Archive for the ‘Trade Statistics’ Category

North Korea’s “Epic Economic Fail” in International Perspective

Wednesday, November 11th, 2015

A new report by Nicholas Eberstadt has been published by the Asan Institute for Policy Studies. According to the summary:

This report brings to the table new research on the dimensions of economic failure in modern North Korea, offers a quantitative view of how nations develop in our modern world, and where North Korea’s awful slide downward fits within this global tableau; offers admittedly approximate long term estimates of overall net resource transfers to the DPRK, including estimates of net transfers from the major state benefactors; and some indications about the interplay between concessionary resource transfers from abroad and the DPRK’s domestic economic performance. It concludes with some observations about the implications of these findings

You can download a PDF of the report here.

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DPRK-China trade through 2014

Thursday, October 29th, 2015

Stephan Haggard posted some charts of DPRK-China trade taken from KOTRA:

North-Korean-China-Trade-from-KOTRA

North-Korean-Trade-including-North-South-Trade

North-Korean-Exports-and-Imports-from-KOTRA

 

 

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KOTRA data on DPRK-China trade

Wednesday, October 14th, 2015

Below are charts published by KOTRA of North Korea – China trade.

North-Korean-China-Trade-from-KOTRA

North-Korean-Exports-and-Imports-from-KOTRA

North-Korean-Trade-including-North-South-Trade

Here is the source.

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China slowdown hits North Korea’s exports

Thursday, October 8th, 2015

Alastair Gale writes in the Wall Street Journal:

China’s economic slowdown and a plunge in coal prices are depriving North Korea of critical foreign currency, threatening to stir discontent among the small, elite class that the nation’s mercurial dictator relies on for support.

The drain on income comes as North Korea continues to plow its limited resources into its armed forces. On Saturday, the isolated state is set to hold a military parade to mark the 70th anniversary of the founding of its ruling party. It has also declared plans to launch satellites, seen by the U.S. and others as a way to test ballistic missile technology.

The value of North Korean exports to China, by far Pyongyang’s biggest trade partner, fell 9.8% through August from the year-earlier period, Chinese data show, accelerating from a 2.4% decline last year.

Adding to the pressure on Pyongyang is China’s attempt to scale back its bloated steel industry, the main customer for North Korea’s biggest export product, coal.

The scenario leaves North Korea’s young leader, Kim Jong Un, vulnerable. North Korea depends on China to buy most of its exports, but ties between the longtime allies have become strained over North Korea’s nuclear brinkmanship. To boost exports, Pyongyang has little option but to turn to its only other significant trade partner, South Korea.

All of this means Mr. Kim has less foreign currency to underwrite the lifestyles of the North Korean elite whose support is essential to maintaining his grip on power.

“Raising living standards for the North Korean apparatchik class is extraordinarily dependent on trade with China in a single commodity,” said Marcus Noland, executive vice president of the Peterson Institute for International Economics, a Washington research group. “A slowdown in revenues will create discontent.”

The depth of possible repercussions is hard to gauge because of North Korea’s opaque economy and political system. There are no clear outward signs of government instability, and prices of daily necessities such as rice—often an indicator of economic shocks—remain steady, said Nicholas Eberstadt, a political economist at the American Enterprise Institute, a Washington think tank.

North Korea continues to press ahead with infrastructure projects, such as the recent opening of a new international airport terminal near Pyongyang. The emergence of semiprivate businesses such as taxi companies in recent years has provided the state with fresh sources of income, said Go Myung-hyun, an expert on North Korea at the Asan Institute for Policy Studies, a Seoul-based think tank.

And China’s ban starting this year on highly polluting types of coal somewhat shields North Korea’s coal exports from a fall in demand because they are mostly high-quality anthracite, a type that produces little smoke.

Still, the fall in trade revenue increases the challenge for Mr. Kim, who has said economic development is a top policy priority despite his reluctance to embrace Chinese-style economic reforms, such as privatizing state businesses. In 2012, Mr. Kim said in a speech that citizens should “not have to tighten their belts again,” and North Korea’s state media frequently tout the construction of apartment buildings and leisure facilities as examples of progress.

