By Jeremy Page
BEIJING--North Korea almost doubled its electricity exports to
China last year despite its own chronic power shortages, drawing in
more revenue as other sources of income were shut off by
international sanctions.
At the same time, China has been helping to boost North Korea's
power supplies by building two new joint-venture hydropower plants
on the Yalu River that forms their common border, according to
notices on Chinese government and procurement websites.
United Nations sanctions on North Korea don't ban electricity
trade. Beijing already operates at least four joint venture
hydropower plants with Pyongyang, power from which is usually split
between the countries, with the bulk going to China.
But the balance shifted dramatically last year, when North
Korea's power-trade surplus with China grew to $10.8 million from
$2.6 million in 2016, Chinese customs figures show.
China's imports of North Korean power rose 91% to 319,681
megawatt-hours, or $11 million, the highest since relevant records
began in 2000, the customs figures show. Chinese electricity
exports to North Korea dropped around 96% to 942 megawatt-hours, or
$132,000, the lowest since 2005.
That means that North Korea earned more hard currency but had
less power for its people, potentially exacerbating shortages that
regular visitors say have caused increasingly severe brownouts in
recent months.
The two new plants, to be completed in 2019, will "benefit both
China and North Korea," said a notice posted last year on the local
government website of Ji'an, a Chinese border city. In January, a
tender was issued online for work on transmission lines, to be done
by October.
Local and central government officials declined to comment.
The trade data and construction work show how Beijing continues
to support Pyongyang in key ways even as it steps up enforcement of
U.N. sanctions on its border, leading to a steep decline in overall
bilateral trade last year.
North Korea's electricity supplies are closely watched by the
U.S. and other countries as they try to gauge the impact of
sanctions that they hope will prompt its leader, Kim Jong Un, to
give ground ahead of or during his planned talks with U.S.
President Donald Trump in May.
Beijing has also been alarmed by Mr. Kim's nuclear and missile
tests since 2016, but is wary that collapse of his regime through
economic crisis or U.S. military action could bring U.S. troops up
to the Chinese border, trigger a flood of refugees into northeast
China and create a unified, democratic, pro-Western Korea.
When a ban on joint ventures with North Korea was added to U.N.
sanctions in September, China negotiated inclusion of a line saying
the provision wouldn't apply to existing China-North Korea
hydroelectric power infrastructure projects.
No other country officially trades electricity with North Korea,
according to U.N. trade data. And while Beijing has sharply reduced
its exports of refined oil products to North Korea in recent
months--and says it strictly enforces U.N. sanctions--it still
provides large quantities of crude oil that aren't included in
customs figures, U.S. officials say.
North Korea, which appears in nighttime satellite photos as
shrouded almost entirely in darkness, can ill afford to lose the
power from its joint-venture plants with China.
Regular visitors to North Korea say power supplies improved in
recent years, but brownouts have become more regular--with as
little as three hours of electricity daily in some areas--since
U.N. bans on coal and other major North Korean exports were
introduced last year.
As those sanctions bite, Pyongyang may be "looking into any ways
it can find to boost revenues, including selling electricity that
it might otherwise find a way to use locally," said David von
Hippel, a senior associate at the Nautilus Institute for Security
and Sustainability.
North Korea's deteriorating economy and creaky national grid
mean that "it may have power that it can't use locally or send to
other areas of the country, and thus can sell to China," said Mr.
von Hippel, who has studied North Korea's electricity
infrastructure.
China's energy links to North Korea are also controversial
because some U.S. and allied officials say that Pyongyang diverts
supplies away from ordinary people and toward its military and to
its nuclear program.
China protects its joint-venture hydropower plants with North
Korea "under the argument that energy supply benefits ordinary
people," said Curtis Melvin, a researcher at the U.S.-Korea
Institute at Johns Hopkins SAIS.
"It does, but it also supports the military industry which has a
number of important factories concentrated in Jagang Province,"
which covers the area adjoining the two new plants. Mr. Melvin said
China's priority was likely to secure power supplies for its own
northeast, but that assisting North Korea was also a motive.
Since 2012, official Chinese media have reported on plans to
link North Korea to China's national grid by building a 66 kilovolt
transmission line from the Chinese border city of Hunchun to the
North Korean port of Rason, where many Chinese companies have
invested in recent years.
Local authorities in the northeastern province of Jilin said in
2016 they were pressing ahead with that plan, but haven't provided
any further information and the company in charge, Northeastern
Electrical Grid Co. Ltd., didn't respond to requests for
comment.
North Korea's power consumption and generating capacity have
plummeted since the Soviet Union's collapse in 1991 ended all
assistance from Moscow.
The International Energy Agency estimates that North Korean
electricity consumption peaked at 1,247 kilowatt-hours per capita
in 1990 and dropped to 460 kilowatt-hours per capita by
2015--around 4% of the level in the South.
North Korea is now thought to get around 70% of its electricity
from hydropower, experts say. One significant source is the joint
venture China-Korea Hydropower Company, established in 1955.
The company's joint-venture plants include one of North Korea's
largest power sources, the giant Sup'ung Dam, which was completed
by the Japanese in the early 1940s, bombed in the 1950-53 Korean
War and later refurbished with Chinese help.
China-Korea Hydropower Company operates three other plants built
on the Yalu River between the 1960s and 1980s, according to Chinese
researchers.
The company is also responsible for the new Wangjianglou and
Changchuan hydropower plants, which are being built on the Yalu
River with combined investment of 1.1 billion yuan ($174 million),
according to Chinese government websites. Company officials
couldn't be reached for comment.
Xiao Xiao in Beijing contributed to this article
Write to Jeremy Page at jeremy.page@wsj.com
(END) Dow Jones Newswires
March 16, 2018 22:29 ET (02:29 GMT)
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