Other prominent studio names include Paekho and the Central Arts Studio. Paekho, which means "white tiger" in Korean, is the biggest seller of popular paintings in Dandong, traders there said. Collectors who have dealt with Paekho say it is run by North Korea's military - Reuters could not independently establish this. Paekho's varied output includes propaganda posters calling for a nuclear-free world.

The Dandong center that Reuters visited has hosted around 500 North Korean artists since 2014, manager Gai said. They stay for between six months and three years.

Many Dandong galleries house North Korean painters. Staff there said they have sold North Korean paintings for as much as $100,000 to buyers around the world. Art experts agree the pieces can very occasionally fetch six-figure sums.

Not all the proceeds go to Pyongyang. Mark-ups can reach four or five times the dealer's purchase price, according to one Dandong dealer.

Long Game

While the Security Council's Aug. 5 sanctions targeted only Mansudae, its September resolution on joint ventures also included restrictions on North Korean labor: This combination could hurt everyone in the art business, Dandong traders say.

But there are ways around the measures, they add. For instance, paintings from Mansudae could be sold under the name of an art studio that hasn't been sanctioned. Artists come to China under cultural exchange visas, not as workers. And two businessmen said paintings have long been accepted instead of cash in the barter deals that fuel the region's economy.

At the other end of the border from Dandong in the city of Yanji, Chinese antiques dealer Zhao Xiangchen said people usually roll up a couple of paintings and carry them quietly across the border to him.

His antiques stall was thick with dust as he camped in a vacant slot next door, selling the paintings online.

Since the sanctions were announced, Zhao said, Chinese customs have become more vigilant.