Andrei Lankov, a professor at Kookmin University in Seoul, says the regime has been trying to reduce its dependence on China, which now absorbs as much as 90% of Pyongyang’s exports, compared with around 50% in the early 2000s, according to the Korean International Trade Association in Seoul. The value of those exports last year was $2.9 billion, Chinese customs data show.

One sign of that concern came in late 2013 when Mr. Kim executed his own uncle, Jang Song Thaek, an official who was widely seen as a proponent of closer trade links with Beijing. State media blamed Mr. Jang for “selling off precious resources of the country at cheap prices.”

Pyongyang’s diplomats have traveled extensively around the world over the past year, including a rare foreign ministry visit to India in April. Still, many nations remain wary of boosting trade links as North Korea continues a nuclear standoff with the U.S. and other nations.

Last year, North Korea and Russia signed an ambitious economic development agreement, but while Pyongyang and Moscow have warmed politically—reflecting shared hostility toward the U.S.—few economists see much potential for significant growth in bilateral trade; North Korea’s exports to Russia totaling just $10 million in 2014.

U.S. and South Korean diplomats say that greater international scrutiny has crimped another North Korean revenue stream: illicit arms and drugs.

Many economists say South Korea is the North’s only near-term option to offset declining trade income from China and may have motivated Pyongyang in August to reach an accord to end a confrontation after the two sides exchanged artillery fire.

“South Korea is the one potentially interested partner that could provide a significant boost to North Korea’s economy,” said Troy Stangarone, senior director for congressional affairs and trade at the Korea Economic Institute in Washington.

The South imposed economic sanctions on the North in 2010, blocking most bilateral trade, in response to the sinking of a warship that killed 46 sailors. Trade has since edged up and Seoul says it is willing to discuss increasing economic cooperation if progress is made in other areas, such as reuniting families separated by the Korean War.

Lee Jong-kyu, a research fellow at the Korea Development Institute in Sejong, South Korea, said the North may also seek new revenue by ramping up its exports of manual laborers to places such as Russia and the Middle East, try to boost tourism or build up light industry. North Korea also has tried to reboot plans for foreign investment in special economic zones—with little success, say foreign officials.

Ultimately, while Chinese diplomats express frustration with the regime in North Korea, it is unlikely that Beijing would allow its volatile neighbor to become destabilized by a fall in trade and spark a humanitarian disaster on its doorstep, observers say.

“If Beijing is a generous uncle, this will not prove to be a perilous problem because uncle will send more allowance,” Mr. Eberstadt said.

Read the full story here:
Cash Crunch Hits North Korea’s Elite
Wall Street Journal
Alastair Gale
2015-10-8

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China – DPRK open new shipping route

Friday, September 25th, 2015

According to Xinhua:

A bulk cargo and container shipping route between China and the Democratic People’s Republic of Korea (DPRK) has been put into operation, focusing on coal import from DPRK and grocery export from China, authorities said on Friday.

The route, linking Longkou port of east China’s Shandong Peninsula to Nampo port of western DPRK was the first scheduled shipping line for bulk cargo and container between the two countries. It is serviced by seven ships, which complete one circuit of the ports every ten days, according to Longkou Port Group.

The route was jointly established by Longkou Port Group, Liaoning Hongxiang Industrial Group and a shipping company in DPRK in a bid to promote international trade under China’s “Belt and Road” initiative.

Located at the Bohai Sea coast and built in 1914, Longkou port handled 75.07 million tonnes of cargo and 550,000 TEU of containers last year.

“The opening of the route can help improve the service function of the port and is of great significance for the port’s transformation and upgrading,” said Zhang Haijun, general manager of Longkou Port Group.

Read the full story here:
Bulk cargo and container shipping route links China, DPRK
Xinhua
2015-9-25

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China announces Longkou-Nampho container shipping route

Friday, September 25th, 2015

According to Reuters:

China has launched a bulk cargo and container shipping route connecting it to North Korea that will focus on importing coal and exporting groceries, state news agency Xinhua said on Friday, citing a Chinese port authority.

The route will connect China’s Longkou port in eastern China’s Shandong province with the North Korean port of Nampo, and will be serviced by seven ships, it said.

