The Role of the Border Region in Sino-North Korean Trading Networks: A Focus on Dandong, China

ABSTRACT

This research investigated the micro-level Sino-North Korean trading practices in Chinese border city Dandong with the help of a network approach. Dandong companies had long-term business relations with North Korea and took brokerage roles by channeling North Korean information, personnel, and products to the outside world. Dandong took an indispensible role in providing access to North Korean-related businesses with the advantage coming from historically-built personal relations, convenient logistics directly linking to Pyongyang, and easy access to North Korean economic agents. They leveraged brokerage roles in Sino-North Korean trading networks and contributed to give the networks a high-level of path-dependency. The strategies of Chinese border companies and less-institutionalized trading system of North Korea provided existing partners distinctive advantages in business relations. These practices that endowed border companies unique brokerage roles are likely to persist until a dramatic change in North Korea and its international environments.

KEYWORDS:

• border regions
• network analysis
• brokerage effects
• Sino-North Korean trading network
• Dandong

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Huaqiao, or overseas Chinese, refers to those who once lived in North Korea with permanent residency and regained Chinese citizenship after coming to China in the 1980–90s during the economic downturn in North Korea. The number of Huaqiao in Dandong is estimated to be 7,000 while the number of Korean ethnic Chinese was 8,000 as of 2010 (Zhang 2011, 280).

2 In graph theory, betweenness centrality (Cb) is a measure of centrality in a graph based on shortest paths. It represents the degree to which nodes stand between each other. For details and calculation, see Table 2 in the Appendix.

3 Among an average of 1,000 international trading companies in Dandong, only 10 percent of non-local Chinese companies visiting Dandong have such rights (“Xin zoushi xin jiyu,” 2007).