North Korea’s Trade Deficit Pushes Arms Trade with Russia
It has been revealed that North Korea recorded its largest deficit in four years in trade with China, which accounts for the majority of its trade. There are concerns that North Korea may actively trade arms with Russia to solve its foreign currency shortage problem.
According to a report on “The Status of North Korea’s Trade with China in 2023 and its Implications” by the Unification Research Institute on the 13th, North Korea’s exports to China last year amounted to $290 million, while imports reached $2.03 billion, resulting in a trade deficit of $1.74 billion. The deficit is the largest at $2.37 billion since 2019, before the pandemic. The report analyzed the status of North Korea’s trade with China using the 2023 Chinese trade statistics announced by the Korea International Trade Association.
In detail, North Korea mainly exported wigs and false eyelashes to China. It sold $167 million worth, accounting for 57.5% of the total exports. This is the first time that the annual export amount of a single item has exceeded $100 million after sanctions against North Korea were strengthened in 2018. The report stated, “North Korea has been struggling to find new main products after the stalled export of major export items due to the strengthened sanctions against North Korea,” and “The surge in exports of wigs and false eyelashes will be a positive change from the authorities’ perspective.” The exports were followed by $32 million in alloy steel, $26 million in tungsten, and $22 million in electrical energy.
Regarding the imported intermediate goods, textiles and fabrics were the most at $258 million, plastic products at $212 million, and wig materials at $171 million.
The report analyzed, “Considering that North Korea’s foreign exchange reserves are estimated to be in the billions of dollars, it will be difficult for North Korea to endure a situation where a trade deficit of the same or larger scale as last year occurs under sanctions for a long period.” It emphasized, “To overcome this situation, North Korea is expected to actively engage in acquiring foreign currency through illegal methods, such as cyber financial crimes and especially arms trade with Russia, so the international community needs to be thoroughly prepared.”