CINA

May 9 issue - On a warm spring day, a small boat is maneuvering down a narrow tributary of the Yalu River that marks the border between China and North Korea. The sightseers in the craft are in search of an unusual quarry. "Look, there they are," says the boat's Chinese owner. And sure enough, coming down the opposite bank are two young North Korean border guards in olive-drab uniforms, both bareheaded, one of them toting a Kalashnikov rifle. The prow touches the shore, and one of the passengers—a NEWSWEEK journalist—steps out briefly onto North Korean territory to shake hands with the two soldiers, who nod and offer greetings. The Northerners happily accept a gift of South Korean cigarettes and Chinese cash in return for allowing the brief foray into their country. But there's something else they'd like to have as well, they say: movies and TV shows from South Korea. Videotapes or DVDs? Either one, say the soldiers. "Comedies or action?" asks the visitor. "It doesn't matter," answers a soldier. "Just bring a lot."

Extraordinary as it may sound, such encounters are par for the course along China's 1,416-kilometer-long border with North Korea these days. The Hermit Kingdom, it's now clear, is no longer hermetic. (...)

North Korea, long one of the world's most isolated societies, has grown vulnerable to the flow of information from the outside world. North Koreans are watching Western movies on hidden video players and tuning in to Korean-language broadcasts from the South on illicit radios. In the border regions, mobile phones are ubiquitous, meaning that some defectors can keep in touch with their families back home. Much of this information is making clear to North Koreans that there is a vast prosperity gap between their society and the South's.

It's not known if the greater awareness yet poses a threat to North Korea's dictator, Kim Jong Il. But it's certainly giving more North Koreans reason to nurse discontent with their government. That, in turn, is spurring more and more of them to seek their luck abroad by defecting, which can only intensify the pressure on the Great Leader. Last year a record 1,850 Northerners arrived in the South. "The West often regards North Korea as an immobile society, a black box," says Andrei Lankov, a Russian-born expert on North Korea at Kookmin University in Seoul. "But it's clear that North Korea is changing. North Korean Stalinism is dying."

The changes are real. Just take the story of Lee So Young (not her real name), a 33-year-old mother of one who defected from North Korea five years ago. She's one of an estimated 200,000 North Koreans living illegally in the border area. She's hiding in the Chinese city of Yanji as she awaits a chance to reach a new home in South Korea. In her account, it's money, not ideology, that does the talking inside North Korea these days. That's what helped her to cross the border seven times in five years. "The border guards are completely corrupt," she says. "Even South Koreans can go in if they want. All you have to do is give them some money." Lee's tiny Chinese-made phone cost her $6, and in February she smuggled another one across the border to her mother. It costs a mere $1.20 per month to keep her mother's phone active, and Lee is about to send in a fresh prepaid card just to be on the safe side. "The number of the old phone I gave her is known. So now she'll have a new number."

North Korea's information revolution is rooted in economics—and in particular, its fast-rising trade with China. Last year trade volume between the two nations reached $1.4 billion—a jump of 40 percent over 2003. "People sell and buy things," as Lee puts it. "Now it's allowed. If you sold something before, they'd confiscate it." In the summer of 2002, Kim's government enacted a set of cautious economic reforms that have triggered an explosion of mercantilism. Those have in turn created a new merchant class—consisting largely of government officials—and fomented corruption. They've also generated a modest wealth for some while leaving most people mired in poverty. One of the most visible sign of the changes: markets filled with goods from China and even South Korea, brought in by the prosperous new class of border-crossing businesspeople. Even for Northerners who can't afford them, the high-priced imports—including refrigerators, clothes and vegetables—are inspiring yearnings for a better life.

The city of Dandong, China, which has a population of 700,000, has become the window on the outside world for North Korea. There, North Korea's main rail line and highway enter Chinese territory via a majestic bridge spanning the Yalu. It's a key destination for anyone in the North with a scheme to make money. Fifty to sixty North Korean trucks cross the border every morning, then return in the evening loaded with officially approved imports ranging from food to heavy machinery. Many of the truckers have built a little side business in car parts. At the loading depot in Dandong, local merchants happily fill the drivers' orders for spare car parts, which are delivered individually to each truck before it departs. The parts are then sold in North Korea for a big profit. At a waterfront restaurant in Dandong, three men from the North Korean national railway dine out on a meal of sashimi, clams and beef, along with copious amounts of booze. Estimated tab: $100. How can they afford it? "We take things back and forth," crows a boozy conductor. His job—making the monthly round trip from Pyongyang to Moscow—offers limitless opportunities for bringing goods (officially sanctioned and not) back into the North from its capitalist neighbors.

