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China has a front-row seat to North Korea’s possible economic opening

Nowhere are people more excited and optimistic about Pyongyang opening up than on China's border with North Korea. Betting on denuclearization, investors have started speculating in the real estate market, while local businesses are hoping for a windfall. Special correspondent Katrina Yu reports.

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  • Judy Woodruff:

    As the nuclear showdown with North Korea has eased, there is economic optimism growing in the North's most important ally, China, and especially on its border with North Korea.

    Investors have started speculating in the property market, and local businesses are hoping for a windfall.

    Special correspondent Katrina Yu reports from the Chinese port city of Dandong on the Yalu River, separating China and North Korea.

  • Katrina Yu:

    North Korea, as seen from boats setting sail from China's border city of Dandong.

    This week, thousands have taken these half-hour tours, offering curious tourists a glimpse of life in one of the world's most secretive and closed countries. From all across China, visitors are flocking to this port city, to historic hot spots, like the remains of a bridge built during the Korean War used by Chinese soldiers to join forces with their North Korean comrades to fight South Korea and the Americans.

    Last year was marked by weapons tests and fears of conflict, but here in Dandong today, they no longer view North Korea as a war zone, but as a travel opportunity.

  • Woman (through translator):

    I would like to see how different it is, what the people are like, and try the food. Especially looking forward to the food.

  • Woman (through translator):

    The relationship is progressing positively I think, very friendly. Friendship forever.

  • Katrina Yu:

    It's a cue being taken from the very top. President Xi Jinping hosted North Korean leader Kim Jong-un, for the third time in three months. Chinese state media are touting strengthening ties, Kim's new focus on the economy and his willingness to learn from Beijing's brand of socialism, with Chinese characteristics.

  • Geng Shuang (through translator):

    China supports North Korea's economic development and improvement in people's livelihood. And we support North Korea in taking a road that suits the country's situation.

  • Katrina Yu:

    And that road ahead is paved with gold, at least according to property investors.

    Dandong real estate prices have doubled in recent months. The main selling point? These are North-facing properties, North Korea-facing, that is, and a front-row seat to its possible economic opening.

    Providing entertainment and seafood, the real estate developers here are really trying to create a sort of Dandong Riviera, but the highlight is just over there, a view of North Korea.

    New developments are booming all over Dandong, one of the most popular, Singapore City, named for the city-state where Trump and Kim held their summit. First built in 2008, it's proving a fortunate coincidence. Apartment sales quadrupled in the lead up to the historic meeting.

  • Man (through translator):

    Buildings four, five, six, eight and 10 sold out.

  • Katrina Yu:

    Sold mostly to wealthy speculators from China's south, betting on the North soon opening up.

    Sales agent Luan Gui Hong says it's bad news for locals, suddenly squeezed out of the property market.

  • Luan Gui Hong (through translator):

    Politics definitely has an impact. And people are watching developments. I was speaking on the phone with one property owner who told me, Trump and Kim have signed an agreement. I can't sell for so cheap.

  • Katrina Yu:

    Mr. Trump's meeting with Kim has helped boost prices, but here it's Beijing's relationship with Pyongyang which really counts. Ties reached a low point late last year, after China enforced United Nations sanctions against North Korea for continuing its weapons testing.

    Dandong's Friendship Bridge, the main thoroughfare for those trading in seafood, textiles and other goods, is today mostly quiet. Restrictions also hit hard on Dandong's Korea Street, a shopping area popular with North Korean traders.

    But after months of slow sales, business has improved in recent weeks. While sanctions remain in place, analysts say they're being implemented less stringently.

    Michael Kovrig, senior adviser for Northeast Asia for International Crisis Group, explains.

  • Michael Kovrig:

    As long as North Korea is not disturbing the peace, that's good enough, and China is willing to see denuclearization as a long-term goal.

    The actual rigor with which China is inspecting customs at the border, to what extent are police actually cracking down on smuggling, to what extent is there enforcement of those sanctions, I think it's pretty clear that that has relaxed quite a bit.

  • Katrina Yu:

    When we visit Helen Zhou's beauty and health store, she's serving a woman from Pyongyang. Only the most privileged from the DPRK can afford to shop here.

  • Helen Zhou (through translator):

    More North Koreans are coming back, many more than we had last year.

  • Katrina Yu:

    Makeup and vitamins are top sellers, luxury goods for North Koreans. Should North Korea open up its economy, the opportunities for local business owners would be endless, she says.

  • Helen Zhou (through translator):

    They don't know anything about modern society. They would need us to go there and educate them about new products.

  • Katrina Yu:

    But the optimism isn't shared by all. Many shopkeepers refused to speak to the "NewsHour."

    One local was all too happy to explain why, saying many are exhausted by the drama playing out on the world stage.

  • Man (through translator):

    These leaders in America and North Korea, they change their minds so frequently. They're unreliable.

    We all like peace. Right? We all like peace. That's the end aim.

  • Katrina Yu:

    Despite the positivity over property and from the press, those in Dandong understand that banking on North Korea is a gamble.

    But if the sanctions are lifted and the closed country does open up, it will be seen and felt first here by the new Yalu River Bridge.

    The $330 million project stands half-completed, abandoned following funding disagreements with the North. There are rumors that construction on the bridge will soon restart and eventually connect Dandong not only with Pyongyang, but South Korea's capital, Seoul. It's a hope the city has invested in. The roads are built, shop spaces ready.

    All that's left to do is watch and wait.

    For the "PBS NewsHour," I'm Katrina Yu in Dandong, China.

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