On the Ground in North Korea

Everyone, especially in the media, was fascinated to see North Korean dictator Kim Jong-un’s sister, and propaganda minister, at the recent Winter Olympics in South Korea. The media pronounced her a superstar, because the American media never misses an opportunity to support despotism and tyranny.

As for whether the North Korean participation in the Olympic games represented a thaw in relations between the nations, time will tell us. For now the Trump administration, through the United Nations, has punished the Kim regime with extensive economic sanctions.

Of course, experts fill the television screens with their prattle about how the sanctions will never work, because China will never let them work. Besides, they know, better than anyone else, that the seeming good relationship between President Trump and President Xi is more show than substance.

For those among many other reasons, we note with considerable interest a story on the front page of today’s Wall Street Journal. It is surely less compelling than the story of Hope Hicks and White House infighting, but still, those of us who prefer the facts to the drama should take note of the simple fact: sanctions against North Korea are biting. And China, without making any great public display— which would not be very Chinese— is participating actively. For years we have been complaining about China's failure to help control the situation in North Korea. Now that it has, we will see how many news outlets and experts come forth to acknowledge the fact.

The story opens, thusly:

Six months ago, the Quanhe checkpoint on China’s border with North Korea was a hive of activity and a vital conduit for trade helping Pyongyang finance its nuclear-weapons program.

Hundreds of vehicles queued up on the Chinese side each morning, bearing food, building materials and consumer goods bound for North Korea, to return later with North Korean exports of seafood, garments and coal.

Not any more. China, long criticized by the U.S. for supporting the North Korean regime, appears to be ramping up enforcement of international sanctions that Washington hopes will force Pyongyang to abandon its nuclear ambitions.

A week-long tour of China’s border regions found that sanctions are hitting local Chinese businesses hard and starting to bite inside North Korea, with factory closures, price rises and power shortages in some areas.

The impact within North Korea is likely to intensify later this year as it runs short of foreign currency, and could trigger an economic crisis by 2019, according to visitors, researchers and foreign officials monitoring the country.

It continues:

On a recent morning, only a dozen people were waiting at the Quanhe checkpoint. One was a Chinese businessman going to check on equipment stuck in his garment factory in the North Korean port of Rason, which he closed in November after China began enforcing a newly adopted United Nations ban on North Korean exports of garments. His plant shutdown snuffed out the jobs of 200 North Korean workers, half of whose pay was going to the Pyongyang government.

On a visit to Rason a few days earlier, the businessman said, prices for goods such as Chinese-made batteries were up at least 50% from last year because recent sanctions prevent new supplies being imported, while prices for North Korean seafood had fallen by half since a U.N. ban on its export last year caused a glut on the local market.

“There were more than a dozen garment factories like ours in Rason, and thousands of people in the seafood industry,” he said. “Now, none of those people have jobs.”

It’s not just China. Nations around the world have expelled North Korean workers, whose salary was an important source of currency for the regime:

The train to Pyongyang now is often filled with North Korean workers heading home, as countries from Poland to the United Arab Emirates enforce sanctions that impose limits on U.N. members employing North Koreans. In Yanji, a Chinese city near the border, many local businesses are sending home North Korean workers when their visas expire, according to people familiar with the matter.

The result is another hit to North Korea’s sources of hard currency.

The Kim regime can survive for a time, but not for a very long time:

North Korea currently isn’t facing any new food shortages, visitors to the isolated country say, and the elite can still access luxury goods. Well-dressed North Koreans were seen in the Chinese city of Dandong in January loading strawberries, grapes and kiwi fruit onto a train bound for the capital.

In the next few months, however, domestic food stocks and foreign currency reserves are expected to run down, say Western officials and foreign experts on North Korea, leaving the country with few ways to pay for imports of either essential goods or luxuries.

Prior to trade sanctions, Mr. Kim, party elites and North Korean businesspeople likely held at least $3 billion of hard currency, estimates Kim Byung-Yeon, an economics professor at Seoul National University. He calculates that Pyongyang has run a trade deficit of around $1.5 billion since March 2017 and that its gross domestic product shrank by around 2% last year. The professor said a more severe contraction seems inevitable this year if North Korea keeps burning through cash reserves.

Credit the Trump administration, and especially United Nations Ambassador Nikki Haley for a job well done. At least, up to now.