North blunts prices with China goods

TOKYO -- North Korea spent $200 million to import daily necessities from China last month, a Japanese source familiar with the North said yesterday. The imported goods were reportedly supplied to stores in major cities.

"Since July wages have jumped, increasing the purchasing power of North Koreans," the source said. "But production still falls short of demand."

The source said Pyeongyang is worried about inflation; the government predicted supply shortages would begin around November and black markets would prosper. The Workers Party, thus, bought goods from China to ensure supply and keep inflation at bay. "In the past, the Workers Party has spent its money to buy meat and rice to give to the people on special occasions," the source said. "But this is the first time it has imported goods to combat inflation."

The imports stabilized the prices of staples like rice, the source said. But the Workers Party is reportedly low on cash and unless domestic production rises inflation is unavoidable, he said.

by Oh Day-young