Written on May 14, 2019, this essay, based on reporting by Tatsuya Kato in the Sankei Shimbun, examines signs that North Korea’s privileged class has begun moving assets into secret accounts in Dandong, and through China’s calculated decision to watch while fully aware of these movements, portrays the hidden maneuvering surrounding instability within the North Korean regime and preparations for a post-collapse order.

2019-05-14
It is said that members of the privileged class embezzle part of the earnings that North Korea-related figures are sending back to the North, deposit them into their own accounts, and accumulate wealth, but what is particularly interesting is that the Chinese side is aware of these movements and yet is leaving them alone.
The following is from Tatsuya Kato’s serialized Sankei Shimbun column, “Nothing Ventured, Nothing Gained,” published in today’s paper.
Reading this, I thought that North Korea is just like the yakuza.
It is the traditional form of the Korean Peninsula…
It does not even constitute a real state.
How unspeakably foolish Asahi Shimbun and the so-called men of culture led by Kenzaburo Oe were, having praised such a country for so long after the war as a paradise on earth.
And how foolish and bitter it is that Japan was dominated by them and by NHK until August five years ago.
Are Even Senior North Korean Officials Conscious of Collapse?
Secret Accounts in Dandong
Kim Jong Un, Chairman of the Workers’ Party of Korea, has recently lacked brilliance in diplomacy.
The Russia-North Korea summit on the 25th of last month was dismissed by a Russian newspaper as having contained “nothing surprising.”
And at the end of February, at the U.S.-North Korea summit which he attended carrying expectations of “complete sanctions relief,” he ended up being pressed by the Trump administration to hand over his nuclear weapons.
Perhaps because even this “third-generation” ruler can no longer draw a bright future, movements have been detected among the North’s privileged class that seem to suggest they are conscious of collapse, attracting the attention of the countries concerned.
North Korea’s foreign currency earnings are said to be handled by the specialized organ known as “Office 39.”
In September 2016, Kim Jong Un went ahead with his fifth nuclear test, and the sanctions imposed by the United Nations on that basis included companies and individuals connected with foreign currency acquisition, greatly restricting such activities.
They seem to be inflicting “intense pain” on Kim Jong Un and the core of his regime.
Oh Chong Song, a defector and former North Korean soldier whom the writer interviewed last November, testified that in North Korea a salary-based compensation system effectively does not exist.
Another defector living in Seoul revealed, “Residents of the North live by obtaining money and goods through skimming and extortion according to the size of their power.
Power is the source of livelihood.”
According to this defector, for the class that supports the regime at its core, the money and goods bestowed by Kim Jong Un from “governing funds (foreign currency)” are also a major source of daily living.
Under the leader’s “patronage,” the amount of such benefits determines the privileged class’s degree of loyalty to the regime.
North Korea is more severe than capitalist society when it comes to “the end of money.”
That may be why Kim Jong Un has in fact spent money very generously up to now.
After assuming leadership, he adopted a strategy aimed at pulling the United States into nuclear disarmament negotiations on equal terms, and sought to complete an intercontinental ballistic missile capable of directly striking the U.S. East Coast.
Suspicion has even arisen that he purchased high-performance rocket engines from Ukraine together with the engineers, and considering how rapidly North Korea’s nuclear and missile capabilities improved, the sources from which it purchased expensive technology must be wide-ranging.
At the same time, Kim Jong Un also pushed forward with the development of domestic living and leisure infrastructure such as high-rise housing, a large-scale ski resort, and amusement parks, but these were probably the kind of “bestowed services” intended to please the privileged citizens of Pyongyang.
However, with foreign currency difficult to obtain under sanctions and a large amount of governing funds having been spent, multiple North Korean sources have pointed out to Japanese government-related institutions that Kim Jong Un is now unable to keep up with fundraising.
It is even said that after returning from Vietnam, Kim Jong Un was seen dead drunk.
Could this too be due to worries over financing?
On the Chinese side of the Yalu River, the river that forms the China-North Korea border, there is a city called Dandong.
It is famous as a major hub of China-North Korea logistics, while also being regarded as a loophole in the economic sanctions against North Korea.
According to multiple intelligence officials, including from the United States, in recent times the North has come to regard Dandong as an escape route in the event of a North Korean emergency, and there has been a noticeable movement by officials of the Party’s Organization and Guidance Department, a core organ, to open secret accounts at local banks.
It is said that members of the privileged class embezzle part of the earnings that North Korea-related figures are sending back to the North, deposit them into their own accounts, and accumulate wealth, but what is particularly interesting is that the Chinese side is aware of these movements and yet is leaving them alone.
China is also aware that North Korean elites have already secured places of refuge farther inland than Dandong.
China presumably sees Dandong as the escape route that senior officials and the wealthy will use when the North collapses.
Western intelligence sources believe that “China has many intelligence operatives active in Dandong.
It intends to use them as monitors to obtain the earliest possible information on movements when North Korea collapses.
It may also be considering whether to protect or detain escapees and use them as cards to intervene advantageously in the situation of the post-Kim Jong Un regime.”
It seems that the situation is moving dynamically beneath the surface.