North Korea has reinforced customs checks on shipments of mining products to China since the stunning execution of the once-powerful uncle of leader Kim Jong-un last December, confounding cross-border traders and halting investment into the North's special economic zones, data and two sources familiar with the matter said Friday.
North Korea executed Jang Song-thaek, the uncle and the right-hand man to Kim, as a traitor. The death of Jang, who had close relations with the Chinese leadership by playing a key role in attracting Chinese investors for the North's economic projects, raised heightened doubts about short-term economic ties between the two nations.
South Korea's spy agency believes that the demise of Jang stemmed from a power struggle over the control of lucrative coal-related state businesses. Coal is the North's No. 1 export item to China.
"In January and February this year, North Korea significantly stepped up checks on its coal exports to China," a source in Beijing said on the condition of anonymity.
"Such reinforced checks appear to be related to the execution of Jang Song-thaek," the source said.
According to the latest data by the Korea International Trade Association in Seoul, North Korea's exports of coal to China in February fell 26 percent from a month ago to 920,000 tons. The North's exports of iron ore to China also fell 23 percent in February from a month earlier to 197,000 tons.
The North's total trade with China in February plunged 46 percent from a month earlier to US$255 million, the data showed.
In Dandong, the Chinese border city with North Korea where about 80 percent of bilateral trade is conducted, the flow of goods in and out of North Korea appears to be affected by the execution of Jang.
"In previous years, the North Korean authorities had usually set their annual targets for exports and imports, and given quotas to trading firms," said another source in Dandong who is doing businesses with North Korea. "But, no quota has been given yet this year.
"Obviously, the mood is different than previous years," the source said.
No progress has been made on special economic zones, including Hwanggumphyong and Wihwa, set up by the North on the border with China, according to the source.
"Under the current circumstances, Chinese investors will not invest in the North's special economic zones," the source said