North Korea Tries Market Economy a Stone’s Throw From China Across the Yalu River

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• published: 01 Jun 2015
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While North Korea is the most closed country in the world, international influences are creeping in, particularly in the capital, Pyongyang, and in key border cities and ports. FTV recently visited one such city, Sinuiju, where North Korea has slowly begun to experiment with market economy principles. Anne HuFTV News Director It’s time to board the train to the international economic zone of Sinuiju. One train a day leaves Pyongyang for Dandong, China. After about five hours we arrive at Sinuiju, a city on North Korea’s northwest border.Sinuiju is the capital of North Pyongan Province and, with more than 300,000 people, is North Korea’s third largest city. Across the Yalu River lies the Liaoning Province city of Dandong.The road and railway to Dandong share the same bridge.Anne HuFTV News DirectorWe’re at the northwest border of North Korea, in the Sinuiju International Economic Zone. Across the Yalu River is the Port of Dandong.Since being named an international economic zone in 2013, Sinuiju began to promote cross-border tourism in earnest. Foreign tourists can choose between one- or two-day cross border trips and river cruises.Kim Jung HyangSinuiju GuideFor the one- or two-day trips, bring your ID or passport to our travel agency in Dandong. We have also started a new trip that allows you to disembark (in North Korea) without the need for a passport or travel pass. Just go to the travel agency in China a day or two in advance.Strict access rules within the zone prevented us from getting the footage we desired. Next to buildings under renovation in Sinuiju we spotted old residences similar to the military dependents’ villages in Taiwan. Unfortunately, restrictions on foreigners interacting with inhabitants of these homes prevented us from asking their thoughts on life in this border town.Anne HuFTV News DirectorSinuiju is focused on developing light industry, as we can see at this cosmetics factory. Production is automated and packaging partially automated. The factory was established along the border to aid in growing export markets. ‘Spring Fragrance’ Factory GuideCurrently, most of our sales are domestic. “Spring Fragrance” in Sinuiju and “Galaxy” in Pyongyang are the country’s two largest cosmetics brands. They produce cleansing, skin care and cosmetics products. ‘Spring Fragrance’ Factory GuideOur bestseller among foreigners is the Korean ginseng toothpaste.This set of skin care products costs 600 renminbi for foreigners and 600 North Korean won for locals. That is 1/16th the cost of what foreigners pay. In fact, there are three tiers of prices in North Korea.At the low end of the spectrum are subsidized prices assigned to state rations. The second tier consists of goods that people can purchase from shops at market prices. Foreigners must use the third tier, which is much higher than the other two and about the same price one would expect to pay for similar products in other countries.GuideI bought these shoes in the department store. (Did you pay market price?) Yes.The red leather shoes our guide wears are Chinese imports purchased at a Pyongyang department store for RMB200, equivalent to about NT$1,000. This is the market price.The Tongnim County tourism hotel on the outskirts of Sinuiju reaches four-star standards. Locals who make purchases here qualify for subsidized prices, unlike foreigners who must pay much higher fees.Hotel guests can swim, play ping pong and volleyball, or participate in other exercises. Only foreigners are permitted in the casino.Shows aimed at attracting tourists have become more common. Waitresses who double as entertainers take a break from serving customers to change costumes and go on stage to perform.They then switch back to their regular uniforms and regular work.Tourism is at the forefront of economic change. While foreign tourists only gain a glimpse of North Korea during their short visit, locals involved in the tourism industry serve as intermediaries between their country and the outside world. One impact of outside influences is the adoption of a tipping culture between guides and the tourists they serve. Slowly, elements of the market economy are beginning to appear in the North Korean state.