North Korea’s External Economic Relations, 1990–2016

Abstract

North Korea's international transactions have grown since the 1990s famine period. Illicit transactions appear to account for a declining share of trade. Direct investment is rising, but the county remains significantly dependent on aid to finance imports. Interdependence with South Korea and China is rising, but the nature of integration with these two partners is very different: China's interaction with North Korea appears to be increasingly on market-oriented terms, while South Korea's involvement has a growing noncommercial or aid component. These patterns have implications for North Korea's development, the effectiveness of UN sanctions, and its bargaining behavior in nuclear negotiations.JEL codes: F5, P3, F14

Bridges of Ambition to North Korea: Economy of Anticipation and Materiality of Aspiration in Dandong, China

“…This aspiration for expansion, temporally and spatially, highlights the positive role China hopes to play in the region while strengthening its economic and political position. Scholars of the region have cited China’s and North Korea’s long-standing diplomatic relation and China’s undeniable role in North Korea’s foreign trade as serving the basis of such a future and demanding more attention (Haggard and Noland, 2007; Park, 2009; Glaser et al, 2008). Many South Korean scholars have also analyzed the economic relationship of the two states as building the foundations for further economic cooperation in the region that will eventually bring about peace in the region, while others argue for more South Korean participation, drawing on national re-unification narratives (Incheon-Dandong-Hankyoreh International Forum, 2012).…”

“…By evoking their common history and China’s aid during the war, its politics of memory calls upon North Korea to follow China as it defines the future. Accordingly, many studies that focus on the growing economic relations between China and North Korea highlight this earlier ‘bond’ based on communist ideologies (Yoon and Lee, 2012; Glaser et al, 2008; Snyder, 2003; Haggard and Noland, 2007; Park, 2002). At the same time, South Korea and China are able to set aside their historical conflicts by sharing the common future goal of economic prosperity and solidarity in East Asia.…”