N. Korea seeks boost in tourism after total trade halved due to sanctions

The total value of North Korean trade worldwide in 2018 was nearly halved from the previous year due to tough enforcement of international sanctions, but the economy of one of the most seclusive countries has stayed more stable than expected partly thanks to a rise in Chinese tourists and investment.

According to data released by South Korea’s Statistics Korea on Friday, North Korea’s total trade value in 2018 reached $2.84 billion, a plunge from $5.55 billion in 2017 when the United Nations Security Council imposed toughest sanctions against the communist country following its nuclear and missile tests, violations to U.N. resolutions. North Korea’s exports plunged 86.3 percent on year to a historic low of $243 million as its exports to its biggest export destination China plummeted following the international sanctions.

Over the same period, South Korea’s total global trade value hit $1.14 trillion.

Despite the fall in the total value of trade, the North Korean economy has been showing signs of relative stability with its foreign exchange rate and the price of rice staying stable since last year. The country’s aggressive move to attract foreign tourists, mostly Chinese visitors, is partly owed to the relatively stable economic conditions.

To earn hard currency following the international sanctions, the North Korean regime has shifted its focus to tourism. It has aggressively built special tourist zones to attract foreign tourists under the direction of its leader Kim Jong-un.

The number of Chinese tourists to North Korea, in particular, is estimated to have surged recently despite the decline in bilateral trade. Many tour agencies in Dandong, China, which is close to Sinuiju in North Korea, offer various behind-the-door tourism packages to the North, sources said.

An unnamed official from tourism industry in Dandong said a Chinese tourist can receive a pass for 300 yuan ($43), which guarantees a day trip to Sinuiju. Travelers are able to visit North Korea without a visa but a travel pass. A two-day trip costs 880 yuan and a six-day trip 4,300 yuan which involves journey from Dandong to Sinuiju as well as Pyongyang, Kaesong, Wonsan, and Mount Kumgang.

Foreign media, quoting North Korean tourism authority, have reported that Chinese tourists accounted for 90 percent of 200,000 foreign tourists in North Korea last year.

[Photo by Yonhap]

Some North Korean experts in South Korea even estimated that the number of Chinese tourists visiting North Korea has already surpassed 1 million this year after North Korean flag carrier Air Koryo launched two weekly flights from Dalian, China. Air Koryo already operates flights from Beijing, Shanghai, and Shenyang.

Industry insiders noted that the increase in the number of Chinese tourists in North Korea is leading to a growth in overall foreign investment in North Korea.

North Korea has been actively seeking to invite foreign investment to the special tourist zones in Wonsan and Mount Kumgang. The country promotes that investment in an international food zone in an international tourist spot in Wonsan can guarantee a 28.4 percent internal rate of return.

Thanks to the country’s aggressive move to invite visitors and investment from China, the trade between North Korea and China showed signs of recovery this year. According to data released by Institute for National Security Strategy under National Intelligence Service on Friday, trade volume between North Korea and China in the first 10 months of the year reached $2.24 billion, up 15.8 percent from the same period a year ago.

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