North Korea foreign trade shifts to state control

North Korea is transitioning its foreign trade system to operate exclusively through state-sanctioned organizations, as of this year, according to recent reports. Authorities have eliminated the use of individual traders' Chinese mobile phones, thereby severing many longstanding trade connections. A source from North Pyongan province revealed that traders in Sinuiju and nearby border regions once utilized Chinese phones for direct communication with Chinese partners, especially in contract-manufacturing dealings.

However, this arrangement is now rapidly deteriorating. Previously, authorities permitted traders to register Chinese phones with the security agency when necessary for negotiations. But now, even registered phones are being confiscated. It is reported that this directive came following Chinese President Xi Jinping's visit to North Korea.

Authorities first monitored the situation, but starting last month, they began confiscating phones outright. Some traders had maintained unregistered Chinese phones by leveraging personal connections to security agents, but this option is now disappearing as these agents become less lenient. The National Intelligence Agency, formerly known as the Ministry of State Security, is now overseeing the entire trade structure, forcing a shift from individual trader-led transactions to state control.

This change is not merely a crackdown on phone usage; rather, it signals a broader restructuring of North Korea's foreign trade. Traders previously negotiated prices and delivery schedules with Chinese counterparts directly, a measure of their competitiveness and influence. Now, North Korea is moving orders, payments, shipments, and cancellations through designated trade organizations approved by the Ministry of External Economic Affairs.

Consequently, direct contact with Chinese partners has all but disappeared. The source highlights that traders will likely be confined to production and processing tasks, with fewer opportunities to find buyers or negotiate prices directly. The once thriving trade networks with China, built over years, are expected to weaken rapidly as this centralized state system absorbs the previous informal, direct-contact networks.

Such a shift could potentially reshape North Korea's broader distribution and production system, according to observers.