North Korea tells businessmen to schmooze with South Korean counterparts

2015-02-11

Businesspeople cross a border checkpoint in Paju, South Korea, as they head back to work in the North's Kaesong Industrial Complex, Sept. 16, 2013. AFP

North Koreans who do business in China are leery of a new order from their country's diplomatic mission in China, ordering them to rub elbows with their counterparts from South Korea, but do it cautiously, businessmen familiar with the new policy said.

The policy marks a shift in the attitude of North Korea toward the businessmen of South Korea, the North's far richer and more populous rival, they say.

"If you meet South Korean businessmen, you don't have to avoid them," North Korean authorities are said to have told businessmen via the country's diplomatic mission in China. "Roll with the punches, but do not get too close to them."

One Chinese businessman who does business with North Koreans who work in China told RFA's Korean Service that the order meant North Koreans should "trade actively with South Koreans" whenever good business opportunities arose.

"Many trade workers in China have traded with South Koreans both directly and indirectly," he said. Often Chinese merchants play the role of middleman in inter-Korean transactions.

North Korean authorities are aware that despite the middleman arrangement, some North Korean businessmen have secret, direct contact with their South Korean counterparts, sources said.

But the authorities have acquiesced to the direct contacts because of the money that North-South deals generate, they said.

North Korea is desperate for foreign currency, which plays a major role in propping up a faltering command economy that faces trade sanctions with many western countries and Japan over Pyongyang's nuclear weapons program.

"North Korean authorities had overlooked this situation, and now they allow it officially," the Chinese businessman said.

Direct contact

Another Chinese businessman who works with North Koreans in China said South Korean companies accounted for more than half of the orders for garments from a Chinese company, which has the clothes manufactured in North Korea.

Authorities know the orders come from South Korea – their Cold War archenemy – but overlook this fact because of the income they generate for North Korea's processing companies, which provide manufacturing services to other enterprises in return for volume-based fees.

"No one called it into question because China is the middleman in the business," he said.

But now North Korean authorities are openly encouraging the country's businessmen in China to contact their South Korean counterparts directly to boost sales, sources said.

"North Korea is trying to promote receiving more orders from South Korean companies by issuing this instruction," the second Chinese businessman said.

However, North Korean businessmen in China are hesitant to follow the order because in the past those who forged close contacts with their South Korean counterparts were purged.

Because North Korean businessmen understand the implications of the order, none of them would likely reveal whether they have had any close contact with South Koreans, sources said.

Reported by Joon Ho Kim for RFA's Korean Service. Translated by Hanna Lee. Written in English by Roseanne Gerin.

Link to original story on RFA website