Though China’s coal imports have slumped 32 percent in the first eight months of the year, deliveries from North Korea have surged 33 percent to 13.4 million tonnes, making it China’s third biggest foreign supplier.

“This big rise is probably down to North Korea’s industrialisation, which should have spurred an increase in production,” said Yao Yao, a coal analyst with China’s Guangfa Securities.

The new route was established by the Longkou Port Group, Liaoning Hongxiang Industrial Group and a North Korean shipping company, Xinhua reported. It said the Longkou Port handled 75.07 million tonnes of cargo and 550,000 TEU of containers in 2014.

Here is the original story in Xinhua:

A bulk cargo and container shipping route between China and the Democratic People’s Republic of Korea (DPRK) has been put into operation, focusing on coal import from DPRK and grocery export from China, authorities said on Friday.

The route, linking Longkou port of east China’s Shandong Peninsula to Nampo port of western DPRK was the first scheduled shipping line for bulk cargo and container between the two countries. It is serviced by seven ships, which complete one circuit of the ports every ten days, according to Longkou Port Group.

The route was jointly established by Longkou Port Group, Liaoning Hongxiang Industrial Group and a shipping company in DPRK in a bid to promote international trade under China’s “Belt and Road” initiative.

Located at the Bohai Sea coast and built in 1914, Longkou port handled 75.07 million tonnes of cargo and 550,000 TEU of containers last year.

“The opening of the route can help improve the service function of the port and is of great significance for the port’s transformation and upgrading,” said Zhang Haijun, general manager of Longkou Port Group.

Read the full story here:
China Launches North Korean Shipping Route
Reuters
2015-9-25

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Inter-Korean trade returns to pre- May 24 sanctions levels

Thursday, September 3rd, 2015

According to Yonhap:

Inter-Korean trade in the first seven months of this year recovered to levels before Seoul imposed blanket sanctions against the North for the sinking of its naval ship, government data showed Thursday, thanks to increased exchange via a joint industrial complex.

According to the Korea Customs Service (KCS) data, the value of cross-border trade reached US$1.53 billion in the January-July period, which is roughly on par with $1.56 billion reported for January-July of 2009. The total also marks a 22.4 percent increase from $1.25 billion worth of goods traded in 2014.

In the seven-month period, South Korea shipped some $716 million worth of intermediate goods and components to the North and brought in $816.5 million in assembled products.

The increase was attributed to a rise in the unit cost of products traded through the joint industrial park in the North’s border city of Kaesong.

Two months after the North’s deadly torpedoing of the Navy ship Cheonan in March 2010, Seoul slapped the sanctions on Pyongyang, severing almost all exchanges with the communist North.

In 2010, trade between the two Koreas plunged to just over $1.14 billion, while in the following year, the figure fell to just under $11.2 billion. Trade figures rose to around $1.27 billion in 2012, but nosedived again to $604 million in the following year after Pyongyang pulled out its workers from Kaesong, effectively shutting down the complex for five months.

Almost all of the trade during the seven-month period centered around the Kaesong industrial complex just north of the demilitarized zone that separates the two Korea.

The zone, which was excluded from the sanctions, is home to more than 120 South Korean companies that employ about 55,000 North Korean workers. It was created following the landmark 2000 inter-Korean summit and first churned out products in late 2004.

Besides the exchange via Kaesong, the KCS said there is no other meaningful trade between the two sides, since the sanctions cut off most exchanges with the North, including tourism, commercial transactions and private aid. Even the Kaesong complex is affected because no new investments are permitted.

Related to the rise in trade, Chung Ki-sup, the chairman of the Kaesong Industrial Complex Companies Association, which represents the interests of local firms operating in the North Korean complex, said he wants the two Koreas to hold talks that would ease restrictions.

“Despite the increase in trade, it is fundamentally impossible to expect any real change under the present circumstances,” the entrepreneur said. He pointed out that more trade with the North can benefit the South Korean economy in a period of slow growth.

