The History of Chinese Entrepreneurs in North Korea

The Chinese Korean community (Hwagyo/华侨/Huaqiao) play a special role in the entrepreneurial community in North Korea and as such has been of great interest to Choson Exchange. Given their ability to cross the North Korea-China border easily, their relative ease of movement inside North Korea, and their exposure to entrepreneurship in China, they are well-equipped to capitalize on market opportunities inside Korea. In this guest article, Fyodor Tertitsky, a scholar who focuses on this important community, gives an overview of the history of the Hwagyo in the country.

The usual image of North Korea is that it is a highly centralised state with a mono-ethnic and closed society. The population is brought together and atomised through a set of state regulations, the people cannot live the country without a permission form the state and access to foreign media is strictly forbidden.

This perception is to a very large extent true. However, there are some people in North Korea, who do not fit this scheme. The can freely listen to foreign radio. They can cross the border with China and go back – whenever they want and without any problems. They are also very wealthy - by North Korean standards, of course. No, I am not talking about the Party elite. In fact, this people are explicitly forbidden to enter the Party – and, to my knowledge, there was only one exception, granted by Kim Il-sung himself.

This group are the Hwagyo – residents of North Korea who hold Chinese citizenship. The majority of the diaspora are the descendants of the people who migrated to colonial Korea from different areas of China. When the victorious Allies divided Korea in 1945 and the Soviet authorities began to build a new state in northern Korea, they decided to grant Hwagyo identity documents which defied them as foreigners living in northern Korea. It seems that this act created the status that Hwagyo still enjoy – Chinese citizens with the permanent residents’ rights in North Korea.

Initially they were given a preferential treatment by the North Korean government: they had they own schools, enjoyed some degree of autonomy and were given some assistance from the state on regular basis. The DPRK also helped Hwagyo to rebuild their homes after the Korean War ended. However, a few years after the Chinese troops left Korea, Kim Il-sung started an assimilation campaign: the North Korean authorities began to encourage the Hwagyo to renounce their Chinese passports and accept North Korean citizenship. In 1963, the language of tuition in Hwagyo schools was switched from Chinese to Korean and the curriculum was unified with that of North Korea.

When Mao Zedong launched a Cultural Revolution, the already tense relations between China and North Korea quickly degraded to open animosity. Most Hwagyo faced increasing discrimination and were forced to change their citizenship to North Korea, but even this did not completely liberate them from discrimination. The confrontation culminated in August 1966, when some students from the Pyongyang Secondary School for Chinese prepared posters hailing Chairman Mao, and organised meetings at which they listened to Mao Zedong’s speeches and sang songs hailing the PRC. Moreover, they even requested “Mao Zedong Thought” to be incorporated into the school’s curriculum! Needless to say, the request was denied. Later, the school was disbanded by the North Korean authorities.

The late 1960s were the darkest hour for the diaspora. It ended in 1971, when, after the Chinese Premier Zhou Enlai’s visit to the DPRK, the relations between the two countries were normalised and many Hwagyo were able to reinstate their status as Chinese citizens. The Pyongyang Secondary school was reopened too, by the way.

In the 1980s many Hwagyo forever left North Korea for China. The cause was simple: under the leadership of Deng Xiaoping China was prospering. Another factor which contributed to this was the special programme of assistance to the repatriated Chinese citizens, initiated by Beijing.

In 1990s North Korea faced a period of famine and economic collapse; this tragedy took lives of many people. After the famine, the country saw what is usually called “marketization from below”: farmers’ markets emerged across the country, and North Koreans started to obtain products they need by buying them on markets, not by receiving them from the state – which was the usual practice in Kim Il-sung era. Understandably, the modern days became a golden era for Hwagyo. Their right to go to China – and back – meant that they could buy Chinese goods, bring them to Korea and sell them. Most people did so – and their income skyrocketed.

Nowadays Hwagyo constitute a vital part of the new, marketised North Korea. Not only could they bring goods and control trade networks, but they could also deliver money to North Koreans from their relatives. Their income is much higher than the average North Korean – not only do they have electricity for the whole day (electricity is usually provided for a few hours in Pyongyang and for a few minutes in a faraway province), but many of them also live a private house with all modern home appliances and gadgets. Hwagyo families very often own a motorcycle and sometimes even a car. They can listen to foreign radio channels (officially they are supposed to listen to official Chinese news, but, of course, they don’t listen just them) and read Chinese newspapers. All is – more or less – well.

However, the young Hwagyo are not as enthusiastic about continuation of their lifestyle, as they parents are. The education in North Korean “Schools for Chinese” is substandard: most graduates barely speak any Chinese and don’t know what the PRC’s flag looks like or what city is the capital of China. Therefore many young Hwagyo study in China, - and after they see the country, many conclude that the PRC – with its diverse culture and booming economy – offers more opportunities.

So many young people choose to settle in China – where they, Chinese citizens, are of course welcomed. The Hwagyo diaspora, which according to the Chinese estimates comprised of 5000 persons in 2009, continues to shrink and we may see it disappearing almost completely.


A longer and more detailed version of this article is scheduled to be published in The Journal of Korean Studies, Spring 2015.