Comments on: S.Korea Eyeing Defense Budget Cut and More Taxes to Finance N. Korea

By: Sonagi

Sonagi — Wed, 26 Sep 2007 01:51:59 +0000

“But on the Chinese border, it’s just normal people trying to make a living, trading kitchenwares, clothes, TVs and cell phones, and with both governments usually looking the other way. “

That’s the part that puzzles me. Chinese-made goods are popular in North Korea, but I don’t recall seeing in China or hearing of any products made in North Korea, save for overpriced cigarettes and liquor sold at North Korean restaurants and souvenir shops.

By: Linkd

Linkd — Wed, 26 Sep 2007 00:39:38 +0000

Oh, it’s probably nothing so formalized as to deserve the title “FDI”. With the South, you can specifically quote levels of gov’t aid based on press releases. You can also measure commerce, since it all flows through official channels and Kaesong. But on the Chinese border, it’s just normal people trying to make a living, trading kitchenwares, clothes, TVs and cell phones, and with both governments usually looking the other way. The charts show how much error there is in the guesses for NK/China trade. Still, it adds up to more than total SK gov’t aid to NK. Probably more important than the products traded is the information that the Norks get from and about the outside world.

By: Sonagi

Sonagi — Wed, 26 Sep 2007 00:24:53 +0000

Thanks for the link, Linkd. I’m surprised that China would make significant FDI in North Korea, for China’s northeast is economically moribund, and even private investors would need state approval. I wonder where those manufactured goods end up.

By: Linkd

Linkd — Tue, 25 Sep 2007 22:53:09 +0000

Ha! Come to think of it, that’s the same kind of work that still goes on in basements throughout 해방촌 every day, an area which apparently got its name from the number of North Koreans that used to settle there.

By: Linkd

Linkd — Tue, 25 Sep 2007 22:39:38 +0000

Sonagi,
http://papers.ssrn.com/sol3/pa.....id=1008902

The companies are of course Chinese companies (and small ones at that), the North not having any. North’s exports still include a lot of labor. Prof Lankov also sat at that border and watched the trucks. He said that small-scale Chinese manufacturers seem to have Norks do some light assembly, textile work, that kind of stuff. With the nation’s whole current account coming to US 2 billion only, just about any commerce becomes significant. Above document doesn’t mention raw materials.

By: Sonagi

Sonagi — Tue, 25 Sep 2007 20:42:05 +0000

“China is actively trading with NK at the company level. Just plain old business, old fashioned capitalism. And China is NK’s largest trading partner, imports and exports. Drugs, supernotes and weapons are becoming less a part of NK trade, and real consumer products are taking over.”

I’m curious as to what North Korea is selling China. I watched trucks roll across the bridge at Dandong, and from what I could see, the traffic was mostly one-way: large flatbeds loaded with crates of foodstuffs and industrial products like pipes. I wondered what North Korea could possibly trade China in return. There’s not much in the way of manufacturing in North Korea, and if they’re trading raw materials, I’m surprised there’s anything left to trade.

By: The "Image of Peace" at ROK Drop

The "Image of Peace" at ROK Drop — Tue, 25 Sep 2007 19:33:48 +0000

[...] money will not be spent on social issues, it will spent on giving it right back to Kim Jong-il as well as raising taxes to give him yet even more [...]

By: virtual wonderer

virtual wonderer — Tue, 25 Sep 2007 19:14:16 +0000

hard to believe this report. is this really good for the roh camp during election time?

doesn’t seem likely. higher taxes is never popular. maybe they were really talking about reducing military budget. but forces that be would never like that.

but if they were serious… then they must really think that kji is about to keel over.

By: Hatch SZ

Hatch SZ — Mon, 24 Sep 2007 03:14:27 +0000

Roh’s exit from office cannot come soon enough. And he just may have overstepped the good graces of the S Korean people, even the Anti-American ones, with this one. People would forgive him if he siphoned money off somehow, but something so out there as a special tax has gotta be too much.

‘Internal memo’ my ass, this was purposely ‘leaked’ to float the idea.

By: maxwellsmart

maxwellsmart — Sun, 23 Sep 2007 00:23:01 +0000

The Korean left wants to hand entire South over to Kim Jung Il. They believe that North Korea, not South, is the legitimate government in the pennisula.
They believe in Kimilsunism/Juche stuff.
This is no surprise. If Mr. Lee does not win the election, it will be all over for South. Hopefully that day would never come…