Identifier
Created
Classification
Origin
09SHENYANG143
2009-08-14 01:35:00
CONFIDENTIAL
Consulate Shenyang
Cable title:  

PRC-DPRK BORDER: RASON, PUST, PEOPLE-TO-PEOPLE

Tags:  CH ECON KN KS PGOV PREL RS 
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VZCZCXRO2254
PP RUEHCN RUEHGH RUEHVC
DE RUEHSH #0143/01 2260135
ZNY CCCCC ZZH
P 140135Z AUG 09 ZDK
FM AMCONSUL SHENYANG
TO RUEHC/SECSTATE WASHDC PRIORITY 8799
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 0740
RUEAIIA/CIA WASHDC 0203
RHMFISS/COMUSKOREA J2 SEOUL KOR
RUEKJCS/DIA WASHDC 0148
RUCGEVC/JOINT STAFF WASHDC 0108
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC 0163
C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000143 

SIPDIS



DEPARTMENT FOR EAP/K, EAP/CM, INR
MOSCOW PASS TO VLADIVOSTOK

E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION
TAGS: CH ECON KN KS PGOV PREL RS
SUBJECT: PRC-DPRK BORDER: RASON, PUST, PEOPLE-TO-PEOPLE
EXCHANGES

REF: A. 08 SHENYANG 185

B. SHENYANG 90

Classified By: Consul General Stephen B. Wickman. Reasons 1.4(b)/(d).

C O N F I D E N T I A L SECTION 01 OF 03 SHENYANG 000143

SIPDIS



DEPARTMENT FOR EAP/K, EAP/CM, INR
MOSCOW PASS TO VLADIVOSTOK

E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION
TAGS: CH ECON KN KS PGOV PREL RS
SUBJECT: PRC-DPRK BORDER: RASON, PUST, PEOPLE-TO-PEOPLE
EXCHANGES

REF: A. 08 SHENYANG 185

B. SHENYANG 90

Classified By: Consul General Stephen B. Wickman. Reasons 1.4(b)/(d).


1. (C) SUMMARY: Rason is the most open and liberalized place
in North Korea, but minor improvements in relations with
DPRK officials there should not be read as evidence of
further engagement or liberalization, according to two key
NGO contacts. Meanwhile, the Pyongyang University of
Science and Technology (PUST) plans to hold its opening
ceremony on September 17 and PRC-DPRK people-to-people
exchanges seem to be robust. DPRK uneasiness with Americans
continues. END SUMMARY.


2. (U) ConGenOff traveled to the Yanbian Korean Autonomous
Prefecture August 2-9 to meet with contacts to discuss
various economic issues, including ongoing business and
humanitarian projects in North Korea.

RASON: MORE RUSSIANS, MORE PHONES, MORE FREEDOMS?
-------------- --------------

3. (C) On August 5, ConGenOff met with a naturalized Amcit
NGO worker of Korean descent who has been living in Rason
for extended periods since 2008. His organization is
nearing completion on a fertilizer plant in Rason and he
will permanently move with his wife and three children to
Rason as soon as the construction is done.


4. (C) This NGO worker said that Russian residents are very
prominent in Rason and that he frequently sees them around
town (Ref A). He also reported the presence of many Chinese
petty traders, though these people are not resident in
Rason. He said that the Russians are allowed to travel
throughout town without "minders," as are the mostly Han
Chinese petty traders and Sino-Korean aid workers. As an
American, however, our contact said he is constantly
escorted by two guides. He said that the Hong Kong-invested
Casino Hotel (of which reportedly Jackie Chan was a key
investor) has re-opened for guests, though the casino
itself, which drew the ire of Chinese officials, remains
closed.



5. (C) Markets are now restricted to operating for two hours
in the afternoon, from roughly 1730 to 1930. Another Amcit
NGO source cited similar restrictions, saying that the
requirement for everyone to labor outdoors during the day as
part of the 150-Day Battle is what limited the hours to the
evening.


6. (C) All foreigners headed to Rason are required to check
their cell phones with DPRK customs officials, but in a new
development, foreigners in Rason can now use North Korean
cell phones on a network installed by China Telecom.
Outgoing calls are RMB 12 per minute and incoming calls are
RMB 4. However, neither of our NGO contacts were interested
in getting a North Korean cell phone because startup fees,
including the handset and activation, were over USD 1000.


7. (C) A contact of ours who has been involved in Rason for
the better part of this decade is now focusing on developing
a small-scale food processing plant in Rason. He told us
August 8 that his operation is leaner and smaller than that
of the better-known aid missions. His organization used an
initial USD 15000 investment to buy a share in a pre-
existing North Korean brewery. He employs 10 North Korean
employees and three Sino-Korean aid workers to run the
plant, which processes China-sourced soybeans to produce
various soybean products for export to South Korea.


