North saw its highest external trade deficit last yearNorth Korea experienced its highest external trade deficit on record last year, according to Chinese custom records, indicating international sanctions have cut off much of the regime’s cash flow.
Citing Chinese customs documents on trade with North Korea, Voice of America (VOA) reported Wednesday that North Korea imported around $2.57 billion worth of goods from China last year while exporting only around $210 million in products.
Pyongyang’s total trade deficit last year with China - its largest trade partner by far - amounts to around $2.36 billion, the highest on record since the country first disclosed its trade figures in 1998.
That number is far higher than the country’s previous pre-sanctions deficit record of $1.28 billion in 2008, when the world was reeling from a global recession. In most other years, the deficit usually teetered at around a billion dollars, though from 2017, when sanctions began taking effect, the regime saw its deficit double.
This trade imbalance can largely be attributed to the sanctions outlined in United Nations Security Council resolutions on the regime’s nuclear and missile tests.
“North Korean exports plummeted because the international community blocked the country’s top exports, like coal, textiles and seafood,” said a South Korean government official. “By contrast, the scale of the country’s imports from China hasn’t decreased because North Korea is heavily reliant on China to meet its needs.”
While statistics on the regime’s external trade volume vary, the South’s Korea Trade-Investment Promotion Agency (Kotra) notes that North Korea’s trade balance with China remained stable in the early part of the decade. However, in 2017 North Korea conducted several nuclear tests and launched intercontinental ballistic missiles, prompting the UN Security Council to impose sanctions on its economy. China, which grew to account for more than 90 percent of Pyongyang’s external trade, followed suit by severing imports on banned goods.
Records from China’s General Administration of Customs testify to Beijing’s compliance to the sanctions, which was most recently seen with the repatriation of North Korean overseas workers. But questions still remain as to how Pyongyang is able to sustain a continuous current account deficit with its northern neighbor given how much of its cash flow has dried up in recent years.
BY SHIM KYU-SEOK, JEONG YONG-SOO [email@example.com]
More in Politics
Moon says it's too early to talk about pardoning Park Geun-hye, MB
Oh Se-hoon announces bid to be Seoul mayor again
Supreme Court says ousted president was guilty
Supreme Court confirms former president Park’s guilt, jail term