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North Korea’s Troubled Economy: $22 Billion Trade Deficit with China

WorldNorth Korea's Troubled Economy: $22 Billion Trade Deficit with China
Pyongyang Rodong Sinmun=News1

North Korea’s trade deficit with China over the past 30 years was revealed to have exceeded $22 billion (29.997 trillion KRW).

Voice of America (VOA) reported on the 11th, citing trade balance data from China’s General Administration of Customs, the Korea Trade Association, and the Korea Trade-Investment Promotion Agency, that North Korea’s cumulative trade deficit with China from 1994 to 2023 amounted to $22.272 billion.

North Korea has not recorded a surplus in the past 30 years. After recording a deficit of $225.3 million in 1994, it maintained an annual deficit of $200 million to $700 million before exceeding $1 billion in 2008.

The deficit surged in 2017, increasing to $1.677 billion in 2017 and $2.727 billion in 2019.

VOA analyzed that this was because sanctions against North Korea were significantly strengthened, leading to embargoes on prominent North Korean exports such as coal and clothing.

Due to the coronavirus (COVID-19), trade between the two countries significantly decreased, and North Korea’s trade deficit with China fell below $1 billion in 2020-2022. Still, it significantly increased again last year to $1.737 billion.

North Korean economy expert Professor William Brown of the University of Maryland told VOA, “As North Korea hardly trades with any other country, its deficit with China is essentially its deficit with the entire world. This means that they have to beg (from other countries). Since they don’t export, they have to beg elsewhere for food,” he said.

He also explained that North Korea has to earn foreign currency through cyber attacks or by sending overseas workers since standard imports and exports are impossible.

According to the General Administration of Customs of China, South Korea maintained a trade surplus with China of tens of billions of dollars every year from the mid-1990s until last year. On the contrary, the Korea Customs Service announced that it recorded a trade deficit with China for the first time last year. VOA explained that this is due to differences in the method of trade aggregation by item and region.

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