2/14/06
SEOUL – North Korea’s economy would have posted minus growth if it had not been for its rapidly growing trade with China, the South Korean central bank’s research unit said Monday.
North Korea-China trade has been rising by an average 30% every year since 2000, boosting the communist state’s economic growth by 3.5% every year, according to the Institute for Monetary and Economic Research.
As of 2004, the bilateral trade accounted for 39% of the North’s total trading volume, and also made up 77% of annual increase in the North’s trade volume, the institute said. North Korea’s economic growth could have dipped below zero if it were not for such a sharp increase in its trade with China, the institute said. Such a sharp increase in bilateral trade is the result of North Korea’s low production capacity and cheap prices of Chinese goods, it said.
Geographical proximity also boosted the trade. The fast growth of the Chinese economy will result in increased trade with North Korea and induce more market elements in the Stalinist state in the coming years, the institute predicted.
As a result, the inclusion of China in South Korea’s economic cooperation with the North will be one of the options that the government could consider in its policy, it added.