Read the full story here:
Inter-Korean trade returns to pre-sanctions levels
Yonhap
2015-9-3

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Bank of Korea on the DPRK’s economic performance in 2014

Friday, July 17th, 2015

The Bank of Korea has published its annual assessment of the North Korean economy. The report on economic performance in 2014 can be downloaded here (PDF).  Previous years’ reports can be downloaded from my economic statistics page.

The report claims that the DPRK’s GDP increased by 1% in 2014. Nominal GNI was valued at 34.2 trillion KRW, (2.3% of South Korea). GNI per capita stood at 1.388 million KRW, (4.7% of South Korea).

Growth a number of industries was positive, but had fallen from 2013 rates. Among these industries were mining, as wells as agriculture, forestry, and fishing (combined) and heavy industry and chemical industry (combined).  Growth in light industry was higher than in 2013 as was electricity, gas and water (combined) and services. The biggest annual turnaround came in the construction industry, which saw a growth rate of 1.4% following a -1% fall in 2013.

The volume of North Korea’s external trade (sum of exports and imports of goods, excluding inter-Korean trade) amounted to $7.61 billion dollars in 2014 (up $0.27b from 2013). Exports totaled $3.16 billion (down 1.7% from 2013). Imports totaled $4.45 billion (up 7.8% from 2013).

Here is coverage in Yonhap:

North Korea’s economic growth is estimated to have slowed last year from a year earlier as its staple primary industries posted tepid performances, data showed Friday.

The North’s economy is projected to have expanded 1 percent in 2014, decelerating from the 1.1 percent on-year growth in the previous year, according to the data compiled by South Korea’s central bank, the Bank of Korea (BOK).

It has posted economic expansions for four years in a row since it contracted 0.9 percent and 0.5 percent in 2009 and 2010, respectively.

The BOK explained that the North’s construction sector lent support to the overall growth, bouncing back to a 1.4 percent on-year growth last year from a 1 percent fall the previous year.

Pyongyang’s agricultural and fishery industry, which accounts for 21.8 percent of its total output, expanded 1.2 percent last year, slowing from 1.9 percent growth in 2013.

Growth in its mining and manufacturing sector, which accounts for 34.4 percent of overall output, gained 1.1 percent, down from 1.5 percent a year earlier.

The data, meanwhile, showed that North Korea’s nominal gross national income (GNI) came in at 34.2 trillion won (US$29.8 billion) last year, which is roughly 2.3 percent of South Korea’s 2014 GNI of 1,496.6 trillion won.

Since 1991, the BOK has been releasing the growth estimate of the North based on data provided by Seoul’s intelligence agency and other institutions specializing in North Korean studies.

Here is coverage in Bloomberg (with carts!).

http://www.bloomberg.com/news/articles/2015-07-17/north-korea-grew-1-in-2014-is-south-s-best-guess

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Production at Kaesong Industrial Complex up in 2015

Thursday, July 9th, 2015

According to Yonhap:

The value of production made at an inter-Korean industrial park rose 26 percent in the January-April period from a year earlier despite a drawn-out row sparked by North Korea’s unilateral wage hike, government data showed Thursday.

The value of production at Kaesong Industrial Complex in the North reached a combined US$186 million in the first four months of the year, compared with $148 million a year earlier, according to the Unification Ministry.

In particular, the production at the park rose 21.8 percent on-year to $51.1 million in March and gained 19.7 percent to $50 million in April, when a wage dispute between the two Koreas heightened.

In a separate report unveiled in April, the ministry said that the volume of inter-Korean trade hit a record high in 2014 on growth in exchanges at the industrial park despite Seoul’s punitive sanctions on Pyongyang.

The value of inter-Korean trade reached $2.34 billion last year, up 106.2 percent from a year earlier, it said.

Here is coverage in Arirang News.

Read the full story here:
Production at joint industrial park rises 26 pct in Jan.-April
Yonhap
2015-7-9

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North Korea’s trade volume in 2014: $7.6 billion USD

Wednesday, June 17th, 2015

Institute for Far Eastern Studies (IFES)
2015-6-17

Last year North Korea’s foreign trade volume (excluding economic exchanges with South Korea) totaled 7.6 billion USD, a 3.7 percent increase over the previous year. According to a report recently put out by KOTRA (Korea Trade-Investment Promotion Agency) entitled “North Korea’s International Trade Patterns in 2014,” last year North Korean exports totaled 3.16 billion USD, while imports totaled 4.45 billion USD. This represents a 1.7 percent decrease in exports and 7.8 percent growth in imports over the previous year. As a result North Korea’s trade deficit in 2014 leaped to 1.29 billion USD, a 41 percent increase over 2013. This expansion of trade appears to be a product of growth in the import of goods such as plastics, machinery and electricity, as well as growth in the export of clothing.

