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FM AMCONSUL SHENYANG
TO RUEHC/SECSTATE WASHDC PRIORITY 8799
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 0740
RUEAIIA/CIA WASHDC 0203
RHMFISS/COMUSKOREA J2 SEOUL KOR
RUEKJCS/DIA WASHDC 0148
RUCGEVC/JOINT STAFF WASHDC 0108
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC 0163

C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000143 
 
SIPDIS 
 
 
 
DEPARTMENT FOR EAP/K, EAP/CM, 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: RASON, PUST, PEOPLE-TO-PEOPLE 
EXCHANGES 
 
REF: A. 08 SHENYANG 185 
     ¶B. SHENYANG 90 
 
Classified By: Consul General Stephen B. Wickman.  Reasons 1.4(b)/(d). 
 
¶1. (C) SUMMARY: Rason is the most open and liberalized place 
in North Korea, but minor improvements in relations with 
DPRK officials there should not be read as evidence of 
further engagement or liberalization, according to two key 
NGO contacts.  Meanwhile, the Pyongyang University of 
Science and Technology (PUST) plans to hold its opening 
ceremony on September 17 and PRC-DPRK people-to-people 
exchanges seem to be robust.  DPRK uneasiness with Americans 
continues.  END SUMMARY. 
 
¶2. (U) ConGenOff traveled to the Yanbian Korean Autonomous 
Prefecture August 2-9 to meet with contacts to discuss 
various economic issues, including ongoing business and 
humanitarian projects in North Korea. 
 
RASON: MORE RUSSIANS, MORE PHONES, MORE FREEDOMS? 
--------------------------------------------- ---- 
¶3. (C) On August 5, ConGenOff met with a naturalized Amcit 
NGO worker of Korean descent who has been living in Rason 
for extended periods since 2008.  His organization is 
nearing completion on a fertilizer plant in Rason and he 
will permanently move with his wife and three children to 
Rason as soon as the construction is done. 
 
¶4. (C) This NGO worker said that Russian residents are very 
prominent in Rason and that he frequently sees them around 
town (Ref A).  He also reported the presence of many Chinese 
petty traders, though these people are not resident in 
Rason.  He said that the Russians are allowed to travel 
throughout town without "minders," as are the mostly Han 
Chinese petty traders and Sino-Korean aid workers. As an 
American, however, our contact said he is constantly 
escorted by two guides.  He said that the Hong Kong-invested 
Casino Hotel (of which reportedly Jackie Chan was a key 
investor) has re-opened for guests, though the casino 
itself, which drew the ire of Chinese officials, remains 
closed. 
 
¶5. (C) Markets are now restricted to operating for two hours 
in the afternoon, from roughly 1730 to 1930.  Another Amcit 
NGO source cited similar restrictions, saying that the 
requirement for everyone to labor outdoors during the day as 
part of the 150-Day Battle is what limited the hours to the 
evening. 
 
¶6. (C) All foreigners headed to Rason are required to check 
their cell phones with DPRK customs officials, but in a new 
development, foreigners in Rason can now use North Korean 
cell phones on a network installed by China Telecom. 
Outgoing calls are RMB 12 per minute and incoming calls are 
RMB 4.  However, neither of our NGO contacts were interested 
in getting a North Korean cell phone because startup fees, 
including the handset and activation, were over USD 1000. 
 
¶7. (C) A contact of ours who has been involved in Rason for 
the better part of this decade is now focusing on developing 
a small-scale food processing plant in Rason.  He told us 
August 8 that his operation is leaner and smaller than that 
of the better-known aid missions.  His organization used an 
initial USD 15000 investment to buy a share in a pre- 
existing North Korean brewery.  He employs 10 North Korean 
employees and three Sino-Korean aid workers to run the 
plant, which processes China-sourced soybeans to produce 
various soybean products for export to South Korea. 
 
¶8. (C) Our contact complained about the escalating nature of 
fees and favors that the DPRK officials have exacted on his 
operation.  He said that Rason Port is exclusively served by 
North Korean shipping lines, now that previous Chinese 
tenants, such as the Yanbian Hyuntong (Xiantong) Trading 
Company had been evicted (NOTE: An August 10 Yonhap News 
report confirmed this story by reporting that the last 
remaining South Korean company that used to ply the Rason- 
Busan route decided to close its operations in March 2009 
after failing to negotiate customs-free trade rights that it 
had enjoyed from 1996 to 2007.)  The NGO leader said that he 
 
SHENYANG 00000143  002 OF 003 
 
 
pays about USD 700 to the DPRK brewery per ton of exported 
product and that the new North Korean shipping company asks 
for about USD 1300 per ton to ship out to Busan, a couple of 
hundred dollars higher than the previous shipper. 
 
