 North Korea's 2023 Trade with China: Analysis and ForecastsJangho Choi () and
Yoojeong Choi ()
No 24-9, World Economy Brief from Korea Institute for International Economic Policy Abstract: This article analyzes North Korea-China trade trends and statistics in 2023 to evaluate the extent of North Korea's trade normalization and its performance. North Korea's trade with China increased by more than 120% compared to the previous year as the country declared a COVID-19 Endemic and gradually eased border controls, but did not recover to 2018-19 levels, the year before the outbreak of COVID-19. Imports to China recorded 2.00 billion, 124.1% higher than the 0.89 billion in 2022. North Korea's imports from China in 2023 are estimated to be the maximum achievable given the lack of a full resumption of over-land trade. However, as the negative impact of UN sanctions on the North Korean economy is ongoing, making it difficult to normalize industrial production. North Korea mainly imported raw materials for processing trade (textile and garment raw materials), staple foods (rice and sugar), agricultural materials (fertilizer), and construction materials from China in 2023. North Korea’s exports to China stood at 0.29 billion, up 118.4% from 0.13 billion in 2023. Exports remain at the 16.9% of the level before the tightening of UN sanctions on North Korea, as the country has failed to diversify its products and expand exports of major export items. Exports were highly dependent on specific products, wigs and false eyelashes, a labor-intensive industry, accounting for 57.1% of total exports. In spite of increasing wigs export, North Korea failed to further expand its amount and diversify the export items in the second half of the year. According to the analysis of trade statistics, the main goals of North Korea's 2023 US foreign economic policy are: (1) resuming smuggling trade in textiles and clothing, (2) building irrigation canals in preparation for summer floods, (3) implementing state-led grain distribution, (4) building living houses in a rural area, and (5) increasing metal production for Russian arms exports. Despite the increase in imports from China in the transition to the coronavirus pandemic, it is difficult to say that it has yet led to the recovery of industrial production and economic development. The future of North Korea's trade with the rest of the world in 2024 will be determined by whether North Korea fully opens its borders and improves its relations with China. In 2024, both North Korea's exports and imports are expected to be slightly higher than in 2023. North Korea's exports are unlikely to increase significantly, as North Korea-Russia military cooperation is expected to continue and China is likely to maintain its checks on the growing Sino-Russian alignment. Increased imports will lead to a larger trade deficit, but it will be within North Korea's ability to manage for one to two years. Keywords: North Korea; North Korea and China Relation; Trade of North Korea; DPRK (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2024_009 Access Statistics for this paper More papers in World Economy Brief from Korea Institute for International Economic Policy [30147] 3rd Floor Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si, Korea. Contact information at EDIRC. |
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