8. (C) Our contact complained about the escalating nature of
fees and favors that the DPRK officials have exacted on his
operation. He said that Rason Port is exclusively served by
North Korean shipping lines, now that previous Chinese
tenants, such as the Yanbian Hyuntong (Xiantong) Trading
Company had been evicted (NOTE: An August 10 Yonhap News
report confirmed this story by reporting that the last
remaining South Korean company that used to ply the Rason-
Busan route decided to close its operations in March 2009
after failing to negotiate customs-free trade rights that it
had enjoyed from 1996 to 2007.) The NGO leader said that he

SHENYANG 00000143 002 OF 003


pays about USD 700 to the DPRK brewery per ton of exported
product and that the new North Korean shipping company asks
for about USD 1300 per ton to ship out to Busan, a couple of
hundred dollars higher than the previous shipper.


9. (C) This NGO leader was most impressed by his perception
of improved religious tolerance on the part of his DPRK
counterparts. During regular visits over the last decade,
he said he would try to mask his pre-meal prayers by simply
bowing his head when dining with North Korean officials.
However, his DPRK host recently called attention to the NGO
leader in front of a large group and asked him if there was
anything he needed to do before eating. The NGO leader then
said a short religious prayer to which the DPRK official
smiled and nodded approvingly. The Amcit says that he
maintains good contacts with these DPRK interlocutors,
meeting with them when they visit Yanbian.


10. (C) Though both NGO workers expressed optimism for
further improvements in the Rason working environment, they
remained skeptical about whether any of these small-scale
openings represented anything more than just what they
appeared to be - token changes to facilitate the working
relationship.

PUST OPENING CEREMONY RESCHEDULED FOR SEPTEMBER 17
-------------- --------------

11. (C) ConGenOff met with Yanbian University of Science and
Technology (YUST) Vice President David Kim on August 3 to
discuss the latest reversals surrounding the opening
ceremony of the Pyongyang University of Science and
Technology (PUST). Similar to the sudden and unexpected
reversals that have characterized this project from the
outset (Ref B),as soon as the DPRK Ministry of Education
and PUST officials had agreed upon August 27 as an opening
date the North Koreans suddenly asked to reschedule for
September 17. Privately, Kim confided that he was relieved
since it allowed his side more time to adequately prepare
for the event (NOTE: Media reports have noted that September
17 is also the last day of the DPRK's ongoing 150-Day
Battle.) Kim confirmed that DPRK Vice Minister of Education
Jeon Geuk-man is the co-operating president of PUST along
with YUST President James Chinkyung Kim. He and his wife
returned to Pyongyang on August 6 for what is intended to be
a permanent sojourn as the onsite PUST program manager.


12. (C) Kim told us the PUST delegation will be required to
enter as a group on September 16 and depart together on
September 18. The group includes several people from the
Western media, including correspondents from the New York
Times, Wall Street Journal, and Los Angeles Times.

PRC-DPRK EXCHANGES CONTINUE, NERVOUSNESS ABOUT AMERICANS
-------------- --------------

13. (U) Local papers continue to highlight exchanges between
China and North Korea during the year of the 60th
anniversary of PRC-DPRK relations. A North Korean soccer
team visited Yanbian for two weeks and played four matches
against local teams. The Chinese central government
authorities upgraded the status of Yanbian's last two
second-tier land ports up to first-tier status, opening them
to people from outside of Yanbian. A North Korean orchestra
will commence a month-long tour throughout China, playing
greatest hits from 1970s North Korean cinema. However, one
report stated that Yanbian to DPRK tourism fell by 50
percent in June, with Beijing- and Tianjin-based tourists
citing H1N1 as a deterrent, while others were hampered by
changes in entry-exit requirements for tourists.


14. (C) A retired Yanbian trade and commercial official told
us on August 3 that the attitude of official North Koreans
on business in Yanji was very relaxed and much less stiff
than just a few years ago. He said that when the North
Korean state was floundering in the first part of this
decade, the DPRK officials tried harder to maintain a gruff
exterior when conducting business. Of late, however, he
said the DPRK officials were less guarded and more willing
to engage at least in small talk.


15. (C) When asked about the attitude of DPRK citizens
towards exchanges with Americans, a Sino-Korean trader said

SHENYANG 00000143 003 OF 003


that no private DPRK businessperson would want to risk being
seen around an American, especially an American official.
As for official North Koreans, the trader said that with the
exception of some people at the DPRK Embassy in Beijing,
nobody was probably high enough in the hierarchy to justify
being seen around Americans. The trader speculated at the
potential line of questioning that a North Korean would
receive: "what did you do to make the foreigner even
consider offering a handshake?" Another Sino-Korean
businessman reiterated his view that the DPRK Consulate in
Shenyang was merely a commercial enterprise staffed by
consuls whose primary responsibility was to make money and
provide prompt and personalized customer service to the
people doing significant business with North Korea, such as
himself, saying that he merely had to make a single phone
call to resolve paperwork.

WICKMAN