¶9. (C) This NGO leader was most impressed by his perception 
of improved religious tolerance on the part of his DPRK 
counterparts.  During regular visits over the last decade, 
he said he would try to mask his pre-meal prayers by simply 
bowing his head when dining with North Korean officials. 
However, his DPRK host recently called attention to the NGO 
leader in front of a large group and asked him if there was 
anything he needed to do before eating.  The NGO leader then 
said a short religious prayer to which the DPRK official 
smiled and nodded approvingly.  The Amcit says that he 
maintains good contacts with these DPRK interlocutors, 
meeting with them when they visit Yanbian. 
 
¶10. (C) Though both NGO workers expressed optimism for 
further improvements in the Rason working environment, they 
remained skeptical about whether any of these small-scale 
openings represented anything more than just what they 
appeared to be - token changes to facilitate the working 
relationship. 
 
PUST OPENING CEREMONY RESCHEDULED FOR SEPTEMBER 17 
--------------------------------------------- ----- 
¶11. (C) ConGenOff met with Yanbian University of Science and 
Technology (YUST) Vice President David Kim on August 3 to 
discuss the latest reversals surrounding the opening 
ceremony of the Pyongyang University of Science and 
Technology (PUST).  Similar to the sudden and unexpected 
reversals that have characterized this project from the 
outset (Ref B), as soon as the DPRK Ministry of Education 
and PUST officials had agreed upon August 27 as an opening 
date the North Koreans suddenly asked to reschedule for 
September 17.  Privately, Kim confided that he was relieved 
since it allowed his side more time to adequately prepare 
for the event (NOTE: Media reports have noted that September 
17 is also the last day of the DPRK's ongoing 150-Day 
Battle.)  Kim confirmed that DPRK Vice Minister of Education 
Jeon Geuk-man is the co-operating president of PUST along 
with YUST President James Chinkyung Kim.  He and his wife 
returned to Pyongyang on August 6 for what is intended to be 
a permanent sojourn as the onsite PUST program manager. 
 
¶12. (C) Kim told us the PUST delegation will be required to 
enter as a group on September 16 and depart together on 
September 18.  The group includes several people from the 
Western media, including correspondents from the New York 
Times, Wall Street Journal, and Los Angeles Times. 
 
PRC-DPRK EXCHANGES CONTINUE, NERVOUSNESS ABOUT AMERICANS 
--------------------------------------------- ----------- 
¶13. (U) Local papers continue to highlight exchanges between 
China and North Korea during the year of the 60th 
anniversary of PRC-DPRK relations.  A North Korean soccer 
team visited Yanbian for two weeks and played four matches 
against local teams.  The Chinese central government 
authorities upgraded the status of Yanbian's last two 
second-tier land ports up to first-tier status, opening them 
to people from outside of Yanbian.  A North Korean orchestra 
will commence a month-long tour throughout China, playing 
greatest hits from 1970s North Korean cinema.  However, one 
report stated that Yanbian to DPRK tourism fell by 50 
percent in June, with Beijing- and Tianjin-based tourists 
citing H1N1 as a deterrent, while others were hampered by 
changes in entry-exit requirements for tourists. 
 
¶14. (C) A retired Yanbian trade and commercial official told 
us on August 3 that the attitude of official North Koreans 
on business in Yanji was very relaxed and much less stiff 
than just a few years ago.  He said that when the North 
Korean state was floundering in the first part of this 
decade, the DPRK officials tried harder to maintain a gruff 
exterior when conducting business.  Of late, however, he 
said the DPRK officials were less guarded and more willing 
to engage at least in small talk. 
 
¶15. (C) When asked about the attitude of DPRK citizens 
towards exchanges with Americans, a Sino-Korean trader said 
 
SHENYANG 00000143  003 OF 003 
 
 
that no private DPRK businessperson would want to risk being 
seen around an American, especially an American official. 
As for official North Koreans, the trader said that with the 
exception of some people at the DPRK Embassy in Beijing, 
nobody was probably high enough in the hierarchy to justify 
being seen around Americans.  The trader speculated at the 
potential line of questioning that a North Korean would 
receive: "what did you do to make the foreigner even 
consider offering a handshake?"  Another Sino-Korean 
businessman reiterated his view that the DPRK Consulate in 
Shenyang was merely a commercial enterprise staffed by 
consuls whose primary responsibility was to make money and 
provide prompt and personalized customer service to the 
people doing significant business with North Korea, such as 
himself, saying that he merely had to make a single phone 
call to resolve paperwork. 
 
WICKMAN