N.Korea Still Has Plenty of Cash to Buy Goods from China

  • By Lee Kil-seong

    July 11, 2017 09:38

    China still exports plenty of essential goods to North Korea, whose purchasing power does not seem to have suffered significantly despite Beijing's ban on coal imports from the hermit country, the Financial Times reported Monday.

    Coal accounts for 40 percent of the North's total exports. According to the UN, the North earned US$94 million a month on average from coal exports from early 2015 until 2016.

    It was therefore widely expected that the Chinese ban would deal a direct blow to the North's cash flow, but the North seems to have found ways round the ban either by smuggling or by selling the coal to Russia, the paper said.

    China Customs data shows that the North's exports to China dwindled from January until April this year, with exports in April about half of those in January. But they rebounded in May.

    The North's imports from China, meanwhile, shrank only in February. "But despite expectations that the move [the coal ban] would reduce Pyongyang's purchasing power, the value of Chinese exports to North Korea stayed strong in April and May," the FT pointed out.

    Major items are fuel, oil products, and coke for its steel mills.

    Pyongyang's "shopping list" includes a number of petrochemical components and ingredients used in fertilizer or in motor fuel blending, a Chinese trader in Dandong told the FT. Its imports of cars, cooking oil, ship engines, oranges and tomatoes from China actually rose.

    "It is also possible that North Korea continued to ship coal elsewhere, including Russia, and used the cash earned to continue to buy goods from the Chinese," the FT added. "Any analysis of North Korea's domestic economy or of its true trade with China is partially a guessing game, because some data simply drop off. For instance, crude shipments have not been reported since 2013."

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