UPDATE 1 (2014-6-12): Witness to Transformation has an update here.
ORIGINAL POST (2014-6-4): Nicholas Eberstadt has written an interesting article on trends in the DPRK’s trade patterns from 2002-2013.
Here is just one graph:
Dr. Eberstadt draws some counter-intuitive conclusions that cannot be observed directly from the published data. You can read all about the published data on the DPRK’s 2013 trade statistics here.
According to the Korea Times:
North Korea’s imports of digital television sets from China have more than quadrupled this year, a South Korean trade group said Sunday, amid reports that the country is moving to introduce digital TV broadcasting.
In the first four months of the year, China shipped digital TVs amounting to some US$17.66 million to North Korea, up 338 percent from $4.02 million during the same period last year, according to the Korea International Trade Association.
The figure is the fifth-largest amount for any single item shipped from China to North Korea in the January-April period. Gasoline topped the list.
The North earlier said on a state-run website that it was moving to introduce digital TV broadcasting. The country also asked the U.N. International Telecommunication Union in 2011 for assistance in switching from an analog to a digital broadcasting system.
“The move by the North Korean government to switch to a digital broadcasting system appears to be an effort to win greater public support by showing that the people’s lives are improving,” said Cho Bong-hyun, an analyst at the IBK Economic Research Institute.
Read the full story here:
Trade report says N. Korea importing large number of digital TVs
Korea Times
2014-5-25
UPDATE: Here is the original KOTRA report.
ORIGINAL POST: According to Yonhap:
Despite years of international sanctions, North Korea’s overall trade volume reached a new annual high in 2013 due largely to growing shipments to and from its closest ally, China, a South Korean trade agency said Thursday.
The North’s overall trade volume came to US$7.34 billion in 2013, up 7.8 percent from the previous year, according to the state-run Korea Trade-Investment Promotion Agency (KOTRA).
“It is the highest amount since KOTRA began compiling data on North Korea’s annual trade volumes in 1990,” it said in a press release.
The country’s exports jumped 11.7 percent on-year to $3.22 billion, with imports growing 5 percent to $4.12 billion.
Bilateral trade volume between North Korea and China came to $6.54 billion, accounting for 89.1 percent of the North’s overall trade in 2013.
“North Korea’s dependence on China for trade has been increasing steadily since 2005 when its trade volume with China exceeded 50 percent of its overall trade,” KOTRA said.
“In addition, it shows China’s pledge to tighten its customs check on shipments to and from North Korea, in protest of North Korea’s missile launch in December 2012 and a nuclear test in February 2013, did not have any significant effect on North Korea-China trade,” it added.
The large increase in North Korea’s overall exports was attributed to growing shipments of fuel, such as coal, which surged 14.9 percent on-year to $1.43 billion, accounting for 44.4 percent of the country’s total exports.
Out of all energy exports, 97.2 percent were shipped to China.
Russia, another North Korean ally, was the country’s second-largest trading partner in 2013, with bilateral trade volume spiking 37.3 percent to $104 million.
Note, this does not contain South Korea data, which for purely political reasons is counted as inter-Korean (domestic) trade. According to a KIEP presentation by Yoon Deok-ryong, DPRK-ROK trade in 2013 amounted to $1.14b.
Here is what the Institute for Far Eastern Studies had to say:
North Korean Foreign Trade Volume Posts Record High of USD 7.3 Billion in 2013
According to a recent report by the Korea Trade Investment Promotion Agency (KOTRA), foreign trade in North Korea (excluding inter-Korean trade) reached a record high of USD 7.3 billion in 2013, up 7.8 percent from the previous year. The report, released on May 22, 2014, marks the fourth year since South Korea enacted the “May 24 Measures,” suspending all inter-Korean trade and economic cooperation outside of the Kaesong Industrial Complex. KOTRA, a South Korean state-run agency which analyzes North Korea’s foreign trade volume, noted that last year’s figures were the highest ever since they began recording data in 1990.
