Chinese traders get down to business at Pyongyang trade

It was a tale of just two economies when the 13th Pyongyang International Trade Fair opened in the North Korean capital on Monday, with two-thirds of the exhibitors domestic firms, and almost all the others Chinese.

Eight sets of progressively tighter United Nations Security Council sanctions imposed on Pyongyang over its nuclear and ballistic missile programmes have left its economy progressively more isolated.

The latest, passed earlier this month after its sixth atomic test -- which it said was a hydrogen bomb -- bans all joint ventures with North Korean entities, with just a few exceptions, and requires existing ones to be closed within 120 days.

The only European firm at the show was Italian shipping company OTIM, which in 2001 was the first EU freight forwarder to open a representative office in Pyongyang.

Initially business was good, said company president Mario Carniglia, but "then the sanctions came and it became more and more difficult".

Now the firm mostly handles inbound humanitarian shipments under UN and European Union aid programmes, with its commercial cargoes "practically nil at this stage".

Chinese customs inspections were becoming increasingly strict, a colleague added.

Among the few North Korean items still being exported to Europe, said Carniglia, were spare parts for accordions, a musical instrument that is unusually popular in the North.

"Just parts because if it is a complete accordion it is considered a luxury good and you cannot import it in Europe."

Russian ambassador Alexander Matsegora told AFP that unlike in the past, there were no Russian companies taking part. "Maybe they have not much interest in this market."

Some foreign firms were doing business with North Koreans, he said, but "most of those companies are of Chinese origin".

- Cooking pots, health tonics -

Organisers said there were 253 exhibitors at the fair, held in a cavernous hall on the outskirts of the capital, with 81 from overseas.

Pride of place at the entrance went to an official Syrian stall displaying a small selection of famous Damascene Aghabani cloth and a few bars of green laurel soap from war-torn Aleppo.

Cuba and Indonesia were the only other embassies to take exhibition space.

Most of the Chinese firms were traders bringing cooking implements and domestic appliances to sell to retail buyers, rather than manufacturers looking for long-term deals or state-owned enterprises promoting infrastructure projects.

Li Likun, of Shenyang Xiangbo Trading Company, offered a selection of belts and electric massage machines.

It was his fifth or sixth visit, he said, and business was good. "Every time I come here it's getting better and better."

North Korea has quietly engaged in some market reforms under leader Kim Jong-Un, and Seoul believes it enjoyed its fastest growth since 1999 last year.

However, officially it insists that it is sticking to the orthodoxy of Kim's father and grandfather Kim Jong-Il and Kim Il-Sung, the founder of the Democratic People's Republic of Korea.

Buyers at the fair paid in US dollars and some products were aimed squarely at Pyongyang's growing middle class -- two bottles of New Zealand green-lipped mussel extract capsules supposed to help joints from Australian food supplements firm Koast cost $110.

For now trade was "okay", said Kim Kum-Ran, from its local agent, "but it will get tougher".

"I wish the Americans will stop torturing us with useless sanctions and recognise us as a nuclear state so that all trade can be done freely and there will be peace in the world."

- Leadership 'under pressure' -

The North does not publish any official trade statistics of its own, regarding them as a state secret -- shrouding the exact details of its commerce in mystery.

But according to the South’s Korea Trade-Investment Promotion Agency (KOTRA), the North had exports of  $2.8 billion and imports of $3.7 billion last year, with China accounting for more than 90 percent.

"The trade with China of course is continuing and ongoing," said Peter Ross, who works for an EU development programme in Pyongyang. "That is a fact and a reality that sustains most of the business here."

Sanctions, he said, were "definitely making it more and more difficult for this country" particularly against a backdrop of popular expectations for growing personal prosperity.

"That's a challenge which the government has to meet," he added. "Sanctions are making this harder and harder, so in that indirect way they are putting pressure on the government."