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A father and daughter shopping at a Pyongyang department store.

Here’s a pop quiz. (1) What’s the biggest market in North Korea? (2) What’s the biggest market in Pyongyang? (3) What’s the biggest wholesale clothing market in North Korea?

The biggest market is Sunam Market, in the city of Chongjin, North Hamgyong Province. In terms of area alone, it’s twice the size of Seoul’s Dongdaemun Market. Assuming just one merchant is manning each of the market’s stalls, some 17,000 merchants are working at the market.

There are a total of 30 “general markets” in Pyongyang Direct-Administered City, known as the “capital of the revolution.” The largest of these is Unification Street Market, in the Rangrang District, which is larger than Dongdaemun Market in Seoul.

The largest wholesale clothing markets in North Korea are Okjon Market in Pyongsong, South Pyongan Province and, once again, Sunam Market in Chongjin. Okjon Market is the largest producer of clothing in North Korea. Just as home-based factories are clustered around Dongdaemun and Namdaemun markets in Seoul, the neighborhood around Okjon Market functions as a production base for clothing. According to North Korean defectors, more than 100,000 people congregate at Okjon Market every day.

Recently, Okjon Market’s dominant status has been challenged by Sunam Market. This shift began several years ago, when North Korea’s emergent entrepreneurial class – known as donju, meaning “money masters” – brought in pricey clothing production equipment from Japan.

All three of these markets are legal. North Korea’s jangmadang (markets) were black markets until 2003, when the North Korean government legalized them under the name “general market” through cabinet decision No. 27 and cabinet guideline No. 24. They’re called “general markets” because there are practically no limitations on the kind of products they can carry, in contrast with farmers’ markets, held once every ten days, which can only carry farm produce.

Pyongyang’s major general markets

The jangmadang date back to the 1990s, when North Korea’s rationing system collapsed, precipitating a deadly famine euphemistically referred to as the “arduous march.” These black markets were set up by resourceful citizens and quickly spread across the country.

Since the North Korean government doesn’t release figures on the number of general markets, it’s impossible to know for certain how many there are at present.

In Dec. 2016, the Korea Institute for National Unification (KINU) announced that there were at least 404 general markets, based on analysts’ cross-referencing of satellite imagery and defector testimony. South Korea’s National Intelligence Service (NIS) estimates that there are 439, according to testimony before the National Assembly’s Intelligence Committee on Feb. 27, 2017. It’s widely estimated that the current number of general markets is around 500. Since there were just 200 in 2010, the number is increasing at a ferocious pace.

What is even more notable than the expansion of the general markets themselves is their distribution of functions and the trend toward specialization.

First, there are the wholesale markets that cover the entire country. Prime examples are Okjon Market in Pyongsong; Namjungdong Market (formerly Chaeha Market) in Sinuiju, North Pyongan Province; and Sunam Market in Chongjin, which serves as a hub for the entire market network. Located across the river from the Chinese city of Dandong, Sinuiju serves as North Korea’s nexus for trade, distribution and commerce, which makes Namjungdong Market the conduit for Chinese imports entering North Korea’s national distribution network. These imports go to Sunam Market, which is broken down into subsections specializing in product categories such as manufactured goods, meat and fish, used clothing, and general merchandise.

Sunam Market’s advantage is that it’s located in a port city and close to the border of China and Russia. Though Pyongyang is North Korea’s largest “consumer market” and a hub for transportation, travel into and out of the “capital of the revolution” is tightly controlled. That explains how Pyongsong, a city just north of Pyongyang and the home of Okjon Market, established itself as North Korea’s base for wholesale and retail distribution.

Second, there are the markets that serve as hubs for the provincial network of markets. These include Kalma Market and Yuldong Market in Wonsan, Gangwon Province; Hyesan Market in Hyesan, Ryanggang Province; Oeryong Market in Kanggye, Chagang Province; and Sapo Market in Hamhung, South Hamgyong Province. All of these markets are in their respective provincial capitals.

A tendency for market differentiation can also be witnessed inside cities. In Pyongyang, for example, Unification Street Market and Chung District Market mostly deal with high-priced imports, while Songsin Market is the main consumer goods market of daily necessities for Pyongyang residents. Songsin Market owes its status to its accessible location at Songsin Station, the terminus of the tram line in Sadong District in East Pyongyang.

The thrust of the North Korean government’s attitude toward markets has been shifting away from controls and crackdowns to management and exploitation. There has been an evolution from the “controlled model,” in which jangmadang had a fence and a single entrance, through the “managed model,” in which they had a roof and several entrances, to allowing general markets to be set up in buildings in the manner of hypermarkets and department stores.

Even bolder steps have been taken in recent years. Open Air Market, located at a major intersection in the Jurye neighborhood of Pyongsong (also the home of Okjon Market), was legalized without a fence being built. “There’s a market regulation office there, so it’s a general market recognized by the authorities,” one defector said.

An even more dramatic change can be seen at Kumsa Market in Hamhung. This market went up immediately next to the Hamhung Grand Theatre, the largest theater in North Korea. This is in the heart of Hamhung, the site of powerful institutions such as the provincial party office as well as revolutionary landmarks including bronze statues of Kim Il-sung and Kim Jong-il.

“Locating a market here in the past would have been unimaginable, and it shows how the North Korean state’s policies about markets are changing. It means that the state no longer regards markets as shameful places that it’s forced to put up with,” said Hong Min, director of KINU’s North Korea research office.

As of 2016, KINU estimated that there are 1.1 million merchants at the general markets, assuming one merchant for each of the 1,092,992 stalls. Considering that the average North Korean household consists of four people (according to the 2008 census), around 4.4 million people, or 18% of North Korea’s total population of 25 million (Statistics Korea, 2017), basically rely on the general markets. The number would be much higher if it included the people who work at unsanctioned “grasshopper markets” (black markets) located on the fringe of general markets, in back alleys and on the side of the road. As KINU puts it, markets are the “capillaries of the North Korean economy.”

Markets (and marketization) “make a decisive contribution to maintaining the people’s livelihood while also expanding government revenue” by enabling North Koreans to “create cash income” and by “supplying goods, such as food and necessities, and services,” KINU continues.

That’s why Yang Mun-su, a professor at the University of North Korean Studies and an expert on the North Korean economy, regards North Korea’s marketization as having already become “irreversible.”

By Lee Je-hun, senior staff writer

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