by Christopher Green

Christopher Green is Manager of International Affairs for Daily NK and writer of Destination Pyongyang, based in Seoul.

Propaganda is only useful to a certain extent. For one thing –as the people of North Korea have long been aware and as their brethren in the Ukraine and China also became aware long before them — it is not possible to eat propaganda.

Therefore, while Rodong Shinmun remains full of stories about things like: (a) how people braving the sub-zero conditions in Pyongyang to attend the memorial service for Kim Jong Il on December 28^th laid their outerwear on the tarmac in order to ensure that snow would not be allowed to gather in the path of the hearse; (b) how the “South Chosun” (e.g., South Korean) government will never again be dealt with owing to its anti-nationalist response to the DPRK’s call for the unfettered right of South Koreans to mourn at the wake of Kim Jong Il in Pyongyang; and (c) how imperative it is to study with diligence the contents of the Joint New Year’s Editorial[1] (and it really is full to the proverbial brim with exactly these things, though the whys of all three fall outside today’s remit), it is, nevertheless, the illogically high price of rice and other daily necessities that will be consuming the available thinking time of the average provincial North Korean going into 2012.

Given that this simple fact – the price of rice — has by far the greatest potential to cause unrest in modern North Korea, it is advisable for outsiders to prioritize the same. By all means, read Rodong Shinmun if able, but after that, time might be better spent thinking about this: how can it be that, in spite of all the verbiage, the state continues to deny the North Korean people rations, rice remains prohibitively expensive at cost 4,000-5,000 North Korean won per kilo, and the Chinese Yuan is trading for up to 1,000 North Korean won in some areas?

Can it really be the case that, in such an environment, nobody appears to be starving?

Data and Image courtesy Marcus Noland

Some analysts, fortunately, are already thinking about it. Here’s Joo Seong Ha of North Korea Real Talk;

The price of rice in North Korea is not cheap even compared to South Korea’s rice price. Unless it comes from an expensive brand, the price of rice in South Korea is under $2 per kilo. In other words, North Korean rice price is around half of South Korean rice price. Considering the huge disparity between the incomes of North and South Korea, the fact that North Koreans buy rice at this price is astonishing.

Joo believes that the risk exists that these prices portend famine. But whether or not he is correct, his concerns remain rooted more in the fact that he cannot assimilate the situation in any other way, given the evidence available, than in proof of encroaching devastation.

He continues:

 In the spring of 1995, in Pyongyang, I saw the rice price going from 50 won per kilo to 200 won per kilo in just two or three months. And then two or three months later, mass starvation deaths began to occur everywhere in North Korea, and the regime declared the March of Struggle. But it is the fall right now, when rice just finished getting harvested — and the price is already rising. I would rest a little easier if someone could explain to me that this is not a repeat of 1995.

Despite the lack of absolute proof, Mr. Joo’s worries seem on the prima facie evidence available to be valid: 4,000-5,000 North Korean won per kilo is not a sustainable price for people earning around 5,000 North Korean won per month, after all, and history does provide a fearful precedent indeed.

But, we would be wise to ask: is there an alternative explanation?

First and most obviously, a proportion of those people with access to the market do clearly earn well above the average national income. Even with rice and other necessities at more sensible (i.e. lower) prices, market traders with their wits about them can make money. As such, given that most enterprises and families do operate in the market to some degree, state wage levels are something of a red herring to begin with.

However, I actually wonder whether Mr. Joo and others are concerned about famine not because they are wrong about income levels, but because they are looking at the wrong signals. In other words, I wonder whether the Yuan has become so overwhelmingly ubiquitous that we can legitimately claim that North Korea has become the first ever ‘Yuanized’ state. Such a development would account for the fact that the price of rice denominated in North Korean Won is becoming entirely irrelevant on-the-ground because the buyers buy and the sellers sell in Chinese Yuan and, therefore, almost nobody is prepared to keep their savings in domestic currency.

Even if I were over-stating the Yuanization case here, it would still be true that while it may suit news outlets in South Korea and beyond to devote column inches to the skyrocketing price of rice in North Korea, if in fact relatively few people were actually operating in the local currency, then it would be irrelevant to the wider debate.

However, that would not be all that much cause for celebration, either, for the following reason: If the DPRK government keeps forcing people in those parts of the economy it still does control to operate on North Korean Won-denominated wages, with limited recourse to the market (meaning the military-industrial complex and parts of the military itself, primarily), then there may well be a great deal of hunger, and plausibly starvation, going forward. Similarly, problems could arise if there were severe regional differentials between currencies. That is to say, certain internal areas could be stuck using the North Korean Won while others held Yuan. While this concern is, by definition, difficult to verify it would come as no comfort whatsoever to the ”vulnerable people who have no access to the market” in areas Yuanized or not, or those charged with providing aid to those and other destitute people.

