The Korea Herald

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N.K.’s economic dependence on China expected to deepen

By Korea Herald

Published : Dec. 23, 2011 - 16:22

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North Korea’s economic dependence on China is expected to deepen following the death of its leader Kim Jong-il, making the North’s economy more “subordinate” to its strongest ally, experts said Friday.

North Korea’s reliance on China for trade already increased in the past few years after South Korea cut almost all business relations with its communist neighbor and the international community banned commercial trade with the country because of its nuclear ambitions.

According to the report by the Korea Trade-Investment Promotion Agency, North Korea’s trade with China totaled $3.47 billion last year, after passing the $2 billion mark in 2008 and the $1 billion level in 2003. For this year, their bilateral trade is expected to top $6 billion,

With international sanctions in place and a reluctance to open up its economy, the North’s dependence on China remained high at 78.5 percent in 2009 and 80.2 percent in 2010, according to government data. 

Experts say North Korea’s economy may slip further into deeper isolation from the international community and its self-proclaimed self-reliant economy is collapsing, so China is emerging as the communist state’s key supplier of economic goods.

“After Kim’s death, China will continue to help North Korea because the North is politically important,” said Yu Seung-kyong, a researcher at LG Economic Research Institute.

Trade between South and North Korea has been shrinking as their relations became more strained in recent years.

During the first 10 months of this year, inter-Korean trade came to $1.42 billion, down 12.6 percent from the same period a year earlier, according to government data.

Regardless of the global economic slump and a slowdown in the Chinese economy, economic relations between North Korea and China are highly likely to increase, which could have a negative impact on inter-Korean relations, experts said.

Not all experts agree, however.

“North Korea may seek a variety of measures to reduce its high dependence on China, including boosting economic ties with Russia and expanding trade with South Korea,” said Choe Myung-hae, a researcher at the Samsung Economic Research Institute. 

(Yonhap News)