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C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000244 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EAP/CM, EAP/K, PRM 
MOSCOW PASS VLADIVOSTOK 
 
E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION 
TAGS: PREL PREF PINR KN KS CH
SUBJECT: PRC-DPRK: UPDATE ON NK REPATRIATIONS/ASYLUM- 
SEEKERS; SMUGGLING; DPRK FOOD SHORTAGE CONCERNS; BORDER 
TRADE 
 
REF: A. (A) SHENYANG 205 
     ¶B. (B) SHENYANG 178 AND PREVIOUS 
 
Classified By: CONSUL GENERAL STEPHEN WICKMAN.  REASONS: 
1.4(b)/(d). 
 
¶1. (C) SUMMARY:  PRC border officials in Baishan tell us 
that they continue to apprehend and repatriate North Korean 
border-crossers in their jurisdiction.  Japan's Shenyang 
Consulate is now home to seven North Korean asylum-seekers, 
including two young children.  North Korean authorities 
near Sinuiju have launched an apparent crackdown on cross- 
border commodity smuggling, with border guards conducting 
house-to-house searches opposite Dandong, in a campaign 
that Chinese smugglers say has had minimal effect on their 
operations.  Contacts in Jilin Province have expressed 
growing concern about food shortages in the DPRK, one 
official noting that a North Korean delegation traveled to 
Changchun in late October requesting food aid from the 
Jilin provincial government.  PRC-DPRK trade transiting 
Dandong this year is on track for a double-digit increase, 
according to a trade official in the border city, a conduit 
for over half of all official PRC-DPRK trade.  END SUMMARY. 
 
¶2. (C) Poloff traveled to several points along the wintry 
PRC-DPRK border in late October and November, including: 
Baishan (October 31-November 1), just south of the Yanbian 
Korean Autonomous Prefecture; Linjiang (November 1), across 
from Chunggang, DPRK; and Dandong (November 7-8), opposite 
Sinuiju.  The following thematic update draws on site 
visits and conversations with government officials there, 
as well as on discussions with Korea specialists in 
Shenyang (October 30) and Changchun (November 5-6), capital 
of Jilin Province. 
 
NORTH KOREAN BORDER-CROSSERS: BAISHAN AND SHENYANG 
--------------------------------------------- ----- 
¶3. (C) Baishan--which administratively supervises a 
sprawling, key stretch of the PRC-DPRK borderlands that 
includes Changbai and Linjiang--continues to find and 
repatriate North Koreans that have crossed the border into 
its jurisdiction, according to WANG Hongwei, Director of 
the Baishan Foreign Affairs Office.  Wang told Poloff on 
November 1 that "not many" North Korean border-crossers had 
arrived this year because the North Korean side had been 
guarding its border "strictly."  He mentioned that some 
North Koreans apprehended in Baishan's administrative 
district this year have been returned to the DPRK via the 
Changbai and Linjiang land ports, opposite Hyesan and 
Chunggang, respectively.  The number of repatriations is 
"unclear," Wang said, because the Border Defense corps 
handles these issues, including the data on repatriations. 
(NOTE: Wang's comments--and Post has not been able to 
confirm their veracity--may suggest the existence of an 
informal, ad hoc channel for repatriations separate from 
Dandong and Tumen land ports, which a number of reliable, 
well-placed PRC contacts have told us on several occasions 
are the only two formal channels. END NOTE.) 
 
¶4. (C) Several hundred miles south of Baishan in Shenyang, 
the Japanese Consulate is again home, after a brief respite 
earlier in the year, to more North Korean asylum-seekers. 
Consul Shinichi KURITA (STRICTLY PROTECT) told Poloff on 
November 27 that his consulate very recently acquired two 
new arrivals, bringing to seven the total number of North 
Koreans--all with previous family/historical ties to Japan- 
-resident on the diplomatic compound.  Kurita noted that 
the PRC of late had granted relatively speedy exit 
permission for Japan's Shenyang-based cases, though this 
had not been true across the board and no real pattern had 
emerged on why some cases moved quickly.  He remained 
hopeful that some of the current seven (five have already 
been at the Japanese Consulate for three months) and 
 
SHENYANG 00000244  002 OF 003 
 
 
particularly the humanitarian cases of several children in 
poor health, would be allowed to depart China before the 
end of the year. 
 
CROSS-BORDER SMUGGLING, BORDER FENCING: DANDONG 
--------------------------------------------- -- 
¶5. (C) Several kilometers north of downtown Dandong, DPRK 
engineering troops continued fencing Yuchi Island, opposite 
Hushan, on November 7.  LU Chao (STRICTLY PROTECT), a Korea 
specialist at the Liaoning Academy of Social Sciences, told 
Poloff in Shenyang on October 30 that according to his 
Dandong-based contacts, the North Koreans had built the 
fence to prevent, or at least reduce, the small-scale 
cross-border commodity smuggling prevalent in the area. 
Asked about the fencing on November 7, several Hushan 
locals said they were unsure of its purpose but said they 
suspected it was part of an official effort to counter 
smuggling.  They added that the fencing (which only 
partially encloses the island) has had mixed effects.  On 
the one hand, they said the North Korean border guards 
stationed just across the Yalu River, with whom they often 
used to interact (e.g., bartering, smuggling at night), no 
longer dare to beg them for food.  On the other hand, they 
said the North Korean locals can and still do so, albeit 
with the consent of the border guards; they simply walk 
their way around the fence to the banks of the river to 
catch bags of food thrown across by Chinese on the other 
side. 
 