For these reasons, even if we embrace the above hypothesis, we still have an obligation to keep a watchful eye on the rising cost of daily necessities and falling value of the North Korean Won.

延边州公安局 Yanbian Autonomous Region Public Security Bureau, Yanji City west side, near the airport, not far, in fact, from where I was almost abducted this summer by some guys claiming to be "xinjiang terrorists"

On this website, I asserted here that I had found information pertaining to a manhunt for someone who was likely to be the North Korean defector-turned South Korean citizen who was Robert Park’s contact in Yanji city.  In the comments section of this post on Robert Park’s portrayal in the Chinese press, one suggested that this December police report from Yanji might provide a few clues about manhunts in Yanbian after the Robert Park walk across the Tumen River.

Well, I translate it below, and, while it certainly doesn’t refute my earlier assertion, it does tell you why a bunch of cops were up all night on Christmas Eve in Yanji and why Public Security was a bit on edge when he went over the border.

It also gives a nice sense of the sometimes-tenuous status of the drive to establish a through-going “rule of law” on the Chinese frontier, particularly in an area probably awash in various currencies (particularly RMB and USD) counterfeited by the North Koreans across the border.

Or, if you prefer, the story functions as a powerful reminder that certain George Clooney movies about heists in Las Vegas can be used as inspiration in some very different cultural contexts indeed.  But that’s much ado about nothing: here, in short order, is the story on the “12.16 Incident”:

Yanbian Automomous Region Public Security Bureau, “Yanji Police Successfully Route Out the Case of the Great ‘December 16′ Theft [延吉警方成功侦破“12.16”特大抢夺案],” 28 December 2009, URL (full text in Chinese).

[Translation and headers by Adam Cathcart]

At 10:15 on December 16, 2009, Yanji City Public Security Bureau received a report. It stated that in an office (room 1206) at the “New Century Mansion,” in the process of exchanging American dollars for Chinese yuan, a man robbed three victims of 140,000 yuan and then escaped.

On December 25, the Yanji Public Security Bureau held a news conference, giving a report the previous seven days’ progress on the investigation. They stated that three suspects had been netted in Hegang city [鹤岗市] in Heilongjiang province, and that the three guilty suspects had been arrested and brought back to Yanji on the night of December 24.

After the outbreak of this incident, Yanji City Public Security Bureau attached great importance to quick movement, immediately establishing Kim Kyung-il [Jin Jingri / 金京日] as commander, Jin Huzhe [金虎哲] as vice-commander, and setting up a brigade of “12.16” investigative command.

Physical descriptions and drawings of the suspects were obtained through the testimony of the victim of the 12.16 crime, and spread through the media, including the notice of a reward. An expansive effort followed, including retrieval of surveillance videos [监控录像], and visits took place all over the city, thoroughly checking rental housing, hotels, and bath houses, and so on. On December 20, police had in their hands some very valuable clues.

According to the impressions of two hotel owners on Jinxue [“Improved Study” 进学街Street], suspects had stayed in their hotels, but had gone to other hotels to do their business. According to these clues, the investigative headquarters determined the three biggest suspects of the “12.16” case, surnamed Yang, Zou, and Zhu.

Through investigation, police made progress through gathering of further detailed information about suspect Yang, integrating analysis and information to find that Mr. Yang may have fled to Hegang City in Heilongjiang Province.

As a result, police officers rushed to the headquarters and immediately organized a team of cadre to go to Hegang in Heilongjiang. On December 23, with the vigorous assistance of Hegang City Public Security Bureau, the three big suspected thieves, Mr. Zou, Mr. Zhu, and Mr. Yang were captured at the “Oriental Hotel” [东方宾馆], where investigators confiscated 63,901 U.S. dollars, 30,400 Chinese yuan, and 360 Hong Kong yuan.

On the evening of December 24, the suspects were escorted back to Yanji.

The Perps: Hatching Plans in the Lhasa Lockup

After the return to Yanji, the local Public Security Bureau spent the night doing an in-depth and detailed review: criminal suspect Mr. Zou was found to be of Han nationality, born in 1962, with a residence [户口所 hukou suo] in Nanchong City [南充市], Sichuan Province. In July 2000, Mr. Zou had been in Tibet, and, due to fraudulent resale of American dollars, had been sentenced to imprisonment for 12 years. He was released in May 2007.

