State-led car smuggling has exploded in Hyesan, a border city in Ryanggang province. Wealthy individuals are rushing to invest in trading companies involved in the smuggling operations to maximize profits.
“Chinese-made passenger cars are now flowing into Hyesan through state-sanctioned smuggling networks,” a Daily NK source in Ryanggang province revealed recently. “People with money are pouring funds into trading companies to boost their earnings.”
According to the source, about 90% of the smuggled vehicles are used cars from China, with new vehicles making up only a small fraction of imports. New cars, being more expensive, sell more slowly, which explains why used vehicles dominate the market.
More private investors are jumping into car smuggling because vehicle prices are expected to rise when the Yalu River thaws, making smuggling operations more challenging.
Since the beginning of the year, the price of a waku — an official North Korean trading certificate required for smuggling cars — has dropped from 30,000 Chinese yuan to 25,000 yuan. Meanwhile, car prices in North Korea have remained stable, significantly increasing profits for smugglers and attracting more private investment.
In Hyesan, used cars that sold for 83,000 yuan last year continue to fetch the same price. With the reduced waku costs, smugglers who previously made 5,000 to 7,000 yuan per car now pocket 10,000 to 12,000 yuan.
“The government lowered the waku price not simply to ease burdens but to attract more foreign currency through increased car smuggling, ultimately benefiting the state,” the source explained.
In this climate, wealthy individuals are investing in smuggling operations to maximize returns, with even remittance brokers joining the list of investors.
“Some remittance brokers have abandoned their previous operations for car smuggling as authorities crack down severely on Chinese-made mobile phones,” the source said. “Although state-led smuggling generates smaller individual profits since earnings must be shared with trading companies, it offers stability without the risk of crackdowns.”
In North Korea, those with capital find ways to profit wherever smuggling occurs, while vulnerable populations face increasing hardship.
“With smuggling operations running smoothly, the exchange rate in Hyesan has climbed to 3,000 North Korean won to the yuan,” the source noted. “This has driven up marketplace prices, making life increasingly difficult for ordinary people.”
The pattern is clear: when smuggling thrives, wealthy investors profit while vulnerable households suffer from rising exchange rates and inflation.
“As they say, money makes money. The rich continue accumulating wealth while the poor are pushed further into a corner,” the source concluded. “The widening gap between rich and poor is creating a clear wealth divide between social classes, mirroring the disparity between Pyongyang and the provinces.”
March 04, 2025 at 12:00PM
by DailyNK(North Korean Media)