P 210502Z MAY 09
FM AMCONSUL SHENYANG
TO SECSTATE WASHDC PRIORITY 8727
INFO CHINA POSTS COLLECTIVE PRIORITY
AMCONSUL VLADIVOSTOK PRIORITY 
CIA WASHDC PRIORITY 0184
COMUSKOREA J2 SEOUL KOR PRIORITY
DIA WASHDC PRIORITY 0136
JICPAC PEARL HARBOR HI PRIORITY 0064
NSC WASHDC PRIORITY

S E C R E T SHENYANG 000092 
 
 
DEPARTMENT FOR EAP/CM, EAP/K, INR 
MOSCOW PASS TO VLADIVOSTOK 
 
 
E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION 
TAGS: CH ECON KN KS PGOV PREL RS
SUBJECT: PRC-DPRK BORDER ECONOMY: SOME EXASPERATION ON THE 
CHINESE SIDE, ACTIVITY ON THE KOREAN SIDE 
 
REF: SHENYANG 76 
 
Classified By: Consul General Stephen B. Wickman.  Reasons 1.4(b/d). 
 
¶1. (C) SUMMARY: Chinese businessmen and government officials 
may be experiencing "North Korea fatigue" and, against the 
backdrop of the DPRK's April 5 missile launch, may in the 
future become less enthusiastic about undertaking investment 
opportunities in the DPRK.  Trade at Dandong, which accounts 
for the bulk of the DPRK's trade with the outside world, 
appears to be ongoing but largely one-way.  Along other parts 
of the border, economic activity appeared to be robust in 
mid-May.  END SUMMARY. 
 
¶2. (U) Congenoff and assistant visited Dandong May 11-12 and 
the Yanbian Korean Autonomous Prefecture May 13-17 to record 
developments along the North Korean border.  Border sites 
observed included Dandong by the Yalu River, and Nanping/Musan, 
Songhak-ri, Yuseon, Sanhe/Hoeryong, Kaishantun/Sambong, and 
Tumen/Namyang along the Tumen River (see paras 6-14 for details.) 
 
SOME EXASPERATION: DPRK INVESTMENT NO LONGER AS ATTRACTIVE 
--------------------------------------------- ------------- 
¶3. (C) Wu Jianhua (protect) a government specialist on North 
Korea and PRC-DPRK border issues at the Liaoning Academy of 
Social Sciences (LASS) reported that he recently received 
kudos from Liaoning Governor Chen Zhenggao for presenting a 
comprehensive report detailing the risks and rewards of DPRK 
investment and trade at the current juncture.  Wu said that 
most of the government officials he knew fell squarely into 
two camps, one side believing that the historical alliance 
and strategic value of the DPRK justified further support, 
the other feeling the DPRK's increasingly difficult and 
uncontrollable behavior was fast becoming liability to the 
Chinese government.  Wu cited the missile launch as a 
trust-breaker and embarrassment to the Chinese government, 
but he also said that the tangible reality of diminishing 
returns on DPRK trade and investment played an even larger 
factor in this regard.  Wu also pointed to the rampant 
smuggling of goods across the border as an impediment to 
healthy, normalized trade (NOTE: Chinese leaders in Dongbei 
have historically entertained the notion of investing in 
North Korea; earlier this month, the Jilin vice governor 
returned from a four-day junket in Pyongyang.) 
 
¶4. (S) A similar sense of frustration was expressed recently 
by Feng Yi (protect), whose nominal title is the Dandong-based 
representative of the Shanghai Automotive Industries Corporation 
Import/Export Division.  In reality, Feng says he is in charge 
of the Chinese government's aid program to North Korea, traveling 
throughout the DPRK regularly and coordinating all cross-border 
shipments using the Dandong Land Port (NOTE: Feng has also been a 
Mission China contact for facilitating the movement of USG-related 
items in and out of North Korea.)  Feng recently shared with 
congenoffs that the Chinese government had agreed to ship 
180,000 tons of grain to North Korea in exchange for North 
Korea's delaying or cancelling its April 5 missile launch. 
On April 5, Feng said he was in North Korea distributing the 
last grain shipment even as the missile launched. 
 
¶5. (C) Sino-Korean and lifelong Dandong resident An Shengyi 
(protect) has extensive experience dealing with South and 
North Koreans as a businessman, trader, and as the Dandong 
reporter for the Liaoning Chaoxian Wenbao.  Up until recently, 
An reported, many of his friends and acquaintances were tempted 
by DPRK business opportunities and followed the blow-by-blow 
accounts of when the "DPRK would open Sinuiju."  After numerous 
frustrations and failures over the last decade, however, An 
said most people were fed up, summing up their attitude thusly: 
"the DPRK can come along for the ride, or they can continue to 
just lose the way they do; at this point, it's their choice." 
An said that the only commercially-viable DPRK resource now is 
coal because iron ore and many other sectors in North Korea were 
a losing proposition for Chinese businessmen. 
 
BORDER SNAPSHOTS: MACHINERY ACTIVE BETWEEN TUMEN AND MUSAN 
--------------------------------------------- ------------- 
¶6. (C) Mid-May trips to Dandong and the stretch of the Tumen 
River between Musan and Tumen showed an increase in the 
amount of vehicular traffic and machinery on the North Korean 
side over the previous trips in mid-April.  Dandong trade was 
all one-way, however, from China to North Korea.  In Yanbian, 
congenoff visited sites on a weekend and was unable to 
observe any cross-border activity at the land ports.  He did, 
however, reconfirm previous findings of an increased Chinese 
security posture along the border directed at third-country 
nationals (Ref A.) 
 
