North Korea has ordered a sweeping state takeover of private businesses operating in state-rented factory and enterprise buildings. The directive reflects growing concern within the leadership that expanding private commerce threatens centralized economic control. Officials framed the move as necessary to halt what they view as creeping privatization.
According to sources inside South Hamgyong Province, the ruling party issued instructions late last month to commercial departments nationwide. Local governments must identify all privately run facilities operating in auxiliary factory spaces. Authorities set a firm deadline, ordering full incorporation into the state commercial network by year’s end.
Officials reportedly believe private operations expanded rapidly in recent years, especially during prolonged economic strain. As markets filled gaps left by state distribution failures, private profits grew beyond state oversight. Consequently, the leadership concluded that stronger intervention was required to reclaim revenue and authority.
Under the new policy, privately operated restaurants, workshops, and service shops will fall under direct state management. Previously, operators paid factories 15 to 30 percent of sales as rent while keeping remaining profits. However, incorporation into the state network would reverse that structure, leaving operators with minimal income.
Private business owners have reacted with anger and fear. A food producer in Hamhung said authorities routinely seize businesses once they become profitable. Others worry the state intends to suppress thriving niche markets rather than regulate them fairly.
Restaurant operators also fear declining service quality under government control. Many built customer loyalty by sourcing ingredients independently and tailoring menus locally. They now expect rigid supply rules and reduced flexibility once city authorities take over operations.
Uncertainty surrounding equipment ownership has further fueled anxiety. Many operators purchased machinery and installations using personal savings. As incorporation begins, they fear the state may confiscate those assets without compensation.
Implementation has already caused confusion at the local level. Officials struggle to enforce the order while maintaining basic commercial services. As a result, tension continues to rise between authorities and business operators.
Analysts view the move as part of a broader effort to roll back informal market autonomy. While private commerce stabilized daily life during hardship, the leadership now prioritizes control over efficiency. The policy signals a renewed tightening of North Korea’s economic management.
