China-North Korea first-half trade at record low amid pandemic and food shortages

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Trade between China and North Korea hit a record low in the first half of the year as the coronavirus pandemic and food shortages took their toll.

China’s exports to North Korea fell by 85.2 per cent year on year to US$56.77 million in the first six months of 2021, according to Chinese customs data released on Sunday.

It was the lowest figure since China started releasing the data in 2001.

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China imported US$8.96 million of goods from its neighbour over the same period, down 67.3 per cent from a year earlier and another record low.

The sharp decline comes after North Korea doubled down on its border controls last month as fast-spreading coronavirus variants extended their reach around the world.

At the same time, Pyongyang has faced growing food shortages and economic instability at home.

North Korean leader Kim Jong-un warned last month that the agricultural sector failed to meet grain production targets because of typhoon damage last year, and the country’s food situation was “getting intense”, according to state media.

The United Nations’ Food and Agriculture Organization forecast that North Korea was facing a food shortage of around 860,000 tonnes this year, and the country could have a “harsh lean period” as early as August.

North Korea is highly dependent on its trade with China for food, as well as fertiliser and fuel. However, it was among the first countries to close its borders with China after the initial coronavirus outbreak was reported in the central Chinese city of Wuhan in January.

Marking the 60th anniversary of a defence treaty between the two countries a week ago, Chinese President Xi Jinping told Kim that “China is determined to support North Korea’s economic development and improvements to people’s livelihoods”.

In terms of monthly figures, China exported US$12.32 million of goods to North Korea in June, nearly six times the US$2.71 million the previous month but still a year-on-year decline of about 86 per cent.

Chinese imports from North Korea also fell by 80 per cent to US$1.82 million last month, although the figure was more than double the US$750,000 reported for May.

China’s exports to North Korea have declined 16 months in a row year on year amid the fallout from Covid-19.

The only exception was a brief rebound this April, when there were signs that the two neighbours were easing border restrictions amid tensions with the United States.

Observers in China said stalled nuclear talks between North Korea and the United States meant UN sanctions remained in place, restricting China’s trade with North Korea.

Some of that bilateral trade would recover but not to pre-sanctions levels, analysts said.

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