Chinese entrepreneurs look to profit from North Korean debts
Staff Reporter 2013-07-18 08:45
A public gathering at Kim Il-sung Square in Pyongyang. (Photo/Xinhua)
After years of poor economic growth under foreign economic sanctions, North Korea is struggling to pay back its debts, creating an opportunity for Chinese entrepreneurs to work as debt collectors in Pyongyang, reports the Global Times, a tabloid under the auspices of the Communist Party mouthpiece People's Daily.
Most of the debt collectors are descendants of Korean immigrants to China, who took advantage of their language skills to become traders after the border with North Korea was open to trade in the 1990s. However, now that many North Korean companies are incapable of paying debts, these traders are now working across the border to collect debts.
Li Hai (pseudonym), vice president of a trading company in Dandong, a city in northeast China close to the border with North Korea, said she has gone to Pyongyang more than 10 times to try and collect US$1 million owed to her company. She said that the company has business with more than 20 Korean companies and allows them to take the goods first and then pay later. However, the risks involved have been rising, with some of the North Korean companies saying they have closed or are under new leadership and unable to pay off the debts, Li said.
Li said that debt collectors typically stay in Pyongyang for several months at a time and wait outside the State Administrative Council to intercept officials at the entrance. She said that on one of her trips, a man came to her hotel to give her US$15,000 and sent her back to the border. Meanwhile, one of Li's friends stayed in North Korea, spending more than US$10,000 on hotel and meal expenses but was sent back to China after collecting less than US$5,000 of the debts, Li said.
Despite the uncertainty of trading with North Korea, there are still more than 1,000 trading companies in Dandong. "Many people mention the huge risks in trading with North Korea but let's think it this way: the greater the risks are, the bigger profits we can get," said a car salesman surnamed Wei.
