The recent Chinese ban on North Korean seafood imports has had a severe impact on the seafood business in Donggang, a Chinese border port city with North Korea.
Donggang, which is administered by Dandong, northeastern China’s Liaoning Province, serves as a national hub for the seafood trade between China and North Korea, with Chinese merchants sailing to North Korean waters to source products, especially during China’s summer fishing ban.
During the ban, which usually starts from June 1, but began on May 1 this year, until September 1, China relied heavily on seafood from North Korea.
For example, about 80 percent of the swimming crabs in China are from waters east of North Korea, according to a local seafood merchant named Zhao on Monday.
The price of North Korean swimming crab, which was 10 to 30 yuan ($4.5) every 500 grams, has skyrocketed to 100 yuan every 500 grams, as the legal supply is virtually nil, Zhao added.
On August 14, China’s Ministry of Commerce and the General Administration of Customs jointly released a notice declaring that China would impose an import ban on coal, iron, iron ore, lead, lead ore and seafood from North Korea as stated in UN Resolution 2371 unanimously adopted by the UN Security Council on August 5.
The new rule took effect at midnight of August 15, leaving no grace period for the merchants, which caused losses in the hundreds of millions of yuan for seafood merchants of border cities, including those from Hunchun of Northeast Jilin Province and Donggang.
“We never expected it to be implemented that soon, at least not before September, so we placed even bigger import orders in August in a bid to reduce the losses. However, it turned out to work against us,” Zhao explained.
Chinese companies have to pay for almost everything, including the fishing and food processing facilities as a condition to conduct trade with North Koreans, and the North Korea will never give their money back, whether the business is thriving or not, according to a number of seafood vendors the Global Times reporter spoke to on Monday.
Under the seafood import ban, Chinese merchants are forbidden from getting their supply from North Korea, having made no revenue since a week ago, and also have to shoulder the expenses of the ships and crew members who are grounded, said Zhang, who invested several thousands of US dollars for his seafood supply from North Korea.
Zhang said he has kept almost all of his ships, which used to carry seafood back and forth daily, docked in the Dataizi port of Donggang for six days due to the ban.
“As part of our strategy, we still have a few ships out there in the sea, hoping tensions on the Korean Peninsula would calm down and the ban would be eased, but it seems impossible anytime soon,” Zhang added.
Zhao said he predicts Donggang investors beyond the seafood business will also suffer from the seafood ban, since seafood products used to serve as a “hard currency” alternative to make up for the losses of Chinese companies engaged in the coal business from previous UN sanctions.
Few stores at the Donggang Yellow Sea Seafood Products Wholesale Market, the biggest local such market that dispachees goods to across the country, remained operating on Monday. Photo: Deng Xiaoci/GT
When asked how strict the ban is, Xu, one of the biggest seafood business operators in Donggang, told the Global Times that custom authorities do not provide services for clearance of these imports.
“And if they find a cargo of smuggled goods worth more than 200,000 yuan, the business owner would be jailed, and each of our foreign trade boats can easily carry products worth more than a million yuan. The jail term would rise depending on the amount involved,” Xu added. UN Resolution 2371 is expected to reduce North Korean revenue by approximately $1 billion, the UN website said.
According to an anonymous insider, the seafood export business used to account for about one-third of North Korea’s foreign currency earnings.
Source: Global Times