Waiting on the Dear Leader.

By all accounts, "Dear Leader" Kim Jong Il has never visited the North Korean border town of Hoeryong. Not even to pay tribute to his mother. "We have a museum, library, statue, square and even the original house in which she was born," boasts a local resident, referring to the "Mother of Korea"--the late Kim Jong Suk. So what keeps a dutiful son from visiting the people's monuments to his mom? "The city is still poor and not fully developed. Our Dear Leader won't visit such a place."

Fortunately for Hoeryong, and the residents of other dusty towns that dot the Sino-Korean border, Chinese traders are willing to come calling. While the country still relies on foreign aid, and more high- profile economic ventures with South Korea have stalled, the quiet trade along these northerly outposts points toward a way out for the North Korean economy. "Chinese people are in the best position to know what a poor communist country is like. And they know very well how to make money in such an environment," says a Chinese woman who used to work with a North Korean industrial group.

Trade between the communist neighbors reached $740 million in 2001, according to the South Korean trade-promotion body KOTRA. Even better news for these border regions is the fact that areas like Changbai, China, had a 74 percent leap in trade in the first 11 months of 2002. Of course, these figures don't take into account the illegal cross- border trade, which is rampant. Between 1998 and 2000, Chinese officials seized more than 4,000 smuggled automobiles, most of which made their way from Japan--via North Korea--to the Chinese northeast. But the recent completion of a massive Customs house in Tumen suggests the Chinese expect trade volumes to continue to rise: with customs rules reportedly relaxing, there are many more deals being inked between North Korean business delegations and the 1.1 million ethnic Koreans who reside on the Chinese side. ...