Textile companies in China are increasing their use of factories in North Korea due to less expensive labor in the secretive nation, said businesses and traders in Dandong a city on the border between the two countries.
The clothes that are made across the Chinese border in North Korea had labels on them that say Made in China, and are exported to different places around the world.
By using workers in North Korea to make inexpensive clothes that are sold around the world shows that for each door closed by the ever-tightening sanctions by the UN, another opens.
The sanctions by the UN, introduced as punishment for North Korea for its nuclear and missile programs, does not include bans of any kind on exports of textiles.
One businessman who is Korean-Chinese said the company takes orders from across the globe. He is located in the border city of Dandong where most of the trade from North Korea passes through.
Clothing agents in the dozens operate in the city of Dandong, as go-betweens for the clothing suppliers in China and the buyers from Europe, the U.S., Canada, Russia and South Korea.
Textiles were the second largest export for North Korea trailing only coal and other types of minerals last year, totaling more than $752 million, showed data from KOTRA the Korea Trade Investment Promotion Agency.
Total North Korea exports during 2016 increased by 4.6% to more than $2.82 billion.
The latest sanctions by the UN, there earlier in August were agreed to, have banned exports of coal completely.
Its flourishing industry for textiles shows how the impoverished country of North Korea has been able to adapt, embracing some market reforms, to sanctions dating back to 2006 when it made its first nuclear device test.
The industry shows as well the extent to which the secretive nation relies on its neighbor China to be an economic lifeline, even as pressure is piled on Beijing by the U.S. to enact more to rein in the weapons programs of its neighbor.
Exports from China into North Korea increased nearly 30% during the first six months of 2017 to over $1.76 billion, driven largely by textile materials as well as other labor intensive goods that are not included in the embargo list of the United Nations.
Suppliers in China send fabrics along with other types of raw materials required for when manufacturing clothing, to factories in North Korea where garments are then made and exported.