The report shows that North Korean exports and imports in 2013 both increased compared to the previous year, up 11.7 percent (totaling USD 3.2 billion) and 5 percent (totaling USD 4.1 billion), respectively. KOTRA’s data analysis says that North Korean exports consist mostly of “mineral resources such as coal, iron ore, copper and aluminum,” and noted that “the recent boom of contract manufacturing (toll processing) businesses has led to an increase in textile and clothing exports.” Imports, such as electricity, transport vehicles and grains also saw increases, but North Korea was still able to cut their trade deficit by about USD 20 million, from 1 billion (2012) to 980 million (2013).
North Korea’s largest trading partner is China. The trade volume between the two allies reached a total of USD 6.5 billion in 2013, up 8.9 percent from the previous year. This accounts for 89.1 percent of all of North Korea’s foreign trade, showing increasing dependence on China. Despite Beijing’s partaking in international sanctions against North Korea, it appears to have had a little effect on the bilateral trade between the two nations.
North Korea’s other top trading partners behind China include Russia, India, Thailand and Singapore (in that order). In particular, foreign trade with Russia increased by 37.3 percent last year and totaled over USD 100 million (7 million in exports, 97 million in imports). KOTRA explained the sharp increase in Russian imports in the second half of 2013 was due to import of transport vehicles and machineries for the railway construction between the areas of Rajin and Hassan.
KOTRA’s research shows that while the trade with Japan has been nonexistent since 2009, the two nations recently have begun to engage in talks at the bureau-chief level. As expected, due to the economic sanctions imposed on North Korea, foreign trade with the United States remains limited to food, basic necessities, and humanitarian aid.
Coal, lignite and other mineral fuels are North Korea’s largest export products, accounting for 44.4 percent of total foreign exports. This figure increased by nearly 15 percent in 2013, reaching USD 1.4 billion. A staggering 97.2 percent of these mineral exports are sent to China. Other exports such as clothing and textiles saw a 33.5 percent increase from the previous year, totaling USD 520 million. Meanwhile, imports of crude and refined oil – North Korea’s largest import commodities – were recorded at USD 780 million in 2013, a 3.8 percent decrease compared to 2012. North Korea’s oil is imported almost exclusively from China at 94.5 percent.
Despite recent economic sanctions imposed by the international community, North Korea’s foreign trade volume has continued to rise over the last four years thanks to increases in coal, iron and other mineral exports to China. Furthermore, in order to diversify its foreign trade and reduce its trade dependence on China, North Korea likely will continue to further promote bilateral ties with Russia.
Here is coverage in Business Korea.
Aidan Foster-Carter offers this update in the Wall Street Journal’s Korea Real Time.
Nicholas Eberstadt offers analysis here.
Read the full story here:
N. Korea’s overall trade volume grows to record high in 2013
Yonhap
2014-5-22
According to Yonhap:
North Korea doled out 420 grams of food to each person per day in April, the same amount as in the previous month, a news report said Tuesday.
Citing the U.N. World Food Program’s office in Pyongyang, the Washington-based Radio Free Asia (RFA) reported that last month’s daily food ration per capita was unchanged from March though the North marked the 102 birthday of Kim Il-sung, founder of the communist country and grandfather of current leader Kim Jong-un.
The founding father died in 1994, and his birthday is one of the most important holidays in North Korea.
The RFA said April’s daily food ration was much lower than the 600 grams recommended by the U.N. agency.
North Korea’s daily food ration, which amounted to 400 grams in January, has been hovering at 402 grams since then.
The Washington-based Voice of America (VOA), meanwhile, said the WFP provided 2,405 tons of food aid to the impoverished country last month.
The food assistance in April was up 50 percent from March and the largest monthly amount this year, but it was much lower than the 4,093 tons provided during the same month a year earlier, the VOA reported.
The WFP has also suspended operations of five out of its seven confectionery factories in North Korea due to a fund shortage, the VOA said.
