Contract manufacturing accounts for such a large share of North Korea’s official trade with China that wigs and false eyelashes are its top exports. But North Korean trading companies have recently been losing credibility with Chinese manufacturers because of delayed deliveries and communication blackouts.
A source in China told Daily NK recently that a North Korean trading company working in contract manufacturing (processing raw materials from China and returning the finished goods) cut off contact with its Chinese client after missing a delivery deadline in early January.
Since nearly a month has passed without any word from the North Korean trading company that was supposed to supply the finished goods, the Chinese businessperson assumes the North Koreans sold the products themselves and pocketed the profits.
The Chinese businessperson reportedly lost 100,000 yuan (roughly $13,800) in the process.
“There have been a number of incidents in which North Koreans have supplied poor-quality products, failed to meet delivery deadlines, or sold off the final goods instead of delivering them,” the source said.
In mid-January, a small North Korean trading company that had been importing Chinese electronic components and then shipping the assembled products back to China reportedly ghosted a Chinese businessperson without supplying the promised goods.
In an attempt to reestablish contact with the trading company, the Chinese businessperson reported the incident to a North Korean state security office and asked for the trading company managers to be prosecuted, but there has been little progress on the investigation.
Reports to state security yield no results
Chinese businesspeople have reported incidents of this sort to North Korea’s state security agents before, but their reports have never led to prosecution or meaningful remedies.
Instead of supplying finished goods to their Chinese clients, some North Korean trading companies are selling them to other businesspeople in China or elsewhere and keeping the proceeds for themselves. In that way, North Korean trading companies can reportedly triple their profits on each transaction, the source said.
These North Korean trading companies are so desperate for short-term gains that they are willing to rip off their Chinese business partners despite knowing that they are destroying trust and burning bridges.
These trading companies’ dishonest dealings are likely to undermine civilian commerce between North Korea and China.
Such behavior reinforces the impression among Chinese businesspeople that the only reliable trading partners in North Korea are large trading companies affiliated with the government and that it is unwise to rush into a contract without a trusting relationship based on several years of business together.
Some Chinese businesspeople have sworn off doing business with North Korea altogether and are currently recruiting companies willing to do contract manufacturing in Southeast Asia.
“Many small trading companies in North Korea have a Wild West approach to commerce with no regard for the laws or regulations. So Chinese businesspeople keep getting cheated, but the North Korean government doesn’t intervene. The result is that trust in North Korea is plummeting among Chinese traders,” the source said.
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Daily NK operates networks of sources inside North Korea who document events in real-time and transmit information through secure channels. Unlike reporting based on state media, satellite imagery, or defector accounts from years past, our journalism comes directly from people currently living under the regime.
We verify reports through multiple independent sources and cross-reference details before publication. Our sources remain anonymous because contact with foreign media is treated as a capital offense in North Korea—discovery means imprisonment or execution.
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: dailynk.com
