2003 March 20 Thursday
China Or Japan Biggest North Korea Trading Partner?

Who has more economic leverage over North Korea, China or Japan? Audrey McAvoy of the Associated Press says Japan is the biggest customer for North Korean goods.

Just a day away by ship, Japan is by far North Korea's biggest customer, gobbling up to a quarter of its exports. North Korea shipped $225.62 million worth of goods to Japan in 2001, according to figures compiled by the Korea Trade Investment Promotion Agency in South Korea. Its next biggest markets were South Korea, which imported $176.17 million, and China, $166.73 million.

Robert Scalapino, co-chair of the Center for Korean Studies at UC Berkeley, puts China as North Korea's top trading partner.

But in recognizing South Korea, China took greater care than, say, Russia, in seeking to ameliorate North Korea's anxieties. China is North Korea's most important trading partner, with turnover exceeding US$700 million last year, up 30 percent from 2001. Indeed, China is believed to supply about 70 percent of the North's oil, and has doubled its sales of grain and vegetables. While China no longer promises the North military support (except in the event of external attack), "consultations" are pledged.

China seems a more likely candidate as North Korea's biggest trading partner. However, a fair amount of China trade may be trans-shipments of goods that eventually end by going to Japan.

Even without any formal sanctions against North Korea the aid flow to North Korea has already declined dramatically since the nuclear crisis began.

The Bush Administration insists it is not cutting off food for fear of sparking a humanitarian crisis, but donations have been reduced until there is better monitoring to ensure it is getting to the neediest people. Japan, which shipped 600,000 tons of rice through the WFP in 2000, suspended shipments in 2001 and refuses to restart them. The European Union, too, has reduced donations since the nuclear crisis began.

That Time article claims that South Korea is cutting back its food aid to a quarter of last year's levels from 400,000 tons to 100,000 tons..

Indicators of the severity of the hunger in North Korea show up in curious ways.

When workers recently pruned trees at the U.N. compound in Pyongyang, they took the opportunity to strip off the bark, Bridle said. Tree bark is a common alternative source of food.

The trend of a general decline in aid to North Korea appears to be reversing.

"There seem to be efforts by the international community to buy time in North Korea, to try and appease Kim Jong-il," said one Beijing-based diplomat, referring to the leader of the reclusive Communist state.

If this article is correct and South Korea starts selling 432,000 tons of rice to North Korea on credit and at the quoted volume then it will have effectively reversed its food aid cut-off and actually increased its yearly food shipments to North Korea. The credit will likely never be repaid and so the South Korean rice sale to North Korea is effectively an aid donation for all intents and purposes.

One problem with aid cut-off and trade sanctions is that the North Koreans could starve in massive numbers without necessarily understanding that their regime is to blame.

Through an information monopoly, defectors have described apopulace that believes North Korea, a nation where the specter of starvation hovers constantly, is one of the world's richest countries. And they are told that American food aid to relieve hunger is actually a form of tribute to Kim Jong Il.

An internal overthrow of the North Korean regime would become a far more plausible scenario if only more North Koreans knew how much worse off they are than people in South Korea and other countries in the region.

Share |      By Randall Parker at 2003 March 20 04:36 PM  Korea

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