Read the full story here:
N. Korea rations 420 grams of food to each person in April
Yonhap
2014-5-6
According to Yonhap:
North Korea increased imports of vehicles and alcoholic beverages from Hong Kong in 2013, despite an overall drop in bilateral trade, a South Korean report showed Thursday.
The trade representative office for Korea Trade-Investment Promotion Agency (KOTRA) in Hong Kong said Pyongyang spent US$4.36 million to buy vehicles, up 27.5 percent from the year before, a large number of them with over 3-liter engine and seating capacity for more than 10 people.
Cars were the second-largest single product imported by North Korea from Hong Kong after electronic components, the office said.
“The cars were made in other countries and shipped through Hong Kong,” it said.
North Korean imports of alcoholic beverages shot up 51.3 percent last year from 2012, with whiskey and vodka making up the bulk of products shipped. Though liquor products only accounted for 1.4 percent of goods shipped from the former British colony to Pyongyang, its annual growth rate surpassed that of all others last year.
This trend continued into 2014, with North Korea’s purchase of alcoholic beverages soaring 758.8 percent in January and February vis-a-vis the previous year, according to the KOTRA office.
The latest report showed that two-way trade dropped 57.2 percent on-year to $26.99 million, with Hong Kong’s exports falling 53.7 percent. It said no crude oil, grain and fertilizers were shipped to the North.
Imports from North Korea nosedived 87.9 percent to $770,000.
The report showed that in the first two months of this year, Hong Kong’s exports to North Korea was down 67.9 percent on-year, while imports fell 63 percent.
Read the full story here:
N. Korea increases car, liquor imports from Hong Kong in 2013: report
Yonhap
2014-5-1
We earlier posted an article on how DPRK-China trade has fallen in the first quarter of 2014. The DPRK has apparently imported zero oil from China in the first quarter of this year.
Grain imports from China also fell.
According to Yonhap:
North Korea’s grain imports from China decreased by more than 50 percent in the first quarter from a year earlier, data showed Sunday.
According to the Korea International Trade Association (KITA), North Korea imported 26,263 tons of grain, including 23,636 tons of flour, 1,241 tons of rice and 1,192 tons of corn, from China in the January-March period.
The North’s imports during the first three months is equivalent to 48 percent of 54,178 tons imported during the same period a year ago, the data showed. Compared with the first quarter of 2012, the country’s grain imports from China decreased about 40 percent.
In terms of value, the North’s imports of Chinese grain amounted to US$11.93 million in the first quarter, down 52 percent from $24.71 last year.
“The drop in the North’s grain imports from China in the period compared with other years seems to be due to an increase in the country’s grain production last year,” said Kwon Tae-jin, a research fellow at the government-funded Korea Rural Economic Institute (KREI). “However, the country may increase its grain imports in the future, as the amount of its grain production is not enough for its people.”
The U.N. World Food Program (WFP) estimates the North produced 5.03 million tons of polished grain between November 2013 and October 2014, up 5 percent from a year ago.
Read the full story here:
N. Korea’s grain imports from China halve in Q1
Yonhap
2014-4-27
According to Yonhap:
U.S. exports to North Korea jumped nearly 20-fold in February from a year earlier, a U.S. radio report said Tuesday.
The volume of trade between the two countries reached US$1.2 million in February, compared with $62,000 a year earlier, the Voice of America (VOA) reported, citing data compiled by the U.S. Commerce Department.
The VOA said that humanitarian assistance provided by U.S. private agencies accounted for 95 percent, or $1.13 million, of the total U.S. shipment to North Korea in February.
The rest of the U.S. exports to the North included poultry, footwear and plastic products, the radio report said.
The U.S., however, imported nothing from North Korea during the cited period, it said.
