For most of her life, Kim Hui Suk had spouted the sayings of North Korea's founder Kim Il Sung and never for a moment harbored a doubt: Capitalists were the enemy. Individualism was evil.

But then disaster rained down on her hometown, Chongjin, on North Korea's remote east coast in the early 1990s. Chongjin's outmoded and inefficient factories had limped along on spare parts and cheap oil from the Soviet Union. When the communist bloc collapsed, suddenly there was no fuel for the power plants. Factories stopped.

Farms couldn't produce because they depended on chemical fertilizers and electric irrigation systems. Heavy rains and floods in the summer of 1995 exacerbated a famine already under way.

Food rations stopped. Watching her family slowly succumb to the famine - her mother-in-law, husband and son eventually would die of starvation - Kim realized she had to change.

Once a stickler for following the rules, she bribed a bureaucrat so she could sell her apartment. Then, with no business skills other than the ability to calculate on an abacus, she used the proceeds of the sale to set herself up in a black-market business, hawking biscuits and moonshine she brewed from corn.

Kim could have been sent away for life for such crimes. But obeying the rules would have meant a death sentence.

``The simple and kind-hearted people who did what they were told - they were the first to die of starvation,'' said Kim, a soft-spoken grandmother who now lives in South Korea and has adopted a new name to protect family members still in the North.

The famine that killed two million North Koreans in the mid-1990s and the death of the nation's founder, Kim Il Sung, in 1994 sparked vast changes across the secretive communist country.

Markets are springing up in the shadows of abandoned factories, foreign influences are breaching the borders, inflation is soaring and corruption is rampant. A small nouveau riche class has emerged, even as a far larger group has been forced to trade away everything for food.

This is the picture of life in North Korea as painted by more than 30 people from Chongjin, the nation's third-largest city. Some are defectors living in South Korea. Others were interviewed in China, which they had entered illegally to work or beg. Accounts of aid workers and videos taken illegally in Chongjin by disgruntled residents also were used to prepare this report.

Although the North Korean regime has a reputation as the ultimate Big Brother, people from Chongjin say the public pays less and less heed to what the government says. There is little that might be called political dissent, but residents describe a pervasive sense of disillusionment that remains largely unspoken.

``People are not stupid. Everybody thinks our own government is to blame for our terrible situation,'' said a 39-year-old coal miner from Chongjin who was interviewed late last year during a visit to China.

``We all know we think that, and we all know everybody else thinks that. We don't need to talk about it.''

Just a decade ago, when people in Chongjin needed new trousers, they had to go to government-owned stores which sold items mostly in drab browns or a dull shade of indigo. Food and other necessities were rationed. Sometimes the government permitted the sale of home-grown vegetables, but even a hairbrush was supposed to be purchased at a state-run shop.

Today, people can shop at markets all over Chongjin, the result of a burst of entrepreneurship grudgingly allowed by the authorities. Almost anything can be purchased - ice cream bars from China, pirated DVDs, cars, Bibles, computers, real estate and sex - for those who can afford them.

The retail mecca is Sunam market, a wood-frame structure with a corrugated tin roof that is squeezed between two derelict factories.

The aisles brim with fresh cucumbers, tomatoes, peaches, scallions, watermelons and cabbages, as shown by rare video footage taken last year by the Osaka, Japan-based human-rights group Rescue the North Korean People. Everything else comes from China: belts, shoes, umbrellas, notebooks, plates, aluminum pots, knives, shovels, toy cars, detergents, shampoos, lotions, hand creams and makeup.

Although markets have been expanding for more than a decade, it was in 2002-2003 that the government enacted economic reforms that lifted some of the prohibitions against them. Many vendors wear their licenses pinned to the right side of their chests while the obligatory Kim Il Sung buttons remain over the hearts.

Most are older women, like Kim Hui Suk, a tiny 60-year-old with short, permed hair and immaculate clothing. She was working in the day-care center of a textile factory in the early 1990s when production ground to a halt.

Men were ordered to stay at their jobs, but Workers' Party cadres at the factory started whispering that the married women, or ajumas, ought to moonlight to provide for their families. ``It was clear that the ajumas had to go out and earn money, or the family would starve,'' Kim said.

She first tried to raise pigs, locking them in a shed outside her downtown apartment building and feeding them slop left over from making tofu. But the electricity and water were too unreliable to keep the business going.

In 1995, Kim sold her apartment in the choice Shinam district and bought a cheaper one, hoping to use the proceeds to import rice from the countryside. But that, too, failed when she injured her back and couldn't work. The family's situation became dire. Her husband's employer, a provincial radio station, stopped paying salaries, and food distribution ended.

In 1996, her mother-in-law died of starvation; her husband died the following year.

``First he got really, really thin and then bloated. His last words to me were, `Let's get a bottle of wine, go to a restaurant and enjoy ourselves,''' Kim recalled. ``I felt bad that I couldn't fulfill his last wish.''

In 1998, Kim's 26-year-old son, who had been a wrestler and gymnast, grew weak from hunger and contracted pneumonia. A shot of penicillin from the market would have cost 40 won (HK$0.30), the same price as enough corn powder to feed herself and her three daughters for a week. She opted for the corn and watched her son succumb to the infection.

But Kim did not give up. She swapped apartments again and used the money to start another business, this time baking biscuits and making neungju, a potent corn moonshine. If buyers didn't have cash, she would accept chile powder or anything else she could use.

``We made just enough to put food on the table,'' Kim said.

