Marcus Noland, senior fellow at the Washington-based Peterson Institute for International Economics, said that might suggest an impact from increased interaction with China. There was also talk of a building boom in Chongjin, North Hamgyong’s capital and the country’s third-biggest city, he said.
“The economic integration with China is proceeding,” said Noland, an expert on North Korea’s economy.
“If it really appears that the Chinese are having an impact up in North Hamgyong I think that will probably spur some sort of internal debate, though probably not a very public one, about what should North Korea’s relationship to China be,” he added.
One recent Chinese visitor who has done business in Chongjin said well-connected North Koreans preferred to ride in Mercedes Benz cars, wore fancy watches and spent hundreds of US dollars on mobile phone bills each month.
Park said the North Korean elite were finding ways to tap into China’s economic might.
“If you look at the most senior members of the North Korean regime they are really engaged in business and commerce. You have a situation where, in a way, the elites in North Korea are now trying to leverage their positions of power to monetize them,” he said.
END OF THE ROAD
After the Chinese border city of Hunchun, the four-lane G12 expressway narrows into a smaller road leading to the Quanhe border crossing.
On the other side of the Tumen River that divides the two countries, the dirt road from the Rason economic zone to China was finally paved last summer. Chinese state media called it a big step in Rason’s development.
Jin Qiangyi (金強一), director of the Center for North and South Korean Studies at Yanbian University, said he believed the two-lane rural road was originally slated to be a highway. Its downgrade reflected uncertainty about the ability of companies to transport enough cargo to make it economical.
“From the economic angle I don’t think there are many people very enthusiastically investing in North Korea. There’s too much risk,” Jin said.
Still, China’s leaders have little choice but to stick with the economic integration strategy, Jin said, even as North Korea pushes up tensions on the Korean Peninsula to their highest in decades.
Work is even under way on multi-billion US dollar projects to extend bullet train lines to Dandong and Hunchun. The Dandong link is slated for completion in 2015.
“You can’t say they’ve failed yet,” Jin said. “But they haven’t succeeded.”
Additional reporting by Charlie Zhu