Sanctions spike North trade deficit with China

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Sanctions spike North trade deficit with China

North Korea’s trade deficit with China reached the highest level ever in the first half of 2017 as the country’s exports to its staunchest ally slipped 24 percent, a sign that United Nations Security Council resolutions were having an effect, according to a local economic research institute.

In a report on China-North Korea trade from January to June this year, which was published Monday, the Korea Institute for International Economic Policy analyzed that North Korea exported $840 million worth of goods to China, 24 percent down from the same period in 2016.

But the North’s imports from China, excluding crude oil, reached $1.66 billion, which was 18 percent higher than the previous year. Crude oil wasn’t included in the study because China’s customs authority omits the data in calculating bilateral trade, the research institute noted.

North Korea’s trade deficit was calculated at $810 million, which was 2.8 times higher than last year’s first half. The total trade volume between the two countries from January to June was $2.5 billion, 0.8 percent down from 2016.

The steep reduction in North Korean exports to China was chiefly visible in coal, which until last year accounted for nearly 40 percent of all the country’s shipments overseas.

In February, Beijing announced a suspension of coal imports for the rest of the year, though it recently admitted to importing 1.6 million tons of North Korean coal in August alone, using the UN Security Council’s buffer period for implementing the ban.

Nearly $224 million worth of North Korean mineral resources, including anthracite, a type of coal, was exported to China, down 54 percent from the previous year.

Shipments of garments dipped 17.3 percent, but still ranked as the primary export to China with $227 million worth delivered. Seafood exports gained 88.8 percent to reach some $90,000.

The North’s chief import from China was electronics, which rose 30.7 percent year-on-year to reach $177 million.

Around $123 million worth of artificial filament was exported from China to North Korea, up 55.5 percent than last year.

The Korea Institute for International Economic Policy said bilateral trade will likely plummet further in the second half of this year when the latest UN Security Council resolutions officially go into effect, though that would hinge on Beijing’s participation. The sanctions ban North Korea’s exports of seafood, coal and textiles.

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