Criminal suspect Mr. Yang was found to be an ethnic Korean born in 1969 with a household registration in Hegang City, Heilongjiang Province. He was determined to be a temporary resident [暂住] of Yanji City.

Suspect Mr. Zhu was found to be of Han nationality, born in 1964, with a household registration Hegang City, Heilongjiang Province. In July 1999, due to theft, he had been sentenced to imprisonment 12 years. He was released from prison in March 2006.

Within this group, Mr. Yang and Mr. Zhu were from the same hometown [同乡], and had been in close contact since 2005. As for Mr. Zou and Mr. Zhu, they had been fellow inmates in the same prison in Lhasa, and, since the two of them had been released, often kept in touch.

Early in December 2009, the three men consulted in Yanji City, determining how they would rob U.S. dollars from a person engaged in foreign exchange, and got money used to carry out the crime from Mr. Yang.

After this premeditation [预谋后], Mr. Zou selected the targets. He thereafter did five separate exchanges of U.S. dollar transactions with the victims – the biggest amount being 50,000 U.S. dollars — to gain the trust of the victims and relax their vigilance [放松了警惕].

Then, based on the information provided by Mr. Yang, Mr. Zou went to “New Century Mansion” and rented room 1206 to use as an office. Together with Mr. Zhu, they renovated the room [装修], separating it out and adding security doors fitted to prepare for committing crimes.

The morning of December 16, Mr. Zou tasked Mr. Zhu with tracking the victims, surveilling the corridor outside room 1206, and telling Mr. Yang to get good vehicle from his previous employer to wait at the back door of the “New Century Mansion.” Then, the three victims arrived inside room 1206 for the exchange. They gave Mr. Zou 140,000 U.S. dollars. Mr. Zou then went into the previously prepared room, locked the doors, and escaped.

After perpetrating this act, the three suspects then took the three suspects got in the car and fled to Changchun, eventually going to Hegang City, Heilongjiang Province.

According to the understanding of the investigation, in Hegang city, Mr. Zou lay claim to about 60,000 U.S. dollars of the spoils, and then divided the remaining 80,000 U.S. dollars equally, giving each person a share of 26,700 U.S. dollars. Mr. Zou’s possession of 60,000 U.S. dollars are being traced, and the case is under further investigation.

The public security organs to remind the masses: unauthorized reselling of U.S. dollars and other valuable securities is against the law, exchange foreign currency to go through the normal channels of exchange of financial institutions; and, if there is a cash transaction, we must ensure safe and reliable behavior. To the greatest extent possible [尽量], use financial institutions to conduct banking transactions. As the year reaches a coda, the masses should strengthen their own precautions: Do not give criminals any opportunity to even sit down, and, if illegal violations occur, report them immediately to the police for assistance.

Perps in the "12-16" Incident in Yanji, PRC -- photo by Li Yun

A Few Closing Thoughts

Can you imagine, by the way, what similar police reports look like across the border in North Korea?  If Good Friends reports make for bracing reading, one can only imagine what the cops are saying and seeing.   You can bet that the reports near Hyeryong, where Park walked across the Tumen River, are probably digitized, but we’re maybe decades away from the notion of even the most limited public transparency for security organizations taking hold in the DPRK.  (中国的开放社会加油！) I’ve had the unsettling pleasure of reading North Korean police reports from the 1945-1950 period, thanks to the fact that U.S. Marines plundered the DPRK’s archives from that period and stuck them in the vault in Maryland, now site of scholarly sojurns until we normalize relations and hand the records back according to international law.  In the meantime, I’m for one glad that we can use Chinese websites to get a bit closer to what is happening on that vibrant side of the North Korean frontier.

Preferred Citation:  Adam Cathcart “Crimes and Misdemeanors in Yanji,” Sinologistical Violoncellist blog, 8 February 2010, URL.

or,

Yanbian Automomous Region Public Security Bureau, “Yanji Police Successfully Route Out the Case of the Great ‘December 16′ Theft [延吉警方成功侦破“12.16”特大抢夺案],” 28 December 2009, URL (full text in Chinese), translated by Adam Cathcart in “Crimes and Misdemeanors in Yanji,” Sinologistical Violoncellist blog, 8 February 2010, URL.

Not only does the appearance of this news further reinforcing that China is displeased, it indicates that Xinhua isn’t above quoting from sources like Open Radio North Korea when the need arises.  (Radio Free Asia has an excellent report on the currency issue here, but the Open Radio North Korea can be seen here in Korean and here in English.)

