North Korean Trade with China Hit More by COVID-19 than Sanctions

- Its trade with China shrank 73 percent in the three quarters this year and surpassing 57 percent decline due to sanctions against North Korea -

- It is set to fall 80 percent for the whole year with the strengthened border controls for the 8^th Party Congress in January next year -

North Korea's trade with China shrank 73 percent through September year-on-year due to its closure of borders to safeguard the country from the COVID-19 pandemic.

According to a report titled “A Trend Analysis on 2020 Third Quarter North Korea's Trade with China '' issued on November 27th by the Korea International Trade Association (Chairman: Kim Young-ju), the trading recovered slightly in May and June, but started dropping again from July.

What is particularly noteworthy is that the decline in trade between North Korea and China caused by the border shutdown to prevent the spread of COVID-19 is greater than during the international sanctions against North Korea. Since the enforced sanctions against North Korea in the second half of 2017, trade between North Korea and China dropped by 57 percent in January-September, 2018, whereas the trade plunged by 73 percent during the same period in 2020. Considering the trend that North Korea continues to block borders through November, the on-year drop in trade between North Korea and China will be 80 percent by the end of this year

Cumulative imports from China to North Korea for the first three quarters dropped by 73 percent year-on-year. The drop was relatively lower for necessities such as cooking oil (-19.3%), flour (-36%), sugar (-2.3%) and medical supplies (-24.6%). Cumulative exports to China also decreased by 70 percent year-on-year through September. Exports of manufactured items, including watches (-80.9%) and wigs (-89.8%), heavily impacted by the border restrictions. 

In contrast, North Korea’s trade with Russia between January and August rose 15 percent on year as North Korea significantly increased imports of food such as flour (1,340%), and sugar (4,324%) and medical supplies (121.3%) from Russia. 

They are the essential items that North Korea currently needs most. Considering the sanctions that have persisted in recent years and the foreign currency situation in North Korea caused by this year's low exports due to the outbreak of coronavirus, it is speculated that the imports from Russia may have been treated as relief aid when passing customs. 

An official at the Korea International Trade Association said, “North Korea strengthened border controls from July in preparation for the 75^th anniversary of the Workers’ Party on October 10^th and its international trade in the second half of the year dropped by a large amount. North Korea is also paying attention to quarantine as top priority for the 80-day battle for the 8^th Party Congress in January next year. Therefore, the trade between North Korea and China is expected to record a significant decline of 80 percent this year,” and added, “North Korea will not be able to sustain the current level of blockade next year and there is a possibility that North Korea will expand imports in food and products related to health and hygiene.").