North Korea Records Largest Ever Trade Deficit with China Last Year

Trade Balance Trend between North Korea and China (Cumulative 2014-16 vs Cumulative 2017-19)

[Asia Economy Reporter Hwang Yoon-joo] Last year, North Korea's trade deficit with China reached an all-time high.

According to the "2019 North Korea-China Trade Trends and Implications" report released by the Korea International Trade Association on the 19th, North Korea's exports to China last year increased by 10.8% compared to the previous year to $216 million, and imports rose by 16.8% to $2.589 billion, resulting in an annual trade volume of $2.805 billion, up 16.3% from 2018.

North Korea's trade deficit with China over the three years from 2017, when sanctions were tightened, to last year totaled $6.072 billion, approximately 3.6 times the cumulative amount of $1.702 billion recorded in the three years before the sanctions were strengthened (2014?2016).

Monthly North Korea-China trade last year decreased by 13% and 4.8% in January and February compared to the same months the previous year, but rebounded sharply in March with a 37.9% increase and continued to rise through the end of the year.

The main items North Korea imported from China were food ingredients such as soybean oil, rice, and flour; plastic building materials like flooring; and raw materials for processing such as assembled watch parts and textiles. Exports to China mainly consisted of non-sanctioned processing items such as watches, wigs, laboratory equipment, and shoes, as well as non-sanctioned minerals like tungsten and molybdenum.

The report explained, "China is the largest trading partner accounting for 91.7% of North Korea's foreign trade, so the increase in North Korea-China trade essentially means an increase in North Korea's total trade volume. However, since international sanctions focus on restricting North Korea's exports, i.e., its foreign currency earning means, the more North Korea-China trade increases, the more North Korea's trade deficit with China deepens."

An official from the Trade Association stated, "Due to the recent COVID-19 situation, North Korea has closed its borders, so North Korea-China trade will temporarily decrease this year, but it is expected to rebound sharply once the situation stabilizes. However, with sanctions banning North Korean overseas labor dispatch and the tourism industry shrinking, if North Korea's foreign currency shortage worsens, demand for international cooperation including inter-Korean exchange and cooperation may expand."

This content was produced with the assistance of AI translation services.