Tags: North Korea | China | North Korea | trade imbalance

China, NKorea Trade Imbalance Deepens

Image: China, NKorea Trade Imbalance Deepens

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By    |   Friday, 08 Sep 2017 05:04 PM

China is selling more goods to North Korea, but buying less from there – creating a worsening trade imbalance that may deepen Pyongyang's need for credit from China or cash elsewhere, The New York Times reported.

According to the Times, the steady flow of Chinese goods might be why economic sanctions have had little effect on North Korea — the sanctions cut North Korea's export income, but it can still get goods from Beijing to keep an urban populace happy.

"My best guess is that North Korea is receiving trade credits from those providing it with goods and services — that is to say, China," Steve Hanke, a Johns Hopkins University economist, told the Times.

The Times noted that for years, Chinese purchases of coal and other goods gave North Korea a steady source of money. But that source isn't so steady anymore, with North Korea buying $2 worth of goods from China in July for each $1 of sales to China and Beijing essentially halting purchases of North Korean coal since mid-February.

North Korea may need to buy even more from China in months ahead because of a drought, the Times reported.

But even as some in Congress have begun talking about legislation that would target leading Chinese banks' use of dollar-based payments systems as a way to hit North Korean trade even harder, financial experts are wary.

"What the legislators do not know, and it's a little scary, is what these restrictions would mean for China," Elizabeth Rosenberg, a former North Korea specialist at the United States Treasury who is now at the Center for a New American Security, told the Times.

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China is selling more goods to North Korea, but buying less from there - creating a worsening trade imbalance that may deepen Pyongyang's need for credit from China or cash elsewhere, The New York Times reported.According to the Times, the steady flow of Chinese goods might...
China, North Korea, trade imbalance
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2017-04-08
Friday, 08 Sep 2017 05:04 PM
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