North Korea leases out its squid beds to China

North Korea is allowing Chinese fishermen into its territorial waters on the East Sea in exchange for cash, according to Seoul government officials.

The North Korean and Chinese governments recently agreed to allow squid boats from China to fish in North Korea’s waters, said a Seoul official who declined to be named.

About 250 Chinese boats are operating near Najin and Chongjin, two port cities in North Hamgyong Province, a northeast coastal area. It is the first time such a large number of Chinese crafts have been allowed to operate in North Korea’s seas, he said.

North Korea is collecting about 250,000 yuan ($36,913) for each boat for 2010, meaning the impoverished country is expected to earn about 62.5 million yuan in the deal.

“Many of the North’s fishing boats are extremely outdated and are experiencing intense fuel oil shortages, while squid prices in China have gone up due to supply shortages,” the official said. “So each side’s interests have been satisfied.”

North Korea has been hungry for more cash to finance state projects, including a so-called Pyongyang modernization project that involves paving major roads, upgrading railway networks and refurbishing urban streets.

“They are trying to secure more foreign currency through a commercial deal that is not subject to UN Security Council Resolution 1874,” said the official, referring to the UN economic sanctions adopted in June 2009 that involve trade restrictions, cargo inspections and other limits on financial transactions.

The Chinese fishing boats operating in the North’s sea mostly come from Dalian and Dandong, two ports in China’s northeastern coastal region.

“The fishing rights the Chinese boats have secured cover most of the North’s territorial waters on the East Sea,” said another Seoul official. The official expressed concern about possible overfishing by the Chinese, which may affect South Korean fishermen as well.

“Once squid start moving to the south, the Chinese fishing boats will travel farther south, possibly all the way down to Heungnam, Sinpo and Wonsan,” said another South Korean government official, referring to the North’s port cities in South Hamgyong Province.

By Chung Yong-soo [hawon@joongang.co.kr]