¶7. (C) DANDONG: On the afternoon of May 11, only about 30 
vehicles traveled from the DPRK to China.  Almost all were 
completely empty.  One or two vehicles were carrying some 
sort of load, but the rest, including five flatbed trucks 
were seen speeding back across the bridge.  One crane 
returned to China and a lone North Korean locomotive returned 
to North Korea.  At about 1600, a closed-cab military truck 
was escorted into North Korea by two black sedans bearing 
military plates which were escorted by three white Customs 
Service vans.  The Customs vans returned minutes later, but 
the sedans and truck did not.  Upstream of Dandong, congenoff 
observed several hundred Chinese military personnel 
conducting training exercises with pontoon bridges and other 
amphibious craft along the Yalu River.  The taxi driver said 
that the military regularly engaged in this &contingency8 
training.  At the narrowest point of the border between China 
and North Korea, for a 20 RMB admission fare, a private 
landowner escorted congenoff to the edge of the river and 
said that for an additional 50 RMB she could call out a North 
Korean guard for a cigarette, emphasizing only that 
photography was forbidden.  She added that people used to 
take pictures freely but that now it was too "sensitive" 
(congenoff demurred.) 
 
¶8. (C) DANDONG (CONTINUED): On the morning of May 12, the 
Dandong Land Port's staging lot was about half-full with 
overloaded trucks, over five new minibuses and five pickup 
trucks having no license plates, along with a few cranes and 
other machinery.  There were at least 50 DPRK citizens 
waiting around the customs house, along with another roughly 
50 Chinese citizens, almost all of whom sounded like 
Sino-Koreans or Korean Chinese.  In the parking lot, there 
was a touring bus carrying North Korean passengers with a 
sign showing service from Yingkou to Dandong.  Congenoff 
overheard one group of North Korean men talking disgustedly 
about the arrest of "stupid/incompetent" Pomminnyun 
activists in South Korea.  No grain or foodstuffs were 
observed in the cargo, but the bags and crates were full of 
consumer products and clothing.  Individual Chinese citizens 
were carrying lots of fruit and other such foodstuffs, but 
one could not tell if there was any grain.  By 1000, over 50 
vehicles had crossed over into the DPRK, all of which were 
completely full, if not overloaded.  At 1030, the regularly 
scheduled train from Beijing to Pyongyang crossed over to the 
DPRK with one locomotive pulling a boxcar and two passenger 
cars. 
 
¶9. (C) NANPING/MUSAN: Upon entry to the border region from 
Helong on the morning of May 16, there was a People's Armed 
Police (PAP) checkpoint that only functioned to stop vehicles 
incoming from the border region.  There was no traffic at 
Nanping, the closest land port to the North Korean iron 
mining center, Musan.  There was a small excavator on the 
North Korean side moving dirt underneath the bridge.  In a 
riverside village upstream of Nanping, there was a tractor 
pulling a cart; over 10 sheep and three cows grazing in the 
fields.  Downstream of Nanping, there were three unattended 
cows along the riverbank.  In Musan, there were many signs of 
activity, with tens of people walking along different 
streets, washing clothes in the river, and working alongside 
the riverbank. 
 
¶10. (C) SONGHAK-RI: This area had a functioning lumberyard 
with a fully engaged work crew and a large crane lifting and 
moving logs.  A dog and a cow were off to the side of the 
lumber yard.  Downstream of Songhak-ri, there was a group of 
over 20 people wearing white hats, farming an isolated plot 
halfway up a mountainside, distant from the nearest village. 
 
¶11. (C) YUSON: This urbanized area featured another active 
lumberyard with an operational crane and a team of workers. 
Along the riverbank, there were three dump trucks and a large 
excavator working together to move dirt.  There were three 
groups of 3-5 people engaged in agricultural work in the 
fields and a considerable amount of foot traffic in this 
large district just west of Hoeryong. 
 
¶12. (C) SANHE/HOERYONG: Late in the afternoon of May 16, a 
North Korean locomotive carrying two cars headed downstream 
in the direction of Tumen with 5-7 soldiers hanging off the 
back.  Upon departing the Sanhe border region for Yanji, 
congenoff encountered a PAP security checkpoint with four 
armed soldiers carrying automatic rifles.  They asked for 
identification, opened the trunk, and searched through bags 
in the vehicle. 
 
¶13. (C) KAISHANTUN/SAMBONG: On May 17, there were over 20 
bicycle riders moving along the main road on the Korean side 
on a rainy and windy day.  At one point, a motorcycle sped by 
the bicycles.  There was a group of 5-7 border guards and 
people in white hats along the riverbank.  Further 
downstream, there was the occasional cow or dog around each 
village. 
 
¶14. (C) TUMEN/NAMYANG: There was no movement on the bridge on 
Sunday, May 17, but there were 4 dump trucks traveling along 
the upland road north of Namyang on the Korean side. 
Upstream of Tumen, there was a group of 5 people in white 
hats working on the railroad in a downpour. 
 
WICKMAN