The northeast Chinese city of Dandong faces North Korea across the Yalu river, its neon-lit riverfront of shops and restaurants underscoring the darkness on the other side, which struggles with chronic power shortages.

But even after the abrupt death of Kim Jong-il threatened to throw the North into an era of uncertainty, many Dandong residents had little time for political speculation.

Cars jammed the downtown's main thoroughfare during Tuesday's rush hour as commuters hurried to get home after work, the incessant honking of horns a reminder that for many here, it was business as usual.

"Life is the same as it was yesterday morning," said one taxi driver who gave only his surname, Chen.

"I don't think there will be any impact on our day-to-day living because the relationship between China and North Korea is stable," said a grocery store owner surnamed Wang.

Still, for some here, the passing of North Korea's leader means life will be put on hold at least for some time.

In normal times, clusters of North Korean visitors -- some wearing badges of Kim Il-sung, the country's late revolutionary founder and father of Kim Jong-il, on frayed suits -- gape at the brightly lit and well-stocked shops and restaurants on the Dandang riverfront.

But these are not normal times.

"The North Korean people around here are really devastated," said Sui Tongjun, a Chinese trade agent who deals with North Korea. "It's like several decades ago when Mao (Zedong) passed away," he said. "But that will pass and business will go on."

Mourners who appeared to be North Koreans filed through a makeshift mourning centre. Women in their 20s and 30s wept, wailed and prostrated themselves in front of wreaths of white and yellow chrysanthemums. Some men clasped their hands in front of them and bowed deeply.

"North Korea lost a great leader and China lost a great friend," said Wang Qiulan, a Chinese woman who was selling books about and photos of Kim Il-sung and Kim Jong-il, her face bundled up to guard her from the cold.

CLOSED OFF

Chinese businesspeople in Dandong who do deals with North Korea said they expected the country would shrink into itself for some time, preoccupied with the leadership transition, making trade even more difficult than usual.

"We can't go in now, because of the death of Kim Jong-il," Yu Lu, a Chinese trader in Dandong who does business with the North, told Reuters. "It's all closed off, and basically all the North Koreans are heading back. It's very tightly closed today."

Most businesspeople here, accustomed to the uncertainties of doing business with North Korea, are taking that in stride.

"You should know that Kim Jong-un has just assumed power, and so the situation will be tight and many (trading) companies will have to take a hit," said Chen Yiming, a trader in Dandong whose Sanyi Taishun Company acts as an import-export agency.

"Now that one generation's leader has gone, and the next generation's leader has come to power, there'll certainly be a period when the political scene is unstable, and that will certainly affect investors like us."

But North Korea appeared unlikely to undergo turmoil, said Luo Dongdao, a businessman in Yanji, another city on China's border with the North.

"They've announced his death, and that shows that they're prepared," Luo said in a telephone interview. "They'll certainly be able to maintain stability."

SURGING, BUT BUMPY, TRADE

"There can't possibly be chaos. The system there is firm," said Jin Ri, the manager of a company in Yanji that buys fish from North Korea. He said he last visited there in October.

"The people there aren't much influenced by the outside world and basically follow the government's line, so it won't at all be like Libya or Syria," said Jin.

Dandong city, with a population of about 750,000, is the portal for much of China's vital trade and aid to the North, linked by a railway line and bridges that carry trucks of goods.

Trade between China and North Korea rose by 73.5 percent in the first 10 months of 2011 compared with the same period last year, reaching $4.7 billion. Growth was powered by growing Chinese imports of minerals, coal and other basic products, according to Chinese customs data.

Despite the expanding trade, Chinese merchants said doing deals in North Korea was difficult and capricious, even for hardened negotiators.

"Sometimes they make orders and then don't pay up. There are too many scams, so usually we try to settle deals in Dandong," said Yu, who sells grain, food and daily necessities to North Korean customers.

"I think in the end, North Korea will make a turn for the better, because his son (Kim Jong-un) is young and will be able to absorb new things. It will develop in the right direction," he said. "Now it's still poor, sometimes too poor for people to eat their fill."

(Writing by Chris Buckley; Additional reporting by Chris Buckley, Sabrina Mao, Sally Huang and Reuters Television; Editing by Jason Subler and Ron Popeski)

• A Permanent Economic Emergency