News / Economy

China Exports to North Korea Fall

A cargo ship loaded with containers is seen anchored at a port in Qingdao, Shandong province, China, July 10, 2013.
A cargo ship loaded with containers is seen anchored at a port in Qingdao, Shandong province, China, July 10, 2013.
William Ide
Newly released Chinese trade data show that during the first six months of the year, exports to North Korea fell for the first time in four years. The figures were made public shortly after Chinese Vice President Li Yuanchao wrapped up a visit to North Korea to mark the 60th anniversary of the end of the Korean War.
 
Newly released figures from China’s General Administration of Customs shows exports to North Korea shrank by more than 13.6 percent from January to June, to $1.59 billion when compared with the same period last year.
 
The last time exports from North Korea’s biggest ally slipped that much was in 2009 in the wake of the global financial crisis.
 
The drop in Chinese exports was due largely to a steep decline in shipments of crude oil to the North.

North Korea's reliance on China oil

Lu Chao, a Korea scholar at the Liaoning Academy of Social Sciences, said that according to official figures, China is the biggest provider of oil to North Korea, providing more than 500,000 tons last year alone.
 
The reason for the recent drop in Chinese exports is simple. “The main reason is clear to everyone, this year after North Korea’s nuclear test, China has implemented the sanctions decided by the U.N. Security Council resolution," he said. "The figures reflect this situation, because under normal terms China and North Korea trade goods and material for production, but when restrictions affect the more sensitive sector of military equipment the slow down is more evident.”
 
North Korea’s decision to carry out its third nuclear test earlier this year has seriously strained ties between the two countries.
 
In the wake of the test, some Chinese academics were calling on Beijing to cut off North Korea completely, and protestors took to the streets denouncing what they felt was Beijing’s tolerance of the test.
 
Chinese officials have condemned the test and repeatedly have called for a resumption of six-nation talks aimed at ending the country’s nuclear weapons programs.

China tightens banking restrictions

In May, the state-run People’s Bank of China announced it was closing all transactions and shutting down its account with North Korea's foreign trade bank.
 
Last week, China’s Vice President Li Yuanchao made a trip to North Korea, the first ever since Kim Jong Un took office. The two were seen standing close together, smiling and waving to crowds during ceremonies that marked the 60th anniversary of the end of the Korean War.
 
Lu said the trip, however, which stood in contrast to China’s recent actions, was not contradictory.
 
“The relationship is now in a transition from the old alliance sort of relationship to more normal friendly relations between the two countries. The fact that Li Yuanchao took part in the celebration doesn’t mean that there’s a big change in relations between the two countries or that they are leaning to one side or another,” said Lu.
 
During meetings Tuesday in Seoul, South Korea and the United States announced their intention to continue implementing sanctions against North Korea and to seek further assistance from China.
 
David S. Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, met with South Korea’s vice foreign minister and top negotiator to the long-stalled six party talks in Seoul on Tuesday.

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