Much of Chongjin's commerce is still not officially sanctioned, so it has an impromptu quality. Money changes hands over wooden carts that can be rolled away in a hurry. Those who can't afford carts sell on tarpaulins laid out in the dirt.

Some people cut hair or repair bicycles, although furtively because these jobs are supposed to be controlled by the government's Convenience Bureau.

``They will bring a chair and mirror to the market to cut hair,'' Kim said. ``The police can come at any moment, arrest them and confiscate their scissors.''

World Food Program officials in North Korea say the vast majority of the population is less well off since the economic changes, especially factory workers, civil servants, retirees and anybody on a fixed income.

The price of rice has increased nearly eightfold since 2002 to 525 won per pound; an average worker earns 2,500 won a month.

But there are those who have gotten rich. Poor Chongjin residents disparage them as donbulrae, or money insects.

``There are people who started trading early and figured out the ropes,'' said a 64-year-old retired math teacher who sells rabbits at the market. ``But those of us who were loyal and believed in the state, we are the ones who are suffering.''

About 100,000 North Koreans have escaped to China in the past 10 years. Many have ended up returning to North Korea, either because they were deported or because they missed their families. They often bring back money, goods to trade and strange new ideas.

Smugglers carry chests that can hold up to 1,000 pirated DVDs. South Korean soap operas, movies about the Korean War and Hollywood action films are among the most popular. Even pornography is making its way in.

This is a radical change for a country so prudish that until recently women were not permitted to ride bicycles because it was thought too provocative. Seo Kyong Hui, a former kindergarten teacher, said that when she left North Korea in 1998, ``I was 26 years old, and I still didn't know how a baby was conceived.''

Even today, women are prohibited from wearing short skirts or sleeveless shirts, and both sexes are forbidden to wear bluejeans. Infractions bring rebukes from the public-standards police.

But it is a losing battle to maintain what used to be a hermetic seal around the country. Just a few years ago, ordinary North Koreans could make telephone calls only from post offices. Dialing abroad was virtually impossible. Now some people carry Chinese cell phones and pay for rides to the border to pick up a signal and call overseas.

Smugglers bring in cheap Chinese radios. Unlike North Korean radios, which are preset to government channels, they can be tuned to anything, even South Korean programs or the Korean-language broadcasts of Radio Free Asia.

In the past, being caught with such contraband would land a person in political prison. Nowadays, security personnel will more likely confiscate the illicit item for personal use.

North Korea instructs its citizens that the country is a socialist paradise, but the government knows outside influences can puncture its carefully crafted illusions.

``Bourgeois anti-communist ideology is paralyzing the people's sound mind-set,'' warns a Workers' Party document dated April 2005. ``If we allow ourselves to be affected by these novel ideas, our absolute idolization for the marshal [Kim Il Sung] will disappear.''

Among those who make it to China, many describe a moment of epiphany when they find out just how bad off North Koreans are.

Kim Ji Eun, a doctor from Chongjin, remembers wading across the partially frozen Tumen River in March 1999, staggering to a Chinese farmhouse and seeing a dish of white rice and meat set out in a courtyard.

``I couldn't figure it out at first. I thought maybe it was for refrigeration,'' recalled Kim, who now lives in South Korea.

``Then I realized that dogs in China live better than even party members in North Korea.''

Many Chongjin residents who are caught trying to flee the country end up back in the city, behind the barbed wire of Nongpo Detention Center.

It sits near the railroad tracks in a swampy waterfront area. Prisoners are assigned back-breaking jobs in the nearby rice paddies or brick factory, where the workday begins at 5am.

Ok Hui, the eldest daughter of entrepreneur Kim Hui Suk, was one of those who served time in Nongpo. A rebel by nature, she had become fed up with North Korea and a difficult marriage.

In September 2001, during one of several failed attempts to escape, she was arrested in Musan and brought back to Chongjin by train. Guards tied the female prisoners to one another by tightly winding shoelaces around their thumbs.

In Nongpo, the inmates bunked in rows of 10, squeezed so tightly together that they had to sleep on their sides. Newcomers sometimes had to bed down in the corridor near overflowing toilets. Meals consisted of a thin, salty soup, sometimes supplemented by a few kernels of raw corn or a chunk of uncooked potato.

``The walls were very high and surrounded by wire,'' Ok Hui said. ``One woman tried to climb the wall. They beat her almost to death. You can't imagine. They made us stand and watch.''

One day, when she was assigned to work in the fields, she spotted an old woman. She took off her underwear and offered it to the woman in exchange for sending a message to her mother. Underwear is scarce in North Korea, so the woman accepted and agreed to send a telegram to Ok Hui's mother.

With her market earnings, Kim Hui Suk bought 10 packs of cigarettes for a security official to arrange her daughter's release.

Some days later, the prison administrator came to talk to Ok Hui and other female prisoners who were picking corn. They were all due to be freed shortly, and the administrator urged them to resist the temptations of capitalism and imperialism, and to devote themselves to North Korea.

Then, he asked for a show of hands: Who would promise not to run away again to China?

Not a single woman raised her arm.

``We were all just thinking that our whole lives we had been told lies,'' Ok Hui recalled. ``Our whole lives, in fact, were lies. We just felt this immense rage toward the system.''

The prison administrator looked at the women squatting sullenly in silence in the cornfield.

``Well,'' he said, ``if you go again to China, next time don't get caught.''

Forty days after her release, Ok Hui escaped again to China and made her way to South Korea. She used US$8,000 (HK$62,400) in resettlement money from South Korea's government to pay a broker to smuggle her mother out of North Korea. Today Ok Hui works in a funeral home and her mother as a housekeeper.