North Korea’s Trade with China in 2019

Abstract

North Korea declared a “breakthrough in sanctions” through self-rehabilitation at the Labor Party Central Committee meeting held on December 28-31, 2019. How is the North Korean economy now? In 2019, North Korea’s imports and exports to China each slightly increased compared to the previous year, showing some adaptation to sanctions against North Korea, but the already deformed structure and large deficit have worsened. Due to UN sanctions, the import of items necessary for production (machinery, electronics, and transportation) was completely banned, and overall industrial production was adversely affected.North Korean authorities are trying to minimize the impact of sanctions on the North Korean economy. The most representative measure has been to continuously increase the import of items not subject to sanctions. Since 2018, North Korea has responded to the sanctions by diversifying its import regions. Even during the sanctions, North Korea continued to promote the replacement of imported goods in the food industry with domestic products and construction facilities, in line with industrial policies set by Chairman Kim Jong-un, and the import of related items increased. In addition, as the demand for consumer goods increases, it seems that imports are increas-ing, maintaining the purchasing power of North Koreans to some extent. In summary, in 2019, the North Korean economy showed signs of slowing industrial produc-tion, but the nation also tried to minimize the adverse effects of sanctions by continuously in-creasing the import of non-sanctioned items. In the first quarter of 2020, the North Korean economy suffered from both sanctions and COVID-19.