A line of Chinese trucks return from North Korea to the Chinese border city of Dandong, China. Large Chinese firms have been doing business with North Korea on a "massive scale," a North Korean source in China said on Wednesday. Photo by Yonhap News Service/UPI
SEOUL, Oct. 5 (UPI) -- More Chinese companies may have been importing banned North Korean raw materials than previously estimated.
Companies suspected of abetting Pyongyang's trading activities now include the Wanxiang Group, which has allegedly imported more mineral resources than Hongxiang Industrial, a Chinese firm that was placed under U.S. sanctions last week.
A North Korea source in China who spoke to Radio Free Asia on the condition of anonymity said a firm like Hongxiang is "just a moderate enterprise" when it comes to Chinese business engagements with the Kim Jong Un regime.
"An investigation into [Chinese] companies doing business after Kim assumed power should capture many large Chinese firms," the source said.
The source also said the Chinese government claimed compliance with sanctions and the suspension of mineral imports, but Chinese companies have been acquiring North Korea's raw materials on a "massive scale."
"The sanctions have actually given more benefits to Chinese companies," the source said.
Beneficiaries include companies like China's Wanxiang Group, which has imported greater volumes of North Korean raw materials than Hongxiang Industrial.
According to the source, Wanxiang has an exclusive importation contract, valid until 2026, with North Korea's Hyesan Youth Mine, a major copper deposit.
Wanxiang is also jointly operating the "Hyejung Mining Joint Venture Co." with North Korea.
The Chinese firm purchases all underground mineral resources in North Korea's Yanggang Province, the source said.
Clandestine trading of North Korean minerals may have played a significant role in the rise of Chinese imports of North Korean coal and iron ore, which increased from January to August, compared with the same time period in 2015, according to China's General Administration of Customs.
The United States and China are currently negotiating restrictions on North Korea trade in the wake of North Korea's fifth nuclear test on Sept. 9, according to Bloomberg.