April 10 (UPI) -- A Chinese company that once conducted brisk business at a border city facing North Korea is in court receivership as sanctions against Pyongyang may have significantly reduced economic activity in the area.
Dandong Port Group, a port management company in northeast China, is in corporate recovery as other Chinese companies face business difficulties, Yonhap reported Wednesday.
According to Chinese state media in Dandong, an Intermediate People's Court in the Chinese border city accepted a proposal submitted by the company's creditors to rehabilitate the company.
The court ruled the Chinese firm has lost its ability to repay its debts. The company, after being unable to reach a compromise with major creditors, would need to undergo corporate recovery, reports state.
China's 21st Century Business Herald reported the firm has about $6 billion of debt.
The company, which enabled the transportation of North Korean exports of coal and iron ore to China, also defaulted on $150 million of debt in October 2017, as Pyongyang faced stiffer penalties for nuclear weapons development.
Dandong Port Group and other Chinese companies have sharply reduced overall trade with North Korea.
China's customs office data show trade between China and North Korea declined by more than 50 percent from 2017 to 2018. Imports of North Korean material plunged 88 percent.
As trade declines, farmers in North Korea producing livestock have been able to sell what they raise in the domestic market.
Cho Chung-hui, a South Korean researcher with Good Farmers, a North Korea aid society, said North Korean farmers who raise livestock as a side business have been able to increase sales.
About 80 to 90 percent of meat on the North Korean market comes from private livestock farmers, Cho said, according to Seoul Pyongyang News.