hankyoreh

linking North Korea and China

In China’s Jilin and Liaoning provinces, which skirt the border with North Korea, foreign currency transactions between the two countries have been halted. The same freeze on commerce was found in nearby Dandong city. People familiar with North Korean trade issues said the suspension was ordered by Chinese authorities in order to strictly regulate currency transactions between the two nations.

The South Korean embassy in Beijing has confirmed the Chinese government’s temporary suspension of cash transfers to and from North Korea. And in Dandong, Chinese businessmen who work with North Korea said on October 16 that they did not receive their bank payments owed by North Korea.

A Chinese businessman, who operates a garment factory in North Korea, said, "I’m considering using a European bank because I didn’t receive payment from North Korea today."

Another businessman, who operates a consulting company for North Korean trade, said, “Before October 13, I could remit foreign currency from North Korea. But since October 13, I can’t send money.” The businessman confirmed that foreign currency transactions with North Korea were suspended in Jilin and Liaoning provinces as well as in Dandong.

An accountant at a trading company in Dandong said, “I heard from an official at the Bank of China that the Chinese government ordered the temporary suspension of cash transfers with North Korea in order to accurately figure out where the money is going."

Some observers say the suspension measure was the banks’ own decision, citing a natural reaction due to fears of a plummeting North Korean economy following the October 14 United Nations Security Council resolution calling for tougher sanctions against Pyongyang. However, given China’s centralized economy, such a measure may be impossible without say from the government.

The official at the South Korean embassy in Beijing, who confirmed the temporary suspension of cash transfers to North Korea, said, “Currently, the suspension is confined to Dandong and some other areas, but we don’t know when it will end or whether the measures will expand.”

However, on the same day, banks in Beijing were not taking such measures. Major banks such as the Industrial and Commercial Bank of China, the China Transportation Bank, and the China Construction Bank said that there would be no problem in sending money to and from North Korea, if the purpose is legal and the recipient’s identity is clear.

A diplomatic source in Beijing said, “So far, the Chinese government’s suspension of cash transfers to North Korea isn’t seen as a full-fledged measure.”