As to the story regarding executions for illegal currency trading, this is, again, a serious departure in Chinese coverage on North Korea.  And as such, Chinese readers may be raising their eyebrows.  So let’s move to the netizen comments on the piece:

“Good and ruthless, such backward economic practices are just waiting for everyone’s support /  好狠，搞得经济这么落后就等着大家支援。

“Right, if you don’t support them economically, they will scream that they have to develop nuclear weapons /  是的，你们不经济支援他就叫嚣要发展核武器。

“The North Korean government isn’t wrong here; they can still wipe out the wealth disparity!  / 朝鲜政府不错这样还真能消除贫富差距!”

“This is South Korean media…how much can we trust it? / 韩国媒体的话。。有多少能信？”

“North Korea and South Korea are one thing: totally anomalous.  / 朝鲜跟韩国一个样，都变态。”

“If China had this kind of legal power, there wouldn’t be any greedy officials or greedy merchants left!  如果中国有这执法力度,贪官贪商早就没有了!”

“Is this also news?  Also hearsay?  Also rumor, also truth?  Is it or isn’t it?  新闻也？道听途说也？谣也事也？是也非也？

“Valiant / 强悍啊 [qiáng hàn]“

“Barbarous country / 野蛮 [yě mán]国家 “

“I estimate that it is a rumor created by a South Korean. / 估计是韩国人造的谣。”

“After the revaluation, wealthy people will have no way to live, their bitterly gained wealth will wearily be given to the poor people, and those on top will become poor simultaneously; it’s lamentable in many ways.  /  被平均后富人又得白手起家了，幸幸苦苦积累的财富要平均给穷人，一下子就和穷人同一档次，是多么可悲。”

“How can South Korean people’s media be trusted? / 韩国人的媒体怎么才能相信？”

[Several comments deleted by board administrator; calls for "civilized posting."]

“Barbarous country / 野蛮 [yě mán]国家 ” [again]

“This incident is truly frightening. / 这个事情真可怕”

“Kingly way, happy and safe land.  [Irony alert!]  / 王道乐土“

“South Korean idiots can’t be believed!  It’s blather!  韩棒子不可信！胡扯 [hú chě]！”

“Yes, we believe Chinese Central Television. / 我们还是相信cctv啊”

“How can this be?  How can this be?  How can this be? This is impossible!  This is truly impossible! /  怎么可能？怎么可能呢？怎么可能哪！不可能！绝对不可能！”

There’s a lot to analyze amid these comments, but chief among them might be the inherent societal support for North Korean capitalists and capitalism.  I don’t think this is some mirage, as the Chinese speak from experience.  And I would interpret the final comment as an expression of outrage against North Korea rather than an expression of indignance against South Korean rumors, although it can be read both ways.

It is further interesting that China is less and less interested in protecting North Korea’s media flank.  For instance, China kept its Chen Zhili [陈至立] coverage fairly low-key (visits to Chinese war memorials in Pyongyang, etc.), while allowing the currency story to instead dominate the North Korea news narrative in the week before Envoy Bosworth’s arrival in Pyongyang.

Chinese businessmen are having a very hard time working in North Korea presently and assert that moving between Sinuiju and Pyongyang is almost impossible.  That’s a pity, because the Sinuiju-Pyongyang rail corridor has some of the best, most carefully-tended agriculture in the entire DPRK, as the Good Friends organization reports. At the same time, an under-reported story has been the increasing North Korean restrictions on Chinese cell phone usage by Chinese traders in the border areas.

Ironically, the currency reforms have increased the power of Chinese in the border areas of North Hamgyong province, according to Open Radio North Korea:

On December 2, a source in Musan reported that there are no limits on the amount of money Chinese can exchange for North Korean currency. Especially near the border area, there are more private travelers from China than in Pyongyang or other cities which are not near the border. These travelers possess a large amount of North Korean notes in order to purchase North Korean souvenirs and to travel within North Korea. North Korea authority allow them currency exchange without limit since they are foreigners.

Two issues arise from this:

First, there are increasing numbers of North Koreans who try to exchange their old bills for new ones through Chinese since Chinese can always exchange their old bills.

Second, the exchange rate near the border areas is better than that in Pyongyang. Since exchanging money is much easier for the Chinese, the value of old bills relative to US dollars decreases in border areas, by smaller increments than in Pyongyang. In fact, compared to the exchange rate of 1:6000 in Pyongyang on December 2nd, the exchange rates in Sinuiju and Musan were 1:5000 and 1:4500 respectively.