Among North Korea’s main exports, mineral fuels such as coal, at 1.18 billion USD, represented 37.2 percent of total exports and was the country’s main export product. Meanwhile, exports of clothing and components saw the biggest growth rate, at 23.7 percent, and amounted to 640 million USD. In regards to other exports, iron ore totaled 330 million USD (18.3 percent decrease over 2013), fish and crustaceans totaled 140 million USD (21.9 percent increase), and steel amounted to 130 million USD (22 percent increase).

North Korea’s main imports were as follows: mineral fuels (750 million USD – 4.7 percent decrease), electric equipment (430 million USD – 54.8 percent increase), furnaces and machinery (330 million USD – 3.3 percent increase), motor vehicles and parts (230 million USD – 9.6 percent decrease), and plastic (200 million USD – 31.8 percent increase).

It appears North Korea’s main trading partner is still China. Last year its trade volume with China reached 6.86 billion USD (exports – 2.84 billion USD, imports – 4.02 billion USD), a 4.9 percent increase over 2013. This contributed to a slight increase in North Korea’s reliance on trade with China. Its proportion of trade with China went from 89.1 percent in 2013 to 90.1 percent in 2014. After China, the countries that North Korea traded most with were Russia, India, Thailand, and Bangladesh, in that order. Hong Kong and Ukraine dropped off the list of North Korea’s top ten trading partners, and Pakistan and Germany newly appeared on the list at 8th and 10th place, respectively. Trade with Japan has been nonexistent since 2009. Due to its economic sanctions against North Korea, the United States also had no economic exchanges with North Korea in 2014 outside of relief aid, mostly in the form of medical supplies and equipment.

As North Korea’s over-reliance on trade with China continued, its trade deficit widened due to the decrease in exports and surge in imports. Considering factors such as the complementary trade structure (including contract processing and natural resource trade), the protraction of North Korea’s political and economic isolation, and their highly interdependent relationship, it seems likely that North Korea’s strong reliance on trade with China will continue in the future.

[NOTE: KOTRA data excludes inter-Korean trade. If South Korean trade were included, it would be North Korea’s second largest trading partner, and the composition of trade allotted to China would fall.]

Here is coverage in Yonhap:

North Korea’s global trade expanded in 2014 from a year earlier, but its trade deficit also widened due to a drop in exports, a report showed Friday.

According to the report by the Korea Trade-Investment Promotion Agency, North Korea’s trade came to US$7.61 billion last year, up 3.7 percent from a year earlier. The figures did not count its trade with South Korea.

North Korea’s exports shrank 1.7 percent on-year to $3.16 billion last year, while imports grew 7.8 percent to $4.45 billion over the same period, the report showed.

Based on the figures, North Korea posted a trade deficit of $1.29 billion last year, with its shortfall jumping 41 percent from the year before.

Minerals and fossil fuels, including coal, were among the country’s major export items as its overseas sales stood at $1.18 billion, which accounted for 37.2 percent of its total annual exports.

The report showed that North Korea continues to depend heavily on China for its trade.

Last year, bilateral trade between the two countries reached $6.86 billion, up 4.9 percent from a year earlier. North Korea’s dependence on China in trade increased slightly from 89.1 percent in 2013 to 90.1 percent last year, according to the report.

Read the full story here:
N. Korea’s global trade expands but trade gap widens: report
Yonhap
2015-6-5

Here is coverage in UPI:

South Korea’s trade promotion agency KOTRA stated North Korea’s trade with the outside world rose to $7.61 billion in 2014, a marginal increase from the previous fiscal year.

In its annual report on North Korea trade trends released Friday, KOTRA noted North Korean exports scaled down while demand for outside materials was up between 2013 and 2014, Yonhap reported.

