North Korean workers make soccer shoes in a small factory in a village on the edge of Dandong city, Liaoning province, China in October 2012.

Merchants and businessmen in Dandong, a city on China’s border with North Korea, said Chinese textile and garment businesses are increasingly hiring factories in North Korea to take advantage of cheap labor, according to Reuters.

Clothing made in North Korea is labeled `Made in China` and exported abroad, showing that doors remain open to North Korea after UN sanctions.

`We receive orders all over the world,` said an ethnic Korean Chinese businessman in Dandong who spoke on condition of anonymity.

Dozens of clothing dealers in Dandong supply Chinese clothes to customers from the US, Europe, Japan, Korea, Canada and Russia, he revealed.

`We will ask our Chinese dealer partners if they want to inform customers about the origin of the goods. Because sometimes buyers do not realize the clothes are produced in North Korea. This is a problem.

According to data from the North Korea Trade Promotion Agency, in 2016, textiles were the country’s second largest export item after coal and minerals, with a total value of 752 million USD.

According to new UN sanctions earlier this month, North Korea is completely banned from exporting coal.

The prosperous textile industry shows how flexibly North Korea has adapted to international sanctions.

The value of Chinese goods exported to North Korea increased nearly 30% to $1.67 billion in the first half of this year, with the majority of exports being garment materials and labor-intensive goods.

Chinese suppliers ship needed fabrics and raw materials to North Korean factories across the border.

Factory

Last year, Rip Curl, an Australian sports brand, publicly apologized when it discovered that some ski clothing labeled `Made in China` originated from a garment factory in North Korea.

However, traders and agents in Dandong say it is very common.

Some North Korean factories are located in Siniuju, a border city with Dandong.

North Korea has about 15 large garment export enterprises.

Every factory in North Korea is state-owned.

`We are trying to order clothes in North Korea but the factories are full of orders,` said a Chinese businessman with a factory in Dalian, a port city two hours by train from Dandong.

`North Korean workers sew 30% more clothes a day than Chinese workers,` he said.

North Korean female workers assemble soccer shoes in a small factory in a village on the edge of Dandong city, Liaoning province, China in October 2012.

The salary workers in North Korea receive is also lower than in many Asian countries.

Chinese workers

Chinese clothing manufacturers are increasingly using North Korean factories even after relocating factories abroad, to countries like Bangladesh or Cambodia.

`Worker wages in China are too high. It’s easy to understand why many orders are made in North Korea,` said a Chinese businessman in the garment industry in Dandong.

Chinese textile companies are also hiring thousands of cheap Korean workers to work in China.

According to Mr. Cheng Xiaohe, an expert on North Korea at Beijing’s Renmin University, China does not disclose official figures on the number of North Korean workers working in factories and restaurants in the country, although

In a factory with 40 North Korean workers in Dandong, workers are completing small orders for customers who request items not made in North Korea.

Their income is about $300, half the average salary of Chinese workers, the factory owner said.

The workers are all female, wearing pink and black uniforms, sitting close together under four rows of sewing machines, assembling a batch of black winter coats.