At the Gome Electronics Store in downtown Dandong, salespeople count North Koreans among their most faithful customers. "They're always wearing their little pins," says Shi Hui, a Gome salesgirl, referring to the obligatory badges featuring portraits of North Korean founding father Kim Il Sung. "They always come with their interpreters." One very popular item: video CD players that sell for less than $30. Some of Shi's customers buy four or five at a time. "They say they're going to resell them in the North," she says. Home stereos, TVs, and, yes, the obligatory mobile phones are also selling strongly—and at the same surreally low prices, thanks to Chinese overproduction.

Much of the border area is inhabited by ethnic Koreans with strong ties to the South. As a result, South Korean soap operas and movies, popular throughout Asia, can be purchased on every corner and are easily smuggled into the North. "They take the discs but they throw away the boxes," says Wang Dan, a saleswoman in a Dandong music store that regularly sells South Korean videodiscs to Northern customers. The resulting inflow of outside culture is impossible to stem—and one result has been the irrevocable destruction of Northern propaganda stereotypes about the South, which was always depicted as a wasteland of poverty, shantytowns and unemployment. Choi Ji Won (not her real name), 43, repeatedly crossed into China to work before defecting for good 10 months ago. "Whenever I was here, I watched South Korean TV," she says. "Then when I went back to the North, I told my relatives about it. They realized it's a great place to live, and now they want to go, too." According to recent visitors to the North, Pyongyang university students have taken to dyeing their hair chestnut in accordance with the latest college fads in Seoul.

In the old days, any North Koreans lucky enough to get a foreign-made radio had to register it with the local police. Authorities then fixed the tuners to a single frequency that supplied only Pyongyang-approved broadcasts. Now, though, radios are everywhere, and officials can be bribed to leave tuners unaltered. When South Korean broadcaster KBS surveyed defectors living in the South two years ago, 67 percent said that they had listened to South Korean radio when they were living in the North. Internet use in the North is still limited to a precious few. But the growing number of Northerners lucky enough to travel to China can easily pop into cheap Internet cafes to peruse South Korean web sites.

Kim Jong Il's policy of a limited opening is risky but necessary. Trade with China doesn't just help his moribund economy, but also boosts his ties with a powerful partner who offers a desperately needed diplomatic counterweight to the United States and Japan. (China welcomes the trade with the North as a way of promoting economic growth in its three northeastern provinces, which have long lagged behind more vibrant southern China.) But the potential threat to Kim's leadership is huge. "North Korea wants to keep the booming trade with China from undermining its stability," says Park Young Ho, an analyst at the Korea Institute for National Unification in Seoul. "But it's a very tough job. Trade and stability are two different things."

Kim's minions lately have been battling to stem the tide. At the end of 2003 the ruling Korean Workers' Party published a series of edicts pledging to "fight vigorously against moves to spread unusual recorded objects and publications" and "to carry on the fight against smuggling activities." Penalties for harboring information about the South, in particular, can include long terms in prison. The security services have formed mobile squads to nab people viewing illegal videos. "They cut off the power so that the disc stays in the machine and can't be hidden," says defector Lee.

There is an even more ominous trend: According to defectors interviewed by NEWSWEEK, Pyongyang is using public executions to discourage defections. Brokers involved in moving people across the border are often the targets. Two covertly recorded videotapes recently smuggled out of the North show three people being shot (in two separate incidents) in the city of Hoeryong on March 1 and March 2. Lee says the authorities stage the executions in marketplaces and force residents to watch. "You have to go. If you don't, they say you don't agree with the government's decision.

It's possible that Kim will succeed in tamping down the forces of discontent bound to be generated by knowledge of the outside world. But the odds are against it. "North Korea reminds me of the USSR in the 1970s," says analyst Lankov. "Officials are paying lip service to the ideology but what they actually do is very different." Like most experts on the North, he's reluctant to issue a expiration date for the North Korean regime. But, he adds, "the genie is out of the bottle—and Kim will have a hard time putting it back in." The dictator surely knows that himself.

With Hideko Takayama in Tokyo