Numbers indicated North Korea’s exports decreased by 1.7 percent to $3.16 billion in 2014, while imports rose by 7.8 percent to $4.45 billion.

North Korea’s trade deficit jumped to $1.29 billion, up 41 percent from 2013.

In 2014 North Korea imported more electrical equipment, machinery and plastics than it did a year earlier, while exporting more clothing and accessories, according to KOTRA.

The country’s primary export is coal, a trade valued at $1.18 billion and comprises 37.2 percent of North Korea exports.

Clothing and accessories inched up in its share of total exports, rising to $640 million – up 23.7 percent from 2013.

The country’s primary import was fossil fuels at $750 million, followed by electrical equipment at $430 million and boilers, machinery at $330 million.

China remained North Korea’s No. 1 trading partner, reported South Korean newspaper Kyunghyang Sinmun.

In 2014 China-North Korea trade inched up 4.9 percent to $6.87 billion. North Korea imported more than it exported from China. Exports were estimated at $2.84 billion while imports totaled $4.03 billion.

A KOTRA official told Yonhap North Korea’s protracted political and economic isolation has led to a high dependence on trade with China, facilitated by a complementary trade structure between the two countries.

South Korea’s report stated North Korea’s trade dependence on China was as high as 90.1 percent, dwarfing Pyongyang’s next major trading partner, Russia, as well as India, Thailand and Bangladesh.

Read the full story here:
North Korea’s trade deficit continued to grow, says SKorea
UPI
Elizabeth Shim
2015-6-4

Here is coverage in the Joong Ang Ilbo:

North Korea’s international trade volume reached $7.6 billion in 2014, rising by 3.7 percent year-on-year, according to a report on Friday by the Korea Trade-Investment Promotion Agency (Kotra).

The growth was backed by Pyongyang’s increased import of electronic devices and machinery and its rising export of clothing, according to the agency.

Kotra said North Korea’s export volume was worth $3.2 billion last year, a 1.7 percent decline from the previous year.

On the other hand, the reclusive state imported $4.5 billion worth of goods, up 7.8 percent. The widening disparity between imports and exports extended the North’s trade deficit by 41 percent to $1.3 billion.

China remained Pyongyang’s biggest trading partner in 2014, the report said, followed by Russia, India, Thailand and Bangladesh. Its trading volume with China increased to $6.9 billion, with imports from that nation accounting for $4 billion and exports $2.9 billion. The overall figure is a 4.9 percent increase from 2013, nudging up the North’s overall degree of dependence on foreign trade with China to 90.1 percent from 89.1 percent.

Hong Kong and Ukraine were no longer in the North’s top 10 trading partners, but Pakistan and Germany made their way onto the list. By contrast, Japan has not traded with the North since 2009, while the United States only provided it with aid and medical equipment.

Kotra noted that the North’s key export products include mineral resources such as coal and brown coal, which account for 37.2 percent of all its exports. Clothing and fisheries products were also among its major exports, with garment shipments recently seeing rapid growth.

The country’s other major export products consist of crude oil, refined oil, machinery, electronic devices, cars and auto parts. The value of resource imports decreased by 4.7 percent last year, while those of electronic machines surged by 54.8 percent.

Kotra expects that the North will continue to rely on its neighboring key ally going forward.

“2014 saw increasing dependence on China, while North Korea extended trade deficits due to the increase in imports and the decline in exports,” Kotra said in a statement. “When considering geopolitical factors and mutually beneficial trade structure, the North is expected to show further reliance on China.”

The Korea Development Institute, a state-run think tank, released its own report that paints dim prospects for the North’s exports.

The institute said the North’s exports of anthracite coal to China are expected to fall in the years to come due to China’s dwindling steel industry and stronger environmental regulations. Its exports of the coal to its ally have been considered the backbone of its economy, accounting for about 40 percent of its overall exports.

The report called on the North to reorganize its trade structure in order to avoid being seriously affected.

“The time has come for North Korea to reshape its external trade structure,” it noted.

Read the full story here:
North’s trade volume rises
Joong Ang Ilbo
2015-6-6

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