China’s Ministry of Foreign Affairs (MFA) on Monday defended recent trade statistics that show a net increase in value throughout the first nine months of 2017, despite stricter UN sanctions aimed at limiting the DPRK’s revenues.
During a regular press briefing in Beijing, MFA Spokesperson Geng Shuang said UN measures were not intended to have negative humanitarian consequences on the North Korean population.
“(The UN) measures imposed are not intended to have adverse humanitarian consequences for the civilian population of the DPRK or to affect negatively or restrict those activities, including economic activities and cooperation, food aid and humanitarian assistance, that are not prohibited by resolutions,” he said. “As close neighbors, China and the DPRK maintain normal exchanges and cooperation.”
The foreign ministry’s transcript of the press briefing said overall trade with the DPRK was up by 3.7 percent, mainly due to a large 21 percent jump in Chinese exports to the DPRK, while imports fell 16 percent.
UN resolutions prohibit member states from importing several DPRK minerals and metals, including coal and iron and have more recently been expanded to cover other commodities like seafood and textiles.
Between them, the sale of now designated products accounted for a large percentage of the North’s revenues from trade.
But most exports to North Korea are not prohibited, with sanctions mainly covering luxury good or items or materials that could further the North’s weapons programs.
According to Chinese customs data collated by the Korea International Trade Association (KITA), China’s main exports to the DPRK mainly consist of various kinds of electrical items and machinery.
North Korea spent USD$52 million on importing Chinese electronics and machines in August, trade categories which include items like cell phones and computers.
The DPRK spent a further USD$23 million on importing vehicles from China. While some luxury vehicle exports would breach UN sanctions, the data indicates the majority of the imports consist of electric motorcycles and vehicles used for public transport or construction.
Yet China’s most recent trade figures continue to show that despite its falling income from trade, North Korea has managed to increase its spending on Chinese goods, pushing its balance of trade further into the red.
Without its coal revenues, North Korea has spent double its monthly trade earnings several times throughout 2017, and it’s unclear how long the country will be able to maintain the deficit.
One expert told NK News that the recent figures continued the trend of a dramatically widening current account deficit.
“China is selling to North Korea, but imports are drying up,” said Stephan Haggard, director of the Korea-Pacific Program at IR/PS. “The big question is how this deficit is being financed? Is North Korea drawing down reserves, or are Chinese firms—or even the government—extending credit? It doesn’t seem like the situation is sustainable.”
Edited by Oliver Hotham