VZCZCXRO6777
RR RUEHCN RUEHGH RUEHVC
DE RUEHSH #0164/01 2590401
ZNY CCCCC ZZH
R 160401Z SEP 09
FM AMCONSUL SHENYANG
TO RUEHC/SECSTATE WASHDC 8839
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAIIA/CIA WASHDC 0215
RHMFISS/COMUSKOREA J2 SEOUL KOR
RUEKJCS/DIA WASHDC 0158
RUCGEVC/JOINT STAFF WASHDC 0114
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC 0173

C O N F I D E N T I A L SECTION 01 OF 02 SHENYANG 000164 
 
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 PREL RS
SUBJECT: DPRK BUSINESS LEANS FORWARD IN NE CHINA 
 
REF: 08 SHENYANG 123 
 
Classified By: Consul General Stephen B. Wickman.  Reasons 1.4(b)/(d). 
 
¶1. (C) SUMMARY: The DPRK seems to be taking a more active 
approach to business in Northeast China when compared to 
2008 (reftel), bringing a large government and business 
delegation to this region's major trade fair.  A senior- 
level DPRK official used a public forum to make political 
statements criticizing the United States and used a private 
forum to make detailed pitches for increased investment in 
the DPRK.  North Korean traders seem to be more outgoing and 
forward than last year.  END SUMMARY. 
 
DPRK IN PUBLIC: U.S BAD, LET'S CREATE A NEW WORLD ORDER 
--------------------------------------------- ---------- 
 
¶2. (U) Consul General and ConGenOff participated in 
Northeast China's principal regional trade fair in Changchun 
September 1-3.  On September 1, DPRK Vice Trade Minister Koo 
Bon-tai spoke at the High Level Forum on Northeast Asia 
Economic and Trade Cooperation, which featured Vice Premier 
Li Keqiang as the guest of honor, including luminaries such 
as former French Prime Minister Dominic de Villepin, 
Philippines Vice President Noli De Casto, and Mongolian 
Prime Minister Miegombyn Enkhbold. 
 
¶3. (SBU) While the other 12 speakers used their limited time 
to share ideas on economic cooperation in Northeast Asia, 
Koo engaged in a 5-minute political statement that only 
obliquely touched upon economics and Northeast Asia.  He 
singled out the United States for creating the global 
financial crisis and excoriated Western forces for passing 
judgment on the DPRK's missile launch, claiming space 
exploration as a sovereign right.  Koo also referred 
directly to international sanctions, saying that Kim Jong-il 
would never succumb to such measures.  Koo ended by 
suggesting that the countries of the world prevent future 
economic crises by constructing a new world trade order 
based upon euros, renminbi, and rubles instead of dollars. 
 
DPRK IN PRIVATE: SHOW ME THE MONEY, FOCUS ON INVESTMENT 
--------------------------------------------- ---------- 
 
¶4. (SBU) Koo showed a markedly different approach when he 
gave a business-focused presentation at the DPRK Business 
Day luncheon on September 2, open only to invited guests and 
media.  The audience was mainly comprised of local officials 
from Jilin Province and the Yanbian Korean Autonomous 
Prefecture.  The Jilin vice governor said that in 2008 PRC- 
DPRK trade reached USD 770 million and that, as of September 
2009, there were 31 registered Chinese companies operating 
in the DPRK with a total investment of USD 100 million. 
When China's trade volumes are disaggregated, Jilin Province 
becomes the DPRK's fourth-largest trading partner. 
 
¶5. (SBU) The DPRK's keynote presentation was on the foreign 
investment laws adopted in 1984.  The DPRK offers joint 
ventures five initial years of tax benefits with three years 
of tax-free status followed by two additional years at 50- 
percent tax-free.  The DPRK partner in the joint venture is 
responsible for securing and maintaining title to any land. 
North Korea especially welcomes foreign investment in the 
coal mining, electrical, railway, and metals sectors.  The 
DPRK also protects foreign-invested industries by 
selectively limiting similar sector imports produced outside 
of the DPRK.  This presentation tracks with recent and 
upcoming DPRK presentations in other parts of China to 
advertise itself as an investment option. 
 
¶6. (C) Koo spoke positively about business opportunities in 
North Korea and pointed out to his Chinese guests that he 
was honored to highlight the 60th anniversary year of PRC- 
DPRK relations.  The Chinese guest of honor, a Jilin 
Province vice governor, did not mention the 60th year of 
PRC-DPRK relations in his own speech.  Later that evening, 
the Yanbian Korean Autonomous Prefecture's Commerce 
Department director smiled and told ConGenOff that the 
Chinese were "used to dealing with the North Koreans, their 
style of business" and knew how to "entertain" such 
overtures and new ideas but had noticed a renewed DPRK 
emphasis on commercial and economic affairs. 
 
 
SHENYANG 00000164  002 OF 002 
 
 
DPRK TRADE DELEGATION: NUMEROUS AND CURIOUS 
------------------------------------------- 
 
¶7. (C) The North Korean trade exhibit was sizeable, larger 
than that of the South Koreans and Japanese, but mainly 
engaged in the sale of low-value goods aimed at the average 
Chinese shopper, such as herbal medicines, agricultural 
products, and trinkets.  None of the entities banned by 
UNSCR 1874 were on the official list of participating 
businesses.  Most of the traders came equipped with personal 
business cards, which in a change from years past, included 
personal phone extension numbers in Pyongyang and individual 
e-mail addresses.  Furthermore, North Korean traders easily 
offered these business cards to interested shoppers. 
 
¶8. (C) The North Korean traders did not seem to pay much 
attention to the offerings of the neighboring Mongolian and 
Taiwan delegations, among others.  DPRK officials and 
traders did, however, frequent the exhibits of the machine 
tool manufacturers and agricultural heavy machinery; they 
seemed to pay extra attention to the flashy BMW and 
Mercedes-Benz exhibitions, where several stopped to ask 
questions and take pictures of promotional materials and the 
vehicles. 
 
WICKMAN