Border trade between Dandong and North Korea began in 1882, when the Qing government opened Dandong Port for commercial exchanges with North Korea and other countries. At that time, the Chinese-Korean border barter trade was established at Zhongjiangtai (now Malishi in Jiuliancheng, Dandong City) and on Lanzidao Island within North Korean territory. This trade was characterized by free trade, allowing residents on both sides of the border to travel freely back and forth.
　　 In 1985, a delegation from the provinces of Liaoning and Jilin held friendly consultations with the Central Smart Delegation of the North Korean Consumer Cooperative in Pyongyang and signed the “Agreement on Barter Trade between Border Areas of China and North Korea.” Official border trade with North Korea was formally launched at the beginning of 1961. During the Cultural Revolution, bilateral border trade activities were suspended; however, in September 1981, with the approval of the State Council, border trade between China and North Korea was resumed. Since then, economic exchanges along the China-North Korea border have continued to develop steadily.

　 　I. Current Economic and Trade Situation with North Korea

　 　The Dandong port accounts for more than 70 percent of China's total trade with North Korea, making it the country's primary gateway for trade with North Korea. In 2003, the total value of imports and exports through Dandong’s various ports and river-sea trade routes to North Korea exceeded one billion U.S. dollars. The goods that Dandong city exports to North Korea have shifted to primarily include means of production—mainly mechanical and electrical products, textile raw materials and finished textiles, chemical products, plastics and rubber products, metal materials and products, paper and cardboard, mineral materials and products, as well as grain, oil, and food products. The main imported goods in trade with North Korea include aquatic products, garments (for re-export), oilseeds and medicinal herbs, mineral products (such as iron ore powder and gold ore powder), metal materials (including lead, zinc, aluminum, copper, as well as steel billets and scrap steel), dried vegetables and nuts, timber, furs and fur products, and wood pulp, among others.

　 　Cross-border trade with North Korea has boosted economic and technological cooperation between the two sides, shifting from a purely “both ends abroad” model to joint ventures and cooperative partnerships, thus gradually shaping a new pattern of collaboration. Faced with economic difficulties and foreign exchange shortages in North Korea, some Chinese enterprises have actively sought opportunities to leverage North Korea’s resource advantages by setting up joint-venture enterprises within North Korea itself. Such economic and technological cooperation is helping to boost foreign trade exports. Currently, dozens of Chinese companies have invested in North Korea to establish manufacturing and processing enterprises as well as catering and service businesses—ranging from seafood processing plants and aquaculture farms to mining operations, wholesale markets, restaurants, retail stores, and various types of processing facilities such as lighters and cardboard box factories. Through these joint ventures and cooperative arrangements, not only have domestic product exports expanded, but also the payment capabilities of North Korean enterprises have been enhanced. Additionally, some foreign investors have also set up projects in North Korea, including mobile telecommunications networks, casinos, hotels, and restaurants.

　 　II. Main Directions for Future Economic and Trade Exchanges with North Korea

　 　China’s economic and trade interactions with North Korea represent a golden opportunity to kickstart trade and focus our efforts on North Korea’s economic development. We should expand joint ventures and cooperation in investment as well as collaboration in economic, technological, and technical fields with North Korea.

　 　1. Cooperation in the Development of Mineral Resources: North Korea boasts abundant reserves of mineral resources. It has substantial deposits of coal, graphite, limestone, as well as gold, silver, iron, lead, magnesium, tungsten, zinc, and copper. Among these, graphite and magnesite reserves rank among the highest in the world, while gold and lead-zinc reserves are exceptionally large. However, current mining and extraction activities remain at a preliminary stage. The mining and ore-processing equipment was largely built in the early 1950s with aid from the Soviet Union and other Eastern European countries. The technology is outdated, the equipment is aging, and to date, it has not been modernized or upgraded. As a result, most mines are either completely or partially shut down. Given the current market conditions, I propose investing in the idle ore-processing equipment by forming a joint venture with North Korea, using the refined mineral products as a return on investment. Currently, the most promising projects include gold, lead-zinc ores, iron ore, molybdenum ore, anthracite coal, as well as graphite and magnesite.

　 　2. Joint Ventures for Developing Marine Fishery Resources: North Korea boasts abundant fishery resources, with its western coast harboring significant marine resources and its eastern coast even richer in aquatic products. However, North Korea itself lacks fishing vessels, and its seafood processing facilities are severely underdeveloped; aquaculture is only just beginning to take off. Meanwhile, China’s coastal regions have a large number of idle fishing vessels and even more idle seafood processing plants. Therefore, the conditions are now ripe for leveraging China’s surplus fishing and processing equipment to develop North Korea’s fishery resources. The investment return will come from the harvested and processed seafood products.

　 　3. Cooperation in Tourism Resources: North Korea boasts abundant tourism resources. In addition to its rich cultural landscapes and vast natural attractions, visitors can also experience a typical planned economy firsthand. Pyongyang was once a world-class garden city. It is very convenient to organize tour groups to visit North Korea.

　 　4. Cooperation in General Processing Industries and the Establishment of Catering and Entertainment Businesses: Due to the long-term influence of the planned economy, particularly the emphasis on prioritizing the development of heavy industry, North Korea has been lacking in general processing industries. Currently, sectors showing promising prospects include furniture factories, particleboard production, wood processing, general manufacturing, small-scale cold beverage and food factories, convenience foods, photography services, catering and karaoke lounges, bowling alleys, billiard halls, and table tennis facilities—all of which are demonstrating strong growth momentum.

　 　5. Production, Processing, and Trade of Architectural Decoration Materials: North Korea’s construction materials industry is relatively weak, yet the country is currently undergoing large-scale construction projects. As a result, the production and trade of construction materials are set to become a hot spot. Therefore, the North Korean government has decided to allocate several hundred thousand square meters of land in Pyongyang for the establishment of a specialized industrial park dedicated to the production, processing, and trade of construction materials. Within this park, enterprises can be set up to produce and process a full range of architectural decoration materials—including plastic steel plants, aluminum alloy processing plants, marble processing plants, paint factories, sanitary ware manufacturers, wrought-iron workshops, wood-processing facilities, as well as plumbing and electrical equipment—serving both industrial, agricultural, and civil construction projects. Meanwhile, additional construction materials industries, such as tile factories, glass factories, and red-brick plants, can also be established in suburban areas of Pyongyang and in Sinuiju.

　 　6. Small-scale power plants and modern telecommunications: Currently, North Korea suffers from an electricity shortage. We could transfer to North Korea our idle thermal power generation equipment with capacities ranging from several thousand kilowatts to 10,000 to 50,000 kilowatts. In return, the North Korean government could provide mineral products, aquatic products, coal, and steel as investment compensation. Modern telecommunications infrastructure, such as mobile communications, could be gradually developed in provincial capitals of North Korea, including Sinuiju.