Luxury goods surge in North Korea as deepening poverty widens inequality

North Korean leader Kim Jong-un, fourth from left, attends the completion ceremony of the Wonsan Kalma beach resort, June 24, with his wife Ri Sol-ju, left, and daughter Ju-ae, third from left. Ri is seen carrying what appears to be a black Gucci handbag. Yonhap

North Korea’s wealth gap is reportedly widening, as luxury goods circulate among affluent border residents while ordinary citizens face growing extreme poverty.

According to Daily NK on Nov. 22, economic disparities in areas near the Chinese border have become more pronounced compared with the period before trade resumed.

In cities such as Hoeryong in North Hamgyong Province and Hyesan in Ryanggang Province, cross-border commerce through customs offices has increased, and the number of high-end luxury items brought in by ethnic Chinese traders has risen.

Among the goods now circulating openly inside North Korea are Chanel cosmetics and perfumes, which were once smuggled in small quantities as gifts for senior officials. The outlet reported that members of the emerging wealthy class, commonly known as "donju," are now purchasing global luxury brands themselves.

In Sinuiju, which borders the Chinese city of Dandong, fur coats have become popular among affluent women as winter approaches.

While politically connected elites accumulate more wealth through expanded trade with China, living conditions for ordinary residents in the same border regions appear to be worsening.

A source in Ryanggang Province told Daily NK that many households can no longer afford basic winter insulation. “In previous years, families would put up plastic sheeting by this time of year, but this winter the price is too high and many cannot even consider buying it,” the source said.

In one neighborhood unit in Hyesan with about 30 households, only three were able to buy new sheeting, while two reused old material from last year. Plastic sheeting costs about 15,000 North Korean won per square meter, roughly equivalent to the price of 500 grams of rice in local markets — a cost many cannot justify amid ongoing food shortages.

Experts note that although inequality emerged in the early 2000s with the rise of informal markets, the recent “politicization of capital” poses new risks to the regime. Wealthy groups with political connections have strengthened their economic power, while the poor grow more resentful of the system.

The Daily Mail recently reported on the public execution of a couple in their 50s who had amassed significant wealth through a motorcycle and bicycle repair and rental business. North Korean judicial authorities described the execution as a “warning to maintain economic order and educate the masses,” according to the report.

Hong Min, senior research fellow at the Korea Institute for National Unification, said the expansion of economic cooperation between North Korea and China has created structures allowing so-called “political capitalists” to accumulate greater profits.

“If the already deep sense of deprivation among ordinary residents continues to intensify, the likelihood of serious public discontent also grows,” he said.

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by generative AI and edited by The Korea Times.