Dependence of North on China still growing

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Dependence of North on China still growing

North Korea’s economic dependence on China continues to grow and could make the communist state further open its borders, a report said.

According to a report by the Bank of Korea, North Korea’s trade reliance on China was 89 percent last year. This is a significant increase from 2000, when North Korea’s trade dependency on China was roughly around 20 percent.

North Korea’s trade with China in 2000 was around $500 million, which increased more than tenfold to $5.6 billion last year.

Imports from China grew 20.7 percent in 2010 compared to the previous year and 38.9 percent last year. Exports shot up 49.8 percent in 2010 and a whopping 107.4 percent last year.

China’s investment in North Korea has continued although it fell slightly after China suffered from the global financial crisis of late 2008. North Korean investment in China grew from $1 million in 2003 to $12 million in 2010.

Trade between the two Koreas has shrunk in recent years. In 2000, inter-Korean trade totalled $240 million, which went up to $810 million in 2008. Last year, with frozen relations, trade between the two countries was almost nonexistent.

Last month, China and North Korea agreed on jointly developing and managing three special economic zones: Hwanggumpyong, the Rason Economic Zone and Wihwa Island.

The report noted that the development of the economic zones will likely have a major impact on North Korea’s economy, especially after China’s capital and technology are injected.

“Economic cooperation between China and North Korea will act as an opportunity to open up North Korea in the long run,” said Choi Ji-young, the BOK official who wrote the report, “especially if the development of the special economic zones near the border succeeds.”

By Lee Ho-jeong []

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