DPRK trade update: China (up), South Korea (down)

UPDATE 1 (2011-7-13): Marcus Noland wrote some comments on the DPRK’s trade with China:

In an earlier post we argued that North Korea’s trade dependency on China, while large and rising, is frequently exaggerated in public discussions. According to press reports, the Korean Development Institute has apparently gone some way in rectifying this situation, determining that China accounts for 57 percent of North Korea’s trade—a far cry from the 80 percent derived from the KOTRA figures that ignore North-South trade, yet still well above the 30-40 percent we obtain on the basis of IMF figures. Like KOTRA, the KDI figures appear to be missing trade—their overall estimate for total North Korean trade, approximately $6 billion, is well below the $8-11 billion reported in recent years by the Fund. Those figures are not unimpeachable—just take a look on our recent posting regarding their FDI data, but it is striking that the numbers diverge by such large margins.

ORIGINAL POST(2011-7-7):

Trade with China: According to the APF (2011-7-6):

North Korea’s reliance on China for trade deepened last year after South Korea severed most ties with Pyongyang, accusing it of torpedoing of one of its warships, a think-tank said Wednesday.

The state Korea Development Institute said in a report the North’s trade with China was worth $3.47 billion last year, up 29.3 percent from a year earlier.

Such trade accounted for 56.9 percent of its total trade of $6.09 billion last year, up from 52.6 percent in 2009.

The trend intensified this year, with the value of North Korea-China trade nearly doubling to $1.43 billion during the first four months from the same period a year earlier.

This was mainly due to a sharp rise in the North’s coal exports, the institute said.

In contrast, the North’s exports to South Korea plunged from an average $40 million per month in January-May last year to a mere $1 million per month in the first four months of this year.

“The North drastically expanded exports of such strategic materials as coal to China” after its trade with the South was almost cut off, the report said.

This sudden surge in exports contributed to energy shortages in the North during the past winter.

Here is the report home page (Korean). Here is the report (Korean-PDF)

Trade with South Korea: According to Yonhap:

Trade between South and North Korea shrank more than 14 percent in a year following economic sanctions imposed on the North in retaliation for its sinking of a South Korean warship, the Unification Ministry said Sunday.

Total inter-Korean trade dropped to US$1.73 billion in the year spanning from June last year to May this year, declining 14.41 percent from $2.02 billion in the same June-May period a year earlier, according to the ministry.

The decline came after the sitting Lee Myung-bak administration declared on May 24 last year its resolution to bring the North’s March 26 sinking of the South Korean warship Cheonan to the United Nations Security Council.

The South also imposed economic sanctions on the North in reaction to the ship attack that killed 46 crew members. The North has denied responsibility for the attack.

General trade and processing trade, in which North Korea imports resources and manufactures them to re-export to the South or another country, plunged 76.45 percent to $165.9 million during the cited period, the ministry said. Both of the trade types have been banned since the May resolution.

Inter-Korean trade has shown an even steeper downtrend since the beginning of this year as pre-paid manufacturing orders, which were exempt from the trade ban, nearly came to an end, according to the ministry.

During the January-May period, cross-border trade stood at $685.2 million, down 21.5 percent from the same five-month period last year, it said.

However, the volume of trade via the Kaesong industrial complex, an inter-Korean joint economic project, rose 24.2 percent to $1.55 billion over the past year, the ministry added.


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