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China's trade with North Korea increases

The boost reflects Beijing's decision to prop up its failing ally, which is shunned by most of the world as a pariah state.

December 28, 2012|By Barbara Demick, Los Angeles Times

BEIJING — Shunned by the most of the world as a pariah state, North Korea is cementing ties with its old patron, China, with trade volume between them hitting new highs, according to South Korean statistics.

The trade volume in 2011 soared a record 60% to $5.63 billion and although final data is not yet available, analysts expect 2012 to be another banner year.

The dramatic increase reflects a conscious decision by Beijing in 2011 to prop up its failing ally. Shortly before his death a year ago, North Korean leader Kim Jong Il made three trips to China to secure support for rebuilding his ruling Workers' Party, the equivalent of the Communist Party in China. The Chinese also have been keen to prop up Kim's 29-year-old son and successor, Kim Jong Un.

"This is just the beginning of further big increases in Sino-North Korea trade," explained John Park, an expert in China-Korean relations at MIT University. "The primary goal of the Communist Party of China is to more effective manage what is referred to as the North Korean instability variable."

Park said that North Korean state trading companies are working in China, which enables the regime to generate new sources of revenue for its own ruling elite.

Beijing last year also gave permission for tens of thousands of North Koreans to work in factories in northeastern China, usually sending a large share of their earnings back to their government.

With Chinese help, the North Korean economy grew for the first time in three years, albeit a modest 0.83%. In the last year, Pyongyang has undergone its first significant facelift in decades, adding modern apartment blocks, a new airport terminal, stores and restaurants and a dolphinarium to the North Korean capital.

Nevertheless, South Korean per capita income remained about 19 times higher than North Korea's $1,239.

North Koreans buy most of their consumer goods and fuel from China. China accounted for 70% of North Korea's foreign trade last year, the highest since the South Korean statistic office began calculating the figures.

The South Korean figures provide a glimpse of the economic health of one of the world's most secretive countries. North Korea does not report its trade statistics.

Zhang Liangui, a Korean expert at Beijing's Central Party School, said China had stepped up its trade with North Korea to make up for other countries cutting back.

"Because North Korea's trade with other countries has shrunk, China is making up the difference," said Zhang, adding that China makes sure it is not supplying goods banned under United Nations sanctions.

barbara.demick@latimes.com

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