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China border traders lose money amid Korea clamp

International Business
Sun, 05 Nov 2017

BEIJING: Traders in the Chinese border city of Dandong have seen business all but dry up due to harsh new UN sanctions on North Korea.

Trader Yu Kaiguang spends his days scrambling to obtain payment from the suddenly broke North Korean state companies to whom he sold on credit.

“They have no money to pay us in cash, and the worst is that because of sanctions they can’t settle the bill with goods such as coal, as they did in the past,” said Kaiguang.

He said he’s owed about $1 million in all for deliveries of toothpaste, instant noodles and other household items. He’s trying to avoid laying off staff by continuing to export foodstuffs such as pine nuts and red beans. “If they become unemployed, it would be bad for both the state and society.”

The trader’s plight appears increasingly commonplace across Dandong, where the bulk of the cross-border trade is handled.

The owner of another firm, Dandong Baoquan Commerce and Trade Company, which used to import iron ore and coal and export basic consumer goods, said he was still owed around $200,000 by his North Korea clients.

“I had to lay off about 10 staff, but I had no other choice because it was the government policy,” Han Lixin said, referring to the sanctions. “I’m still in business hoping to trade with other countries, but it takes a lot of time and efforts to develop customers.”

Large-scale trade involving North Korean resources such as iron ore and coal has been banned entirely under the sanctions, dealing a big blow to Dandong’s port.