THE NEW YORK TIMES: North Korea’s Trade Troubles Could Point to a Need for Cash

09/19/2017

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By: KEITH BRADSHER

DANDONG, China — After sunset, when American spy satellites can no longer see as well, the main bridge connecting China to North Korea comes to life.

One by one, trucks laden with Chinese goods rumble across Sino-Korean Friendship Bridge here, long an economic lifeline for North Korea. The covered trucks offer little sign of what might be inside, though Chinese customs data offers clues: heavy machinery, refrigerators, even beer.

The data also suggests something else. The trucks are increasingly coming back empty. And that could present a potential weak point that the Trump administration and others could exploit, if China is willing to go along, as they look for ways to persuade North Korea to give up its nuclear weapons and ballistic missiles.

Even as China sells more goods to North Korea, it is buying less from there, according to trade data and experts on the relationship between the two. North Korea’s finances are hidden by a veil of secrecy. But that worsening trade imbalance appears to be deepening North Korea’s need for credit from China or for cold, hard cash from somewhere else.

“My best guess is that North Korea is receiving trade credits from those providing it with goods and services — that is to say, China,” said Steve Hanke, an economist at Johns Hopkins University who studies China’s financing of rogue regimes like those in North Korea and Venezuela.

The steady flow of Chinese goods may be a clue to why economic sanctions have had little effect on North Korea. While the sanctions may cut North Korea’s export income, it can still procure goods to keep its urban elites happy with a little help from Beijing. And over all, since Kim Jong-un took power five years ago, North Korea’s underdeveloped economy has shown signs of faster growth.

Chinese officials have insisted they are obligated only to stop trade in certain restricted items. Those include Chinese exports of nuclear equipment and, under new international sanctions, imports of North Korean iron ore and seafood.

“As neighbors, China and North Korea maintain normal trade,” said Huang Songping, the spokesman of China’s customs administration, at a briefing in July.

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