, eyeballing goods and then (presumably) logging their 
findings into a computer system.  Our source noted, too, 
that North Korean quarantine officials have at times proven 
surprisingly fussy about accepting certain agricultural 
products.  A fellow NGO worker recently attempted to bring 
large quantities of crop seeds--to grow food--into the 
North via Quanhe, only to have them refused by North Korean 
quarantine authorities at the PRC-DPRK border, our source 
recalled. 
 
DIM OUTLOOK FOR PRC-DPRK TRADE ZONE IN TUMEN/NAMYANG 
--------------------------------------------- ------- 
¶8. (C) Contacts in Yanbian claim that recent ROK press 
reports about the impending establishment of a PRC-DPRK 
"free trade zone" in Tumen/Namyang are incorrect.  Yanbian 
University DPRK experts GAO Jingzhu and LIAN Changhao on 
June 20 told Poloff that Tumen's actual proposal, made to 
DPRK authorities between 2006 and 2007, merely envisions a 
barter-trade zone.  The high-level official overseeing 
Yanbian's ports on June 21 confirmed this and dismissed the 
proposed zone as something that will probably never 
actually be realized.  Local DPRK officials' promises about 
the possibility of establishing the zone are not 
"credible," the official grumbled, and Pyongyang's approval 
has not been forthcoming.  Several Tumen officials were 
recently taken aback during a recent bilateral negotiating 
session when they discovered that the North Koreans seemed 
to have greatly exaggerated the likely speed of Pyongyang's 
approval of--and the amount of preparatory work they had 
actually been doing for--the zone, Gao Jingzhu noted. 
Tumen officials remain hopeful that a PRC-DPRK barter-trade 
zone could help stimulate the local economy, but Gao, Lian 
 
SHENYANG 00000126  003.2 OF 003 
 
 
and others cautioned that these types of proposals often 
turn out to be local PRC officials' attempts to pad their 
resumes with non-substantive, prestige projects. 
WICKMAN