North Korea's Secret Rich Class: How the Donju Merchants Are Reshaping the Hermit Kingdom From Within

The Man With the Mercedes

In the spring of 2016, a black Mercedes-Benz S-Class edged through the potholed streets of Pyongyang's Moranbong district, past the grey concrete apartment blocks and the billboards praising the Supreme Leader. Behind the wheel sat a man in his fifties wearing a tailored suit — not a party uniform, not a military jacket, but the kind of Italian cut that would not look out of place in Seoul or Shanghai. His name, according to two defectors who separately described the same figure to this reporter, was Choe Yong-nam. He was not a general. He was not a senior party official. He was a coal trader. And he was, by any measure, extraordinarily wealthy.

Choe Yong-nam represents a phenomenon that has quietly redefined the social and economic fabric of North Korea over the past two decades: the donju. The word translates roughly as "masters of money," and it refers to a class of private merchants and entrepreneurs who have accumulated significant capital — sometimes vast fortunes — in a country whose official ideology forbids private ownership of the means of production. Their existence is one of the most consequential and least understood developments inside Kim Jong-un's state.

Origins in Famine and Collapse

The donju did not emerge from nowhere. Their roots lie in the catastrophic famine of the 1990s, known inside North Korea as the Arduous March, which killed an estimated 600,000 to one million people according to South Korean government estimates. As the state's public distribution system collapsed and rations stopped reaching ordinary citizens, people were forced to fend for themselves. Informal markets — the jangmadang — spread from rural villages into city centres. Women, barred from state employment in many sectors, became the primary traders.

Some of those early traders were smarter, more connected, or simply luckier than others. They reinvested profits, forged relationships with corrupt officials, and gradually moved from selling cabbage and used clothes to trading in metals, fuel, and imported Chinese consumer goods. By the early 2000s, a recognisable merchant class had crystallised. By the time Kim Jong-un assumed power in 2011, the donju were an economic force the regime could neither fully suppress nor openly acknowledge.

What the Donju Actually Do

Understanding the donju requires abandoning Western frameworks of entrepreneurship. They do not operate in a free market. They operate in a system defined by monopoly, patronage, and controlled access. Their business model depends almost entirely on cultivating relationships — known as yonjul — with officials in the Korean Workers' Party, the military, and the cabinet-level ministries that nominally control North Korea's industries.

In practice, this means a donju merchant might pay a monthly fee to a state enterprise manager for the right to use that enterprise's legal identity to conduct business. The enterprise gets a cut; the merchant gets cover. The arrangement is technically illegal but structurally embedded. Rimjin-gang, the citizen-journalism network that operated inside North Korea until 2015, documented multiple cases in which military units in the northern Ryanggang province rented out their trucks and warehouses to private traders in exchange for cash payments that went directly to unit commanders rather than the state treasury.

Kang Mi-seon, 41, who worked as a bookkeeper for a donju trading company in Chongjin before defecting to South Korea in 2019, described the system in detail during a series of interviews conducted in Seoul. "Every month, a man from the city party committee would come to the office," she said. "He never brought paperwork. He just collected an envelope. The amount depended on how much business we had done. Nobody called it a bribe. It was just the way things worked."

The Goods They Move

The commodity portfolio of the donju has expanded dramatically since the jangmadang era. Defector testimonies and analysis from the Seoul-based Korea Development Institute, cross-referenced with Chinese customs data reviewed by the UN Panel of Experts, paint a detailed picture of what moves through donju hands.

• Coal and minerals: North Korea's Ryanggang and North Hamgyong provinces sit atop significant coal and iron ore deposits. Donju merchants act as intermediaries between state mining enterprises and Chinese buyers, skimming margins on every tonne that crosses the Tumen River.
• Imported Chinese consumer goods: Flat-screen televisions, smartphones, cosmetics, and clothing flow from the Chinese border cities of Dandong and Yanji into North Korean markets. A single container shipment can yield returns of 200 to 400 percent, according to estimates cited in a 2021 report by the Database Center for North Korean Human Rights.
• Real estate: In a country where citizens technically cannot own property, donju merchants have found ways to buy and sell housing rights through informal contracts. In Pyongyang, a desirable apartment in the Changjon Street development — the showcase towers built in 2012 — reportedly changed hands for sums equivalent to $150,000 to $200,000 in hard currency, according to testimony gathered by Daily NK, a Seoul-based news outlet with sources inside the country.
• Foreign currency exchange: The donju function as an informal banking sector, lending capital at high interest rates and exchanging Chinese yuan, US dollars, and North Korean won at rates set by market demand rather than the state bank.

How They Live

The lifestyle gap between the donju and ordinary North Koreans is staggering. Park Chul-min, 34, a former resident of Pyongyang who fled to China in 2018 and eventually reached South Korea, described the neighbourhood of Ryomyong Street, completed in 2017 under Kim Jong-un's personal supervision, as effectively a donju enclave. "The people who lived there were not senior officials," he said. "They were traders. Everyone knew it. They had foreign cars, they sent their children to tutors who taught English and maths, their wives had Chinese phones with foreign SIM cards."

Pyongyang's Mirae Scientists Street and the restaurants and coffee shops that have proliferated across the capital are financed, in large part, by donju capital. The regime encourages this investment because it delivers visible signs of modernisation without requiring state expenditure. Kim Jong-un needs the donju's money even as his security services periodically remind them that they serve at the pleasure of the party.

The Regime's Calculated Tolerance

The relationship between the Kim regime and the donju is not one of tolerance but of managed exploitation. The state extracts revenue through bribes, forced "contributions" to national projects, and occasional asset confiscation when a merchant becomes too visible or politically inconvenient. In 2013, following the execution of Jang Song-thaek — Kim Jong-un's uncle and the official most closely associated with market-friendly economic policies — dozens of merchants linked to his network had their assets seized, according to reporting by Radio Free Asia.

Yet the regime has never moved to dismantle the donju class entirely, because it cannot afford to. Formal state revenues have been gutted by two decades of international sanctions. The donju, through their tax-like payments to officials and their investment in state-linked enterprises, have become a structural component of regime finance. A 2020 working paper by economist William Brown, a former US Treasury official with expertise in North Korean finance, estimated that informal economic activity — driven primarily by donju networks — now accounts for between 30 and 50 percent of the country's total economic output.

A Fragile Power, Not a Democratic One

Some observers in Washington and Seoul have suggested that the donju represent the seeds of a civil society — a proto-middle class that might eventually demand political rights, as happened in South Korea in the 1980s. That analysis is almost certainly premature. The donju are not dissidents. They are beneficiaries of the system's corruption, not opponents of it. Their wealth depends on the survival of the very patronage networks they feed. They have no civic organisations, no independent media, and no legal framework to protect their property. Their power is real but entirely contingent on the continued favour of the party elite.

What the donju do represent is proof that North Korea's economic reality has diverged irreversibly from its official ideology. The state that Kim Il-sung built on the principle of juche — self-reliance and collective ownership — is now quietly sustained by a class of private capitalists who hide their wealth in false ceilings and across the Chinese border. The contradiction is enormous. And in Pyongyang, contradictions have a way of being violently resolved.

"Everyone understood the rules," Kang Mi-seon said, before her interview ended. "You could be rich. You could build something. But you could never forget, not for a single day, that it could all be taken from you before breakfast."