North Korea
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People wearing face masks cross a road in Pyongyang, North Korea. Photo: AP

Coronavirus appears to be hurting North Korea harder than trade sanctions: report

  • Its trade with China shrank 73 per cent through September and is set to fall 80 per cent for the whole year, says a Seoul trade association
  • The trend shows that while sanctions mainly hit the North’s exports to China, the pandemic has severely curtailed imports from its giant neighbour
North Korea
The closure of borders to safeguard North Korea from the coronavirus pandemic is dealing a bigger blow to trade with the isolated economy than international sanctions, according to a report by a trade association in Seoul.
North Korea’s trade with China, by far its largest economic partner, shrank 73 per cent through September and is on course to plunge 80 per cent for the whole year, the Korea International Trade Association said on Friday.
That would exceed the 57 per cent drop seen during the same period in 2018 when international sanctions intensified to penalise the Pyongyang regime for its tests of nuclear weapons and missiles to deliver warheads, the report said.

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To be sure, in absolute terms the impact of sanctions on the country’s trade is larger than the drop seen so far this year.

Still, the trend in trade figures shows that while sanctions mainly hit the North’s exports to China, the pandemic has severely curtailed imports from Korea’s giant neighbour.

Pyongyang has so far denied any confirmed Covid-19 cases on its soil, but reports from state media suggest the country is experiencing extreme economic pain.

Store shelves in Pyongyang have seen sharp drops in several food staples compared to a year ago, specialist service NK News reported this week.

Unlike North Korea’s heavily militarised border with South Korea, the country’s 1,420km border with China is porous – and the black-market traders who have crossed for years from both sides have come under closer scrutiny since they could be a source for bringing the virus into North Korea.

Kim Jong-un issued a rare warning for the economy in August, telling party leaders that his country “faced unexpected and inevitable challenges,” adding that his development goals had been seriously delayed.

North Korea intensified its border quarantine around August-September to prepare for its October 10 party anniversary, and will probably maintain strict control until January’s party congress, importing only essential goods, the KITA report said.

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Of the total 73 per cent drop in North Korea’s trade with China, exports fell by 70 per cent to US$46 million while imports declined 73 per cent to US$487 million, according to KITA.

Sales of North Korea’s major export products, such as watches and wigs, have come close to a full stop, KITA said, adding that the shutdown of borders has disabled the shipments of goods that are free from sanctions. North Korea’s purchases of key food staples and medical goods fell less, with falls as small as around 2 per cent.

North Korea does not release official growth data, and the breakdown from China’s trade report is widely used to gauge the health of the reclusive regime.

Fitch Solutions said in an August report that North Korea’s economy would shrink at least 8.5 per cent this year due in part to the pandemic’s negative impact.