DPRK trade deficit with China nears USD$1.3 billion
Institutue for Far Eastern Studies (IFES)
NK Brief No. 09-3-5-1
2009-03-05As North Korean dependence on trade with China continues to grow, the amount of overall trade hit a record high in 2008, however its trade deficit rose along with it. According to recent statistics released by China’s Customs Bureau and the Ministry of Commerce, trade between the DPRK and PRC in 2008 was worth a total of 2.78 billion USD, a 41.2 percent increase over the mere 1.97 billion USD recorded in 2007.
DPRK exports to China were worth 750 million USD, a 29.7 percent rise, while imports from China totaled 2.03 billion USD, up 46 percent, which led to a record 1.28 billion USD trade deficit. Mineral resources accounted for more than half (54.7 percent) of North Korea’s exports to China, while the majority of imports were machinery and electronic goods.
The North’s trade deficit with China has continued to grow for the past five years straight. In 2004, the North’s trade deficit was a mere 210 million USD, but this more than doubled, to 580 million USD, in 2005, rose to 760 million USD in 2006, and then hit 810 million USD in 2007. The reason for the sudden jump in the North’s trade deficit appears to be the globally rising cost of raw materials, and therefore Pyongyang’s trade deficit is expected to continue to rise rapidly in the near future.
This deficit is exacerbated by the North’s isolation from the rest of the international community, leaving it little choice but to continue trading at prices set by the Chinese. With the currently frigid relations between Pyongyang and Seoul, and the deadlock in 6-Party Talks, tensions on the Korean Peninsula make it increasingly difficult for North Korea to trade with other countries, so its dependence on China and Chinese goods is expected to continue to grow.
And according to the Choson Ilbo:
Trade between North Korea and China totaled US$2.78 billion last year, up 41.2 percent from $1.97 billion in the previous year, according to the statistics released on Monday by the China Customs and China’s Ministry of Commerce. North Korea’s imports topped $2.03 billion, up 46 percent from the previous year, but its exports stood at $750 million, up only 29.7 percent.
As a result, North Korea’s trade deficit with China reached a record high of $1.28 billion, up a whopping 57.7 percent from $810 million in 2007. It has been rising steadily from $210 million in 2004.
Mineral resources accounted for 54.7 percent of the North’s exports to China, while machinery and electronic equipment took up the biggest portion of imports.
The figures are attributable to the drastically increased prices of raw materials and the North’s deepening dependency on China. “North Korea’s dependence on China appears to be rising steadily because foreign countries other than China are reluctant to trade with the North because of strained inter-Korean relations and the stalled six-party talks,” said a North Korea export in Beijing diplomatic circles.
Read the full article here:
N.Korea’s Reliance on China Trade Deepens
Choson Ilbo
2/24/2009
