Chinese firms suffer from NK sanctions
Imports returned in compliance with UN resolution
“Sanctions on North Korean seafood will greatly hurt the country’s seafood exporting business, as most of North Korea’s seafood exports target the Chinese market.” Lü Chao, Researcher with the Liaoning Academy of Social Sciences
Businesses in China are facing losses after the Chinese government banned imports of seafood, coal and iron ore as well as workers from North Korea as part of sanctions passed by the United Nations Security Council in response to North Korea’s ballistic missile program, business owners and experts said on Thursday.
Local officials in Hunchun, a city in Northeast China’s Jilin Province bordering North Korea, are currently negotiating with North Korean authorities to send trucks headed to China carrying seafood back to North Korea.
“The seafood that can’t enter China is ready to be gradually shipped back to North Korea,” an official from the entry- exit inspection and quarantine bureau in Hunchun told the Global Times on Thursday.
The trucks carrying seafood from North Korea to China were stuck on the bridge between China’s Quanhe customs port and North Korea’s Wonjong customs port, according to a Chinese trader, who runs a WeChat account called Dali Shijiao in Hunchun.
The trader told the Global Times that the trucks passed through North Korea’s port on Tuesday morning, but by then, China’s Quanhe port had stopped customs clearance services for seafood trucks from North Korea.
“We have passed North Korea’s customs, so if we ship the seafood back to North Korea, we need to declare for imports. We have not handled the relevant procedures [ yet],” the trader said.
According to the trader, the hot weather has caused some frozen seafood to defrost and drip water through cracks in the trucks.
China’s Ministry of Commerce on Monday announced the decision to ban imports of coal, iron ore, lead and seafood from North Korea starting from Wednesday.
China’s decision is based on the new sanctions passed on August 5 by the United Nations Security Council, which not only banned North Korean exports of a number of products, but also prohibited North Korean laborers from working abroad as well as disallowing countries from setting up new joint ventures with North Korea. The sanctions act as punishment for North Korea’s two intercontinental ballistic missile tests in July.
The new sanctions will “slash by a third” North Korea’s annual export revenue, Reuters reported on August 6.
Lü Chao, a researcher with the Liaoning Academy of Social Sciences, said that the sanctions wouldn’t have too much impact on China’s economy in general, but of course, some Chinese traders with North Korea will bear some losses.
China has already halted imports of North Korean coal earlier this year, and a large amount of coal imported from North Korea was also shipped back to the country, media reports said.
The official from Hunchun said he was not sure whether North Korean companies or institutions can compensate for the loss stemmed from returning the products.
Big impact on North Korea
Lü said that the Chinese government should help minimize the losses for Chinese traders, by efforts such as hastening the speed of notifying them of policy changes, he told the Global Times on Thursday.
China’s imports from North Korea slumped by 13.2 percent year- on- year to $ 880 million in the first half of 2017, customs data showed on July 13.
According to Lü, sanctions from China as well as from other countries on North Korea will have a relatively big impact on North Korea’s economy.
“China’s sanctions on North Korean seafood will greatly hurt the country’s seafood exporting business, as most of North Korea’s seafood exports target the Chinese market. But in a bigger sense, sanctions on North Korea’s coal exports are more damaging for the country as coal accounts for the majority of North Korea’s exports,” Lü said.
Lü said North Korea can still seek other ways of earning foreign currency.
“But their channels for generating foreign currency are already very limited. With a slump in the export, their foreign currency reserves will be rather inadequate,” he noted.
According to Lü, North Korea needs foreign currency to get overseas products, some of which the country is very reliant upon. “For example, they rely on imports of pesticide from China in their agricultural sector. They also import things like cars, construction materials and industrial machinery from China,” Lü said.