North Korea, China reviving economic cooperation

North Korean leader Kim Jong-un visits the North Korean Embassy in Beijing on June 21, 2018. Pyongyang recently appointed a trade specialist to head its embassy in Beijing. Yonhap

By Do Je-hae

Prospects of revived economic cooperation between North Korea and China have increased following North Korean leader Kim Jong-un's announcement of a five-year plan for economic development during the eighth congress of the ruling Workers' Party of Korea in January.

Stoking such expectations, Pyongyang replaced its ambassador to China for the first time in 10 years with a seasoned trade specialist. On Feb. 19, it was reported that Pyongyang named as ambassador to China, Ri Ryong-nam, a former vice premier in charge of trade policy in North Korea's Cabinet from June 2016 to January 2021. Ri replaced outgoing ambassador Ji Jae-ryong.

Previously, Ri served as trade minister from 2008 until 2016. The career trade official also served as economic affairs secretary at North Korea's Embassy in Singapore, according to media reports.

North Korea's focus on economy

It is extremely rare for North Korea to name a trade specialist as ambassador to China. The move was seen as a strong sign of the North's intention to revive economic cooperation with China. Bilateral trade and economic cooperation have been severely reduced during the COVID-19 pandemic.

According to the latest reports, there have been some notable developments that underscore Pyongyang's drive for more active cooperation with China since Ri assumed his new post. One is a reported visit by a North Korean chemical industry delegation to Tongchuan City in China's Shaanxi Province earlier this month. The South Korean Ministry of Unification said it is closely monitoring the situation in the China-North Korea border.

In addition, some Japanese media reported on March 16 that the two countries were getting ready to open a new 3-kilometer bridge called the New Amnokgang Bridge linking North Korea's Sinuiju and China's Dandong regions. The bridge, according to Japanese media, could open later this year depending on the COVID-19 situation. The bridge was built in 2014, but has not been opened due to the cash-strapped North's inability to cover necessary expenses for road and customs facilities. If opened, the bridge is expected to significantly contribute to increasing trade and travel between the two countries.

The New Amnokgang Bridge that was designed to connect China's Dandong New Zone, Liaoning Province, and North Korea's Sinuiju. According to some Japanese media reports, North Korea and China are getting ready to open the bridge later this year. Korea Times file

Experts say Kim's renewed focus on rebuilding North Korea's economy in the post-COVID-19 period has resulted in top economic priority being placed on resuming trade with China, given Pyongyang's longstanding dependence on Beijing as a trade partner.

"It is clear that the North Korean economy has suffered significantly as a result of the COVID-19-related shutdown, thus the need to boost trade links with China (has increased). There are no real alternatives in the short term, especially for the markets that have become the backbone of the North Korean economy," said Ramon Pacheco Pardo, associate professor in International Relations at Department of European & International Studies, King's College London.

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Donald Kirk, a columnist on Korean Peninsula affairs, stressed that China is indispensable for North Korea's survival. "It's extremely important for North Korea to resume trade with China. North Korea imports almost all its oil and half its food from China and also counts on Chinese industry for important manufactured products. China is North Korea's ally, both militarily and commercially. North Korea cannot survive without Chinese support," Kirk said.

When the COVID-19 pandemic eases, analysts said the two countries are likely to restart their cooperation in various areas essential to North Korea's economy. But analysts did not expect much progress in cooperation in tourism, an area that Kim sees as a key impetus for economic development.

"I would expect North Korea-China economic relations to first start in the areas that were doing better before the COVID-19 pandemic: watches, fake wigs and eyelashes, some minerals and other non-sanctioned goods from North Korea to China, and food from China to North Korea. I would also expect trade in sanctioned goods such as textile exports from North Korea to resume. And I would also expect China to continue to provide oil to North Korea," Pardo said. "Chinese tourists should also return in due course, but China's cautious approach to border management as a result of the pandemic means that it could still take a while for this to happen."

"North Korea exports coal and other natural resources to China. The Chinese also are in a position to offer technical and economic advice that North Korea needs to revive its economy. Tourism will be important, but secondary to much bigger deals for China to send natural resources to North Korea while receiving virtually all oil along with food and vital manufactured products from China," Kirk said.

The dominant view in the policy community is that resumption of tourism, people-to-people exchanges, and other large-scale investments will not take off until the pandemic stabilizes, not only along the Sino-North Korean border, but on a global level.

Pyongyang named Ri Ryong-nam, a former vice premier in charge of trade policy in North Korea's Cabinet, as ambassador to China last month. Yonhap

"Security and control matter most to the Kim regime, and public health surely falls under both those categories. Given all the vaccinations that will first have to occur in North Korea and northeastern mainland China, I can easily imagine cross-border trade and investment not resuming in earnest until 2022 sometime," said Sean King, senior vice president at Park Strategies.

At this point it is difficult to ascertain whether and when Sino-North Korean trade will return to pre-pandemic status. Some analysts said the unforeseen restrictions on foreign trade posed by COVID-19 could prompt North Korea to further emphasize "juche" (self-reliance) and promote domestic production for a multitude of essential supplies such as coal and consumer goods.

Impact on Korean Peninsula

China's significance as a factor in jump-starting the stalemated denuclearization process and the inter-Korean peace process has been reduced. The multilateral forum, such as the six-party talks, for the denuclearization of the Korean Peninsula, where China played a visible leading role, has been defunct for a long time.

So what impact could active North Korea-China economic cooperation have on the overall mood on the Korean Peninsula and possibly in resuscitating President Moon Jae-in's peace process? Under the circumstances, experts had mixed views about the impact of a strong North Korea-China relationship on accelerating peace on the peninsula.

"Gradually restoring trade with China will hopefully alleviate the plight of the North Korean people, but may detract from sanctions enforcement and give the Kim regime the luxury to continue rejecting aid and assistance from South Korea," said Leif-Eric Easley, associate professor of international studies at Ewha Womans University in Seoul.

North Korean leader Kim Jong-un, second from left, and Chinese President Xi Jinping, second from right, and their wives drink tea during a luncheon hosted by Xi in Beijing, March 28, 2018. The two leaders recently exchanged friendly greetings through letters during North Korea's ruling Workers' Party of Korea congress in January, but have not met in person since June 2019, when Xi visited Pyongyang. North Korea's engagement with China with a focus on trade is expected to help to bring Pyongyang out of its self-imposed isolation since the COVID-19 pandemic. Korea Times file

"I think that having a North Korea willing to engage with other countries, even if it is China and with a focus on trade, should help to bring Pyongyang out of its self-imposed isolation in recent months. In my view, this should be good for the potential resumption of dialogue in the Korean Peninsula," Pardo said.

"On the one hand, South Koreans can applaud China's success in getting along with North Korea. On the other hand, Chinese dealings with North Korea puts pressure on the South, which exports manufactured products with China while looking suspiciously on China's ties with the North," Kirk said. "It's not clear if China-North Korean economic cooperation will advance President Moon's peace process. China might persuade Kim Jong-un to exercise forbearance and not threaten the South. But perhaps China, in moving so close to North Korea, might reduce ties with South Korea, which ranks China as its number one trading partner. China might exercise undue pressure on South Korea, as it's been doing for most of last year."