¶6. (C) One Hushan resident told Poloff that a crackdown on 
commodity smuggling was under way on the North Korean side, 
with border guards searching house-to-house for commonly 
smuggled commodities like metals (e.g., copper).  Fut 
another local, small-scale Hushan commodity smuggler 
explained that the putative crackdown has had minimal 
effect on his operations, as well as on those of other 
smugglers with whom he is friendly.  He claimed to still 
smuggle "nearly every day," selling on the Chinese side 
during the daylight hours what he acquires through DPRK 
border-guard intermediaries after nightfall.  The selection 
of wares shown Poloff included a North Korean bronze for 
RMB 1000 (USD 135), a porcelain vase for RMB 300 (USD 40), 
and a variety of other statuettes and small antiques.  He 
claimed that local Chinese police are apathetic about his 
operations. 
 
¶7. (C) Nevertheless, signs of what may remain a largely 
rhetorical PRC campaign against smuggling (writ large) in 
the greater Dandong area have translated into something 
more formal, if yet ineffectual.  During a drive along the 
road from Dandong south to Donggang on November 7, for 
example, Poloff observed a number of newly erected 
permanent signposts bearing metal placards warning 
residents against "drug smuggling," "alien smuggling," and 
other "illegal behaviors."  The placards replaced the 
flimsy red banners posted in the area previously and 
indicated they had been authorized by the local Border 
Defense Committee (see refs A and B for details on earlier 
efforts). 
 
DPRK FOOD SUPPLIES: JILIN 
------------------------- 
¶8. (C) A number of Chinese contacts in recent weeks have 
expressed concern about food shortages in the DPRK. 
Baishan FAO Director Wang told Poloff on November 1 that a 
North Korean delegation had traveled to Changchun during 
the week of October 22 "begging" for food aid (grain) from 
the Chinese.  Wang and his colleagues in Baishan estimated 
that neighboring DPRK localities would fare worse than last 
year on the food/agricultural front.  In Jilin Province's 
capital, Changchun, Korea specialists and the provincial 
government have been paying attention.  ZHOU Weiping 
(STRICTLY PROTECT) of the Jilin Academy of Social Sciences 
 
SHENYANG 00000244  003 OF 003 
 
 
noted on November 5 that one of her colleagues, ZHANG Feng, 
had recently completed an internal study of the food 
situation in North Korea.  Unwilling to provide details, 
Zhou said the report was quite "sensitive" and briefed to 
senior provincial leaders. 
 
BORDER OFFICIALS ON PRC-DPRK TRADE: DANDONG AND BAISHAN 
--------------------------------------------- ---------- 
¶9. (C) DANDONG. PRC-DPRK trade through Dandong rose 
appreciably during 2007, according to YANG Wenjia, a 
refreshingly professional and relatively open Director of 
the Dandong Foreign Trade and Economic Cooperation Bureau's 
Foreign Trade Administration Section.  Wang told Poloff on 
November 7 that Dandong-DPRK trade this year looks set to 
rise by fifteen percent over 2006, reaching nearly USD 700 
million.  The DPRK remains Dandong's largest trading 
partner, Yang said, accounting for over fifty percent of 
the city's total foreign trade.  He claimed that the 
composition of this trade has not changed appreciably this 
year and that UNSCR 1718 did not have a measurable impact 
on overall levels, even though Dandong Customs did step up 
inspections after October 2006. 
 
¶10. (C) BAISHAN. PRC-DPRK trade via Baishan looks to be on 
track for a similar appreciation.  ZHAO Lina, Chief of the 
Baishan Commercial Bureau's Foreign Trade Section, 
estimated on October 31 that Baishan-DPRK trade will end 
the year twenty percent higher than in 2006 (USD 180 
million, according to her earlier accounts).  DPRK-related 
trade accounts for roughly one-third of Baishan's total 
foreign trade; North Korean lumber and minerals, mostly 
transported through Changbai Port, are Baishan's largest 
imports.  Zhao, too, cited no major changes in Baishan-DPRK 
trade over the past year, whether as a result of UNSCR 1718 
enforcement or any other reason. 
 
¶11. (C) On the investment side, Zhao reported that Baishan 
firms continue to venture across the border into North 
Korea, though investors tend to be mostly small firms, even 
if some larger ones have invested in North Korean copper, 
iron and mining more broadly.  But the risk is 
considerable, Zhao explained, and benefits sometimes 
unclear.  She offered the example of potentially investing 
in North Korean lumber processing for the purpose of making 
flooring, one of Baishan's most lucrative exports.  Labor 
across the border is certainly cheap--roughly RMB 3 (USD 
.40) per month for a worker that would cost RMB 1000-2000 
(USD 135-270) per month in Baishan, Zhao claimed.  But 
constant electricity blackouts, poor equipment, high start- 
up costs, sub-par transportation infrastructure, and 
lingering political risk temper the appetites of many local 
Baishan investors, notwithstanding the potential labor 
savings. 
 
¶12. (C) TRADE ZONES.  Proposals for$new PRC-DPRK barter- 
trade zones in Baishan and Dandong still remain stuck in 
the proverbial mud, as they have for most of the year, 
according to border officials.  Baishan has proposed, and 
Beijing has approved, plans for a commodity-exchange zone 
in Changbai, opposite Hyesan, said Zhao Lina.  But the 
North Korean side "has not been constructive," according to 
Baishan FAO Director Wang, who noted that the long wait for 
a DPRK response continues.  Wang's deputy, Vice Director 
LIU Fulin, told Poloff he had even traveled to Guangxi 
Province to study its PRC-Vietnam border zone, which he 
assessed was doing quite well; the hope in Changbai, he 
explained, would be to replicate aspects of the Guangxi 
model.  As for Dandong, Foreign Trade and Economic 
Cooperation Bureau Director Yang explained that, while his 
city is eager for a barter-trade zone, the DPRK is simply 
"not ready," at least in the immediate future. 
WICKMAN