Read the full story here:
U.S. exports to N. Korea jumps nearly 20-fold in Feb
Yonhap
2014-4-8
Previous reports indicated that the execution of Jang Song-thaek has to date had little effect on DPRK-China trade. According to the Institute for Far Eastern Studies (2014-3-12):
Trade between North Korea and China in January has increased roughly 16 percent against the previous year. After the December 2013 purge of Jang Song Thaek it was predicted that trade between the two countries would decrease; however, there is no visible sign of this yet.
According to the Korean Foreign Trade Association’s* data, trade between North Korea and China in February increased from 471 million USD to 546 million USD, up 15.9 percent compared to the previous year.
February also showed an increase in anthracite exports, North Korea’s main export to China, rising 21.3 percent to 102 million USD. Iron ore exports also showed a slight increase of 35 million USD compared to last year.
Chinese exports to North Korea, including leading export commodities such as cellular phones and other wireless radio/communication devices, increased 28 percent compared to January of last year, totaling 14.5 million USD. In February, goods exported through China to North Korea increased by 10.2 million USD, a 38.6 percent increase compared to January of last year.
The trade gains in this report are annual for the most part…comparing 2013 data with 2014 data. This reveals little about the change in trade volume from month to month.
Now a story in Yonhap offers January and February 2014 data, and journalists have reached the opposite conclusion. Jang’s execution has played a role in DPRK-China trade. According to the article:
“In January and February this year, North Korea significantly stepped up checks on its coal exports to China,” a source in Beijing said on the condition of anonymity.
“Such reinforced checks appear to be related to the execution of Jang Song-thaek,” the source said.
According to the latest data by the Korea International Trade Association* in Seoul, North Korea’s exports of coal to China in February fell 26 percent from a month ago to 920,000 tons. The North’s exports of iron ore to China also fell 23 percent in February from a month earlier to 197,000 tons.
The North’s total trade with China in February plunged 46 percent from a month earlier to US$255 million, the data showed.
In Dandong, the Chinese border city with North Korea where about 80 percent of bilateral trade is conducted, the flow of goods in and out of North Korea appears to be affected by the execution of Jang.
“In previous years, the North Korean authorities had usually set their annual targets for exports and imports, and given quotas to trading firms,” said another source in Dandong who is doing businesses with North Korea. “But, no quota has been given yet this year.
“Obviously, the mood is different than previous years,” the source said.
No progress has been made on special economic zones, including Hwanggumphyong and Wihwa, set up by the North on the border with China, according to the source.
“Under the current circumstances, Chinese investors will not invest in the North’s special economic zones,” the source said.
Does this mean anything? Well, we don’t know enough about these numbers, or the cause for such dramatic change in trade patterns, so we will need to continue to watch the data. Even before the February numbers came out, Scott Snyder reminded us that DPRK-China trade has taken a dip between January and February for each of the last three years!
Then there are the caveats: 1. This only counts legitimate trade (no illicit, secret, or military trade) 2. No aid 3. No official or unofficial transfers 4. No capital flows.
*Presumably the Korean Foreign Trade Association and the Korea International Trade Association are the same thing.
Read the full Yonhap story here:
N. Korea’s trade with China shaken after Jang’s execution
Yonhap
2014-4-4
Pictured above (Google Earth): The coal-covered Taean Port on the Taedong River
Who knew that Rodong Sinmun was involved in the coal export business?
According to the Daily NK:
Gwangbokseongdae Co. [광복성대?], a hard currency-earning arm of the operator of the Party daily Rodong Sinmun, recently resumed coal exports through the West Sea port of Nampo, Daily NK has learned. Exports had been halted upon the orders of the Chosun Workers’ Party in October 2013.
The Kim regime is believed to have resumed exports to open up additional flows of hard currency for accounts earmarked for regime maintenance. Coal is one of North Korea’s biggest export industries, with almost all the coal produced in the country sent to China (though a percentage of it is coked and returned for use in North Korean power stations).
A source from South Pyongan Province reported the story to Daily NK on the 3rd, explaining that “Gwangboksongdae Co. has started exporting coal again; it was originally stopped by the Party last October.”
The source then went on to add, “So as to match the timing of [incoming] vessels and increase export volumes, the company is leasing its trucks to people.”
“It costs US$350 per day to lease the trucks. They travel from storage yards [owned by people who lease land from farms and use it for the storage and sale of coal] in mining areas of South Pyongan Province to Daean Port in Nampo. Vessels start coming in March, so leased trucks are again transporting coal for export.”
Companies exporting coal to China must have an export trade license from the North Korean authorities. Then they can use planned exports to China as security against the cost of leasing the trucks. From the point of view of the company, subcontracting in this manner, a practice that began in the mid-2000s, makes more sense than employing drivers directly.
There are many conditions attached to truck rental from Gwangboksongdae Co., however. According to the source, not only must lessees prove that they have $3000 with which to purchase coal; they must also have ten years of trucking experience and, of course, good connections in the Central Party.
But it is worth it. “The original price of a ton of coal is roughly $12,” he said. “This can then be sold at the storage yards in Nampo and Taean Port for $32, giving the driver a clear profit of $20 on each ton. If he carries an average load of 30t, he will earn $540. If we factor in the lease fee of $350 and cost of fuel, there is around $100 left per load.”
“Normally, drivers make around three trips per week,” he went on. “But truck repair costs are born by the lessee. If a vehicle is damaged, the lessee ends up with a significant burden as they can be held liable for compensation.”
According to trade statistics compiled by the Korean International Trade Association (KITA) in January 2014, North Korea exported 16.5 million tons of anthracite to China in 2013. This total, which marked a year-on-year increase of 39.7%, brought in approximately US$ 1.373bn, a 15.5% increase over 2012.
Read the full story here:
Trucks for Rent as Coal Exports Soar
Daily NK
Seol Song Ah
2014-4-3
What are the opportunities? Rason port, Iron Silk Road (Rail), Kaesong Industrial Complex, gas pipeline.
According to RIA Novosti:
Russia and North Korea have signed a new protocol to transition to using the ruble for payments between the two countries as part of an effort to boost annual bilateral trade to $1 billion by 2020, Russia’s Far East Development Ministry said Friday.
The announcement came as Russian officials have expressed a desire to explore new markets for the country’s businesses, following the introduction of sanctions by the West in reaction to Moscow’s stance over Crimea. Russian leaders have simultaneously reassured international investors the country remains open for business, and there are no plans to restrict international commerce.
The protocol announced Friday came following a visit of a Russian delegation to the Asian country for a meeting of a standing bilateral commission, timed to mark the 65th anniversary of a cooperation agreement between the Soviet Union and North Korea.
The parties agreed to move towards settling payments in rubles as well as adopting further measures to boost bilateral trade, including easing visa procedures and providing for Russian access to proposed special economic zones in the country, the ministry’s statement said.
The ministry reaffirmed the countries’ mutual interest in joint projects with South Korea, including international connections for railways [Iron Silk Road], gas pipelines and power lines.
The Russian delegation also proposed the entry of Russian businesses into the Kaesong Industrial Park, a special economic zone in North Korea just north of Seoul where South Korean companies are allowed to employ northern workers.
The two sides identified areas for further cooperation, including a transshipment complex at the port of Rason and technical cooperation for the modernization of North Korea’s mining sector, automobile industry and electric power plants.
According to the statement, during the talks Russian Far East Development Minister Alexander Galushka emphasized that achieving such goals would only be possible if stability is maintained on the Korean peninsula.
The next meeting of the bilateral commission is scheduled for June in Russia’s far eastern Vladivostok.
Here is what Yonhap reports:
North Korea and Russia have agreed to boost economic ties by pushing for trilateral projects involving South Korea, including a plan to support Russian companies’ entry into an inter-Korean industrial complex, a media report said Saturday.
The agreement between the two was made earlier this week when Russia’s Far East Development Minister Alexander Galushka visited the North for a five-day run until Friday to explore ways to boost bilateral economic cooperation, according to the Russian news agency RIA Novosti.
“The Russian delegation proposed the entry of Russian businesses into the Kaesong Industrial Park, a special economic zone in North Korea just north of Seoul where South Korean companies are allowed to employ northern workers,” the RIA Novosti reported, citing the ministry.
…
Officials of Seoul’s unification ministry, which handles inter-Korean affairs, welcomed the agreement between the North and Russia, while stressing the importance of Russia’s prior consultation with the South.
“Russian companies’ making inroads into the Kaesong park is desirable in terms of the internationalization of the complex … It would also prevent the North from unilaterally reversing its agreement with Seoul over the Kaeesong operation,” the ministry official said, requesting anonymity.
Internationalization of the enclave, a symbol of inter-Korean detente, is one of the key topics for inter-Korean meetings aimed at ensuring its normal operations and further invigorating the complex. The Kaesong park resumed operations in September, more than five months after the North unilaterally closed it in anger over Seoul-Washington joint military exercises.
“But it is crucial for Russia to discuss the matter with our side first as it is basically operated by the South Korean authorities,” he added.
A handful of companies from China, Australia and Germany have so far expressed interests in making an investment in the Kaesong complex, prompting the Seoul government to review holding joint presentation sessions with the North to lure investors from overseas, according to another ministry official.
Here is additional information from Yonhap on recent shipments from Russia to the DPRK:
Russia exported US$21.16 million’s worth of jib cranes, machinery used mostly for cargo handling at ports, to North Korea last year, accounting for nearly 22 percent of its total exports to the North, according to the report by the Korea Trade-Investment Promotion Agency (KOTRA). The amount surpasses that of Russia’s traditional export goods such as coal, petroleum and bituminous oil.
There were no records of the machines being exported to North Korea the year before, with the 2011 amount standing at $139,000.
North Korea and Russia maintain economic relations that include a project that would make North Korea’s northeastern port city of Rajin a logistics hub by connecting it to Russia’s Trans-Siberian Railway. North Korea is said to have agreed to a long-term lease of the No. 3 dock at Rajin port to Russia and that it is modernizing facilities there. The cranes may be for such modernization efforts, the KOTRA report said.
Also noteworthy is Russia’s exports of ambulances to the North, amounting to approximately 10.1 billion won ($9.45 million), the fourth largest in terms of value. Ambulances are a relatively new product on the trade list.
KCNA’s reporting of the meeting was much more muted:
DPRK Premier Meets Minister of Development of Far East of Russia
Pyongyang, March 26 (KCNA) — Pak Pong Ju, premier of the DPRK Cabinet, met Alexandr Galushka, minister of the Development of Far East of Russia who is chairman of the Russian side to the Inter-governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, and his party.
He had a friendly talk with them who paid a courtesy call on him at the Mansudae Assembly Hall on Wednesday.
Minutes of Talks between Governments of DPRK, Russia Signed
Pyongyang, March 26 (KCNA) — Minutes of talks on cooperation in trade, economy, science and technology between the governments of the DPRK and Russia were signed here Wednesday.
Present at the signing ceremony were Ri Ryong Nam, minister of Foreign Trade who is chairman of the DPRK side to the Inter-governmental Committee for Cooperation in Trade, Economy, Science and Technology between the DPRK and Russia, and officials concerned, Alexandr Galushka, minister for the Development of Far East who is chairman of the Russian side to the Inter-governmental Committee, and his party and Alexandr Timonin, Russian ambassador to the DPRK.
Ri Ryong Nam and Alexandr Galushka signed the minutes of the talks.
Read the full story here:
Russia, North Korea Agree to Settle Payments in Rubles in Trade Pact
RIA Novosti
2014-3-28
N. Korea, Russia to discuss supporting Moscow firms’ advance into Kaesong park
Yonhap
2014-3-29
