Property

Crossing the Yalu

Will Dandong become a northeastern Shenzhen?

Kim-Jong-Un-w

Unlikely source of a property boom

Six weeks ago an armoured train carrying the North Korean leader Kim Jong-un rattled across an old iron bridge over the Yalu river and passed through the Chinese border city of Dandong on its way to Beijing.

This week, Kim again travelled to meet Chinese leader Xi Jinping, this time flying to the northeastern coastal city of Dalian, as he prepared for a summit with US president Donald Trump in June.

For Dandong, whose fortunes have long been tied to the fate of the Korean peninsula, this new era of rapprochement has had an immediate impact: people have begun flooding into the once desolate ‘New Town’ area to buy up property in the hope that North Korea will finally open up its economy.

Prices of apartments in the development on the banks of the Yalu – which forms the border with the ‘Hermit Kingdom’ – have almost doubled since Kim and his South Korean counterpart Moon Jae-in reached a historic peace pact at Panmunjom last month.

It’s a far cry from the height of the tensions at the end of 2017 when China was reported to have started building camps in Jilin province in case war broke out and thousands of refugees poured over the border. A newspaper in the same province even published a full-page guide on how to survive a nuclear explosion. And in Dandong, government agents carried out a drill involving a scenario where nuclear material arrived by truck over the China-North Korea Friendship bridge.

A new, multiple-lane bridge across the Yalu from Dandong New Town was completed a couple of years ago, but it has never opened because North Koreans didn’t connect it to the road system on their side.

It was around that time that Dandong’s New Town area began to be referred to as a “ghost town”.

Today, however, Chinese newspapers are referring to the city as “the northeastern Shenzhen”. Investors are piling in, hopeful that UN sanctions against North Korea will be lifted and that Kim will now focus on economic development.

Such is the increase in demand for Dandong real estate that the property registration office has had to extend its opening hours and cancel weekend leave for its staff. A notice pinned to the office door in late April said the centre could only handle 260 applications per day and that it had introduced an appointments system to prevent overcrowding.

Local real estate companies say they have been inundated. One report in the Securities Times quoted a taxi driver from Tianjin who bought four apartments in the new town for Rmb3,500 ($552) per square metre at the end of April. He then returned a few days later to buy more but was told the price was now Rmb5,500 per metre.

Another man, a shopkeeper in Beijing, bought an apartment there three years ago for his retirement. He say it has doubled in value in the last few weeks. “It was a real risk when I bought. If North Korea opened up I knew I would be rich. If war broke out my apartment would be one of the first to be hit by artillery,” he told WiC.

Close to 70% of China’s trade with North Korea goes through Dandong, yet despite the proximity to a volatile neighbour the city is also emerging as a retirement hub because of its coastal climate.

Since China began enforcing UN sanctions last August trade between North Korea and China has largely dried up. North Korean businessmen and waitresses, previously a common sight in Dandong, have mostly returned home too.

Chinese entrepreneurs are also tetchy. Many failed to get their goods out of North Korea before the sanctions hit. In August Dandong’s seafood traders protested because trucks carrying their highly-prized North Korean crab and shrimp were blocked from passing customs.

Yet many in the northeast now feel it is only a matter of time before things get back to normal.

One hope is that Dandong acts as a “special zone” in helping North Korea open up. “The economic development of Dandong is closely related to the trade with the DPRK… If trade between China and the DPRK develops well the city with the most to benefit is Dandong,” the Securities Times quoted a Chinese researcher as saying.


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