Since the start of the Korean War in 1950, when it included North Korea in the “Trading With the Enemy Act”, the United States has sought to restrict North Korea’s ability to bank and trade. This has tightened markedly over the past decade, with the United States imposing rounds of sanctions designed to curtail North Korea’s ability to procure materials for its nuclear weapons program by shutting the country out of the international financial system.
The restrictions hurt at first, but North Korea wised up. It uses small banks in China or Russia to transfer money—several banks in Dandong, a Chinese city just over the border from North Korea, said it was possible to wire money to Pyongyang, for a hefty commission—or simply reverts to old-fashioned suitcases full of cash, which are much harder to stop with sanctions.
There is a sense in the Chinese border town of Dandong that sanctions are an issue for Washington and Beijing but that they don’t apply here on the border. “I’m just a local businessman,” one Chinese businessman said, adding that sanctions “apply to big, international companies, not to private individuals like us,” clearly considering his business with North Korea domestic. “Anyway, we find ways to get around them.”
For North Korean individuals who make money on the Chinese side of the border, one question is how to get it back. Everyone interviewed said that it is entirely possible to send cash to North Korea—people usually just carry it in bags over the bridge—and that while there might technically be limits on how much a person can carry, in practice there are no checks, or at least no checks that cannot be overcome by greasing a few palms.
Politics and economics are not entirely intertwined. “China and North Korea are like lips and teeth,” said a North Korean factory manager